Business Policy and Strategic Management MCQ with Answers

Business Policy and Strategic Management MCQ with Answers for preparation competitive, MBA, BBA distance and regular mode courses.

Business Policy

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)
Ans. True

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)
Ans. 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
Ans. (d)

8. Strategic windows are not so important for timing the exit from a product or a market. (True/False)
Ans. 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)
Ans. True

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.
Ans. Multinational

11. All companies undertake strategic planning and management. (True/False)
Ans. False

12. Both overconfidence and fear of failure are among the reasons for not adopting strategic planning and management. (True/False)
Ans. True

13. For strategy building, one should set a goal and stick to it. (True/ False)
Ans. True

14. Good leadership is a precondition for maintaining good morale of a strategy. (True/ False)
Ans. True

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.
Ans. Internal

17. Application of SMP is more formal and model-driven in small businesses. (True/False)
Ans. 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)
Ans. True

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.
Ans. entrepreneurial-opportunistic

21. In the ___ approach, the strategic management process depends largely on the planning system.
Ans. formal-structured

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?
(a) Entrepreneurial-opportunistic
(b) Formal-structured
(c) Adaptive approach
(d) Combination approach
Ans. (c)

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.
Ans. tactical

25. Corporate-level strategy sets the short-term objectives of an organization and broad policies and controls within which an SBU operates. (True/False)
Ans. False

26. Operating strategies in comparison are relatively narrow strategies for managing different operating units. (True/False)
Ans. True

27. Managers at different levels—top, senior and middle—participate in the strategic planning and management process. (True/False)
Ans. True

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.
Ans. Consultants

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)
Ans. True

33. Managers in a learning organization have a ___ mind.
Ans. Questioning

34. The learning organization is also an evolving organization. (True/False)
Ans. True

35. The five definitions of ___ given by Mintzberg and Quinn (1991) are plan, ploy, pattern, position and perspective.
Ans. Strategy

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.
Ans. Trade-off

37. Policy is the same as a strategy. (True/False)
Ans. 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.
Ans. ‘policy’

39. Policy generally comes first; strategy comes later, and, sometimes, follows from or is subject to the policy. (True/False)
Ans. True

40. Strategy and tactics are also the same although they appear to be different.
Ans. False

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)
Ans. True

44. Operational functions or operational management, as the name implies, is concerned with routine matters of day-to-day management. (True/False)
Ans. True

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)
Ans. True

47. Strategic management allows an organization to be more ___ than reactive in shaping its own future.
Ans. Proactive

48. The benefits of strategic management are purely financial. (True/False)
Ans. 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)
Ans. True

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___.
Ans. Shareholders

55. It is correct to equate with corporate management with corporate governance. (True/False)
Ans. False

56. Both corporate governance and corporate strategy start with organizational objectives. (True/False)
Ans. True

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.
Ans. Complementary

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
Ans. governance

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
Ans. (b)

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.
Ans. False

68. The board should be an effective ‘watchdog’ without undermining the management’s ability to run the business. (True/False)
Ans. True

69. The governed corporation has dominated the corporate arena for decades. (True/False)
Ans. False

70. Managers tend to be biassed towards strategies and decisions which reflect their individual strengths. (True/False)
Ans. True

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.
Ans. Pound

73. The starting point of both corporate strategy and governance are the same, i.e., the achievement of organizational objectives. (True/False)
Ans. True

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)
Ans. True

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