Ch 1

1. How is “strategic management” defined in the text, and what are its four key attributes?

• Strategic management is defined as the process of formulating, implementing, and evaluating cross-functional decisions that enable an organization to achieve its objectives. Its four key attributes are environmental scanning, strategy formulation, strategy implementation, and evaluation and control.

• Strategic management is defined as the art and science of formulating, implementing, and evaluating cross-functional decisions that enable an organization to achieve its objectives. Its four key attributes are environmental scanning, strategy formulation, strategy implementation, and evaluation and control.

• Strategic management is defined as the process of making decisions that enable an organization to achieve its objectives. Its four key attributes are planning, organizing, leading, and controlling.

• Strategic management is defined as the art and science of making decisions that enable an organization to achieve its objectives. Its four key attributes are planning, organizing, leading, and controlling.

2. Briefly discuss the three key activities in the strategic management process. Why is it important for managers to recognize the interdependent nature of these activities?

• The three key activities are planning, implementation, and evaluation. Recognizing their interdependence ensures cohesive strategy execution.

• The three key activities are marketing, sales, and customer service. Recognizing their interdependence ensures customer satisfaction.

• The three key activities are hiring, training, and development. Recognizing their interdependence ensures employee growth.

• The three key activities are budgeting, forecasting, and reporting. Recognizing their interdependence ensures financial stability.

3. Explain the concept of “stakeholder management.” Why shouldn’t managers be solely interested in stockholder management, that is, maximizing the returns for owners of the firm—its shareholders.

• Stakeholder management involves considering the interests of all parties affected by the firm's actions, not just shareholders.

• Stakeholder management focuses solely on maximizing shareholder returns.

• Stakeholder management is irrelevant in modern business practices.

• Stakeholder management is only about managing employees.

What is “corporate governance”? What are its three key elements and how can it be improved?

• Corporate governance is the system by which companies are directed and controlled, with key elements being transparency, accountability, and security.

• Corporate governance is the system by which companies are directed and controlled, with key elements being transparency, accountability, and stakeholder engagement.

• Corporate governance is the system by which companies are directed and controlled, with key elements being transparency, accountability, and innovation.

• Corporate governance is the system by which companies are directed and controlled, with key elements being transparency, accountability, and risk management.

Symbiosis (interdependence, mutual benefit) can be achieved among a firm’s stakeholders by:

• Implementing collaborative strategies

• Ignoring stakeholder interests

• Focusing solely on profit maximization

• Reducing communication with stakeholders

Firms need to have a greater strategic management perspective and empowerment in the strategic management process throughout the organization because:

• It helps in achieving long-term goals and adapting to changes.

• It increases the workload of employees.

• It reduces the need for communication within the organization.

• It focuses solely on short-term profits.

What is meant by a “hierarchy of goals”? What are the main components of it, and why must consistency be achieved among them?

• A hierarchy of goals refers to the organization of objectives in a structured manner, consisting of strategic, tactical, and operational goals, where consistency ensures alignment and effectiveness.

• A hierarchy of goals is a list of unrelated objectives that do not require consistency.

• A hierarchy of goals is a random assortment of tasks with no need for alignment.

• A hierarchy of goals is a theoretical concept with no practical application.

Managers must be aware of a firm’s external environment because:

• it helps in identifying opportunities and threats.

• it is required by law.

• it increases internal communication.

• it reduces the need for strategic planning.

Gathering and analyzing competitive intelligence is important for firms because it helps them to:

• Understand market trends and make informed decisions

• Increase their production capacity

• Hire more employees

• Reduce their marketing budget

Discuss and describe the six elements of the external environment.

• Political, Economic, Social, Technological, Environmental, Legal

• Political, Economic, Social, Technological, Cultural, Legal

• Political, Economic, Social, Technological, Ethical, Legal

• Political, Economic, Social, Technological, Demographic, Legal