Business Policy and Strategic Management MCQ with Answers for preparation competitive, MBA, BBA distance and regular mode courses.
74 MCQs on Business Policy and Strategic Management.
1. The key or common objective of both business strategy and military strategy is to secure a competitive advantage over the rivals or the opponents. (True/False)
2. A unified, comprehensive and integrated plan designed to assure that the basic objectives of the enterprise are achieved. This definition of the strategy was given by___.
Ans. Glueck (1972)
3. Business strategy is formulated, implemented and evaluated with an assumption of___, but the military strategy is based on the assumption of ___.
Ans. Competition, conflict
4. For single-business companies, corporate-level strategies and business unit-level strategies would be quite distinct. (True/False)
5. The opportunities that companies should always look for and seize or exploit at the right time are called ___.
Ans. Strategic windows
6. Strategic windows arise as a result of ___.
Ans. Market evolution
7. Businesses and markets may evolve because of
(a) Development of new product (new demand)
(b) Emergence of new competing technologies
(c) Market redefinition or changes
(d) All of these
8. Strategic windows are not so important for timing the exit from a product or a market. (True/False)
9. The nature and focus of corporate strategy in different types of organizations are different primarily because of the nature of their operations and organizational objectives and priorities. (True/False)
10. As they are operating multi-location (country) strategies, roles of strategic planning and management become more critical in ___ companies for optimizing manufacturing facilities, resource allocation and control.
11. All companies undertake strategic planning and management. (True/False)
12. Both overconfidence and fear of failure are among the reasons for not adopting strategic planning and management. (True/False)
13. For strategy building, one should set a goal and stick to it. (True/ False)
14. Good leadership is a precondition for maintaining good morale of a strategy. (True/ False)
15. The ___ process consists of four distinct steps or stages – Defining organizational mission, objectives or goals; formulation of strategy/ strategic plan; implementation of strategies; and strategy evaluation and control.
Ans. Strategic management
16. Organizational competence and resources, the environment, various strategic alternatives available, strategy selection criteria, etc., are ___ parts of SMP.
17. Application of SMP is more formal and model-driven in small businesses. (True/False)
18. In practice, strategists may not always follow the strategic management model as rigid steps or chains in the management process as, situations may not always warrant this. (True/False)
19. ___ has classified various approaches to SMP into three forms, calling it the three modes of the strategy-making process — entrepreneurial mode, adaptive mode and planning mode.
Ans. Mintzberg (1973)
20. In the ___ approach, the focus is on exploiting opportunities against environmental odds rather than problem-solving.
21. In the ___ approach, the strategic management process depends largely on the planning system.
22. Which of these approaches is essentially a balancing strategy – more remedial and reconciliatory, and, therefore, more reactive than proactive as a decision-making process?
(c) Adaptive approach
(d) Combination approach
23. A ___ is a division or a product/product group unit which operates as a separate profit centre having its own set of market and competitors and its own marketing strategies.
Ans. Strategic business unit
24. Strategies at the functional level are often described as ___, and such strategies are guided and controlled by overall SBU strategies.
25. Corporate-level strategy sets the short-term objectives of an organization and broad policies and controls within which an SBU operates. (True/False)
26. Operating strategies in comparison are relatively narrow strategies for managing different operating units. (True/False)
27. Managers at different levels—top, senior and middle—participate in the strategic planning and management process. (True/False)
28. The ___ plays the most important role in the strategic management process of a company.
Ans. Chief executive
29. Most large companies and multinationals have created a separate ___ unit, which is equipped with specialized planning staff who form the nucleus of the strategic planning activities of a company.
Ans. Corporate planning unit
30. In companies with no separate planning division or unit, ___ can fill that gap.
31. The widening gap between demand for change by the environmental forces and actual strategic change in a company is referred to as ___.
Ans. Strategic drift
32. The risk of strategic drift implies that there is not much justification in pursuing formalized planning approaches with predetermined objectives, analyses and strategies. (True/False)
33. Managers in a learning organization have a ___ mind.
34. The learning organization is also an evolving organization. (True/False)
35. The five definitions of ___ given by Mintzberg and Quinn (1991) are plan, ploy, pattern, position and perspective.
36. When some of the activities followed by a company may not be compatible with each other or with organizational objectives or goals, ___ is required.
37. Policy is the same as a strategy. (True/False)
38. According to the New Webster Dictionary, ___ means the art or manner of governing a nation or the principle on which any measure or course of action is based.
39. Policy generally comes first; strategy comes later, and, sometimes, follows from or is subject to the policy. (True/False)
40. Strategy and tactics are also the same although they appear to be different.
41. All the management functions of a company can be broadly classified into two categories ___ and ___.
Ans. Strategic, operational
42. Strategic functions are performed more at the senior and top management level, while operational functions are discharged more by ___ management levels.
Ans. middle and lower
43. Strategic management consists of three distinct steps or stages formulation, strategy implementation, and evaluation and control. (True/False)
44. Operational functions or operational management, as the name implies, is concerned with routine matters of day-to-day management. (True/False)
45. A ___ is a blueprint or document which incorporates details regarding different elements of strategic management.
Ans. strategic plan
46. Strategic planning is concerned with the environment or rather, the fit between the environment, the internal competencies and business(es) of a company. (True/False)
47. Strategic management allows an organization to be more ___ than reactive in shaping its own future.
48. The benefits of strategic management are purely financial. (True/False)
49. Every company or business has ___ responsibility towards its shareholders.
Ans. moral or ethical
50. Almost all strategy formulations, implementation and evaluation decisions have ethical implications. (True/False)
51. To safeguard against natural or man-made disasters, ___ is essential.
Ans. Business continuity planning
52. ___ is a pre-emptive measure, while ___ response is a reactive step.
Ans. Prevention, response
53. The system by which business corporations are directed and controlled is called___.
Ans. Corporate governance
54. Corporate governance is primarily guided by___.
55. It is correct to equate with corporate management with corporate governance. (True/False)
56. Both corporate governance and corporate strategy start with organizational objectives. (True/False)
57. The affairs of a company are directed and controlled through the ___ who represent the shareholders of the company.
Ans. board of directors
58. The ___ system should clearly address the three major issues of an organization—corporate objective; whom the organization should be serving; and, how best to serve their interests.
Ans. corporate governance
59. Corporate governance and strategies play ___ roles in the smooth and efficient functioning of organizations.
60. The interrelationship or interdependence between governance and strategy can be seen through a chain in the ___ in organizations.
Ans. ‘reporting system’
61. Activities like input (resources and capabilities) management and processing have been shown as dominantly of ___ nature
62. Activities like organizing (accomplishing the plan) and output (outcome) have been classified as mix of both ___ and ___ factors.
Ans. Strategic, governance
63. The ___ has prescribed a code of best practice to serve as a guideline to those companies which want to achieve higher standards of corporate governance.
Ans. Cadbury Committee
64. One of the constituents of the code prescribed by the Cadbury Committee are:
(a) Higher pay for directors
(b) Separate positions of chairman and CEO
(c) the Greater role of chairman in decision making
(d) the Lesser role of chairman in decision making
65. ___ is a new tool for the systematic review of strategy by board members without directly involving themselves with the management of companies.
Ans. strategic audit
66. A performance criteria commonly used as a measure by many companies, is ___.
Ans. return on investment (ROI)
67. The Board is not responsible for the successful perpetuation of the corporation.
68. The board should be an effective ‘watchdog’ without undermining the management’s ability to run the business. (True/False)
69. The governed corporation has dominated the corporate arena for decades. (True/False)
70. Managers tend to be biassed towards strategies and decisions which reflect their individual strengths. (True/False)
71. In the governed corporation, the focus is not on power—not monitoring or controlling the managers—but, on ___.
Ans. improving decision making
72. ___ has suggested five major changes in the managed corporation for it to evolve into a governed corporation.
73. The starting point of both corporate strategy and governance are the same, i.e., the achievement of organizational objectives. (True/False)
74. In corporate governance, there is a growing emphasis on ‘inclusiveness’ or ‘inclusive governance’, i.e., focusing on the society, community and environmental development. (True/False)