David TIF Ch09 2

Topics: Strategic management, Balanced scorecard Pages: 21 (4028 words) Published: March 17, 2015
Strategy Review, Evaluation and Control


The Nature of Strategy Evaluation

1. Most strategists believe that an organization’s well being depends on evaluation of the strategic-management process.

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2. Adequate, timely feedback is important to effective strategy evaluation.

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3. Too much emphasis on evaluating strategies may be expensive and counterproductive.

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4. Strategy evaluation should have a long-run focus and avoid a short-run focus.

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5. According to Richard Rumelt, consonance and consistency are based on a firm’s external assessment.

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6. According to Rumelt, consistency and feasibility are largely based on a firm’s internal assessment.

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7. Consistency, distinctiveness, advantage and feasibility are Richard Rumelt’s four criteria for evaluating a strategy.

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8. Strategy evaluation is becoming increasingly easier with the passage of time, given the technological advances.

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9. The decreasing time span for which planning can be done with any degree of certainty is a reason strategy evaluation is more difficult today.

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10. Strategies may be inconsistent if policy problems and issues continue to be brought to the top for resolution.

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11. Competitive advantages normally are the result of superiority in one of three areas: feasibility, consistency, or consonance.

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12. Regardless of the size of the organization, a certain amount of management by wandering around at all levels is essential to effective strategy evaluation.

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13. Because large companies have more at stake, it is more important for large organizations to conduct strategy evaluation than small companies.

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14. The end of the fiscal year is the best time to do strategy evaluation.

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A Strategy-Evaluation Framework

15. Changes in the organization’s management, marketing, finance, R&D and CIS strengths and weaknesses should all be the focus of a revised EFE matrix in strategy evaluation.

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16. In strategy evaluation, a revised IFE matrix should indicate how effective a firm’s strategies have been in response to key opportunities and threats.

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17. Strengths, weaknesses, opportunities and threats should continually be monitored for change because it is not really a question of whether these factors will change but rather when they will change and in what ways.

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18. When taking corrective action, you need to compare expected results to actual results.

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19. Criteria for evaluating strategies should be measurable and easily verifiable.

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20. Specific financial ratios are rarely used criteria to evaluate strategies.

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21. Measuring organizational performance includes comparing expected results to actual results, investigating deviations from plans, evaluating individual performance and examining progress being made toward meeting stated objectives.

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22. Intuitive judgments are almost always involved in deriving quantitative criteria.

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23. Most quantitative evaluation criteria are geared to long-term objectives rather than annual objectives.

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24. Measuring organizational performance requires making changes to reposition a firm competitively for the future.

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25. Taking corrective actions does not necessarily mean that existing strategies will be abandoned, or even that new strategies must be formulated.

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26. Corrective action in strategy evaluation is necessary to keep an organization on track toward achieving stated objectives.

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