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MCQs on Strategy Introduction its Levels and Concepts

The Levels of strategy are Corporate strategy, Business strategy, Operational and functional strategies. Here on MCQs.CLUB we have prepared useful

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MCQs on Strategy Introduction its Levels and Concepts

The Levels of strategy are Corporate strategy, Business strategy, Operational and functional strategies. Here on MCQs.CLUB we have prepared useful Multiple-Choice Questions (MCQs) on Strategy, Introduction, Levels and Concepts that fully cover MCQs on the introduction to business policy and strategic management, the overview of strategic management process, Features and Different Levels of Strategy, Stages and Types of Strategy and strategic objectives. These MCQs also cover the 4 Levels of Strategy: Types of Strategic Alternatives. These MCQs on Introduction to strategic studies & key concepts are also useful for professional accountancy exams, competitive exams and business management exams.

The Levels of strategy include:

1. Corporate strategy
2. Business strategy
3. Operational and functional strategies
4. All of the above

Corporate strategy –

1. is the highest level of strategy in an organisation, identifying the strategy for the organisation as a whole.
2. relates to how an organisation approaches a particular market, or the activity of a particular business unit.
3. involve decisions which are made at operational level and affect the day-to-day operation of the business. These decisions include marketing strategy, HR strategy, IT/IS strategy and so forth.
4. None

Corporate strategy is concerned with:

1. Entering new industries.
2. Leaving existing industries.
3. Both A&B
4. None

Business strategy –

1. is the highest level of strategy in an organisation, identifying the strategy for the organisation as a whole.
2. relates to how an organisation approaches a particular market, or the activity of a particular business unit.
3. involve decisions which are made at operational level and affect the day-to-day operation of the business. These decisions include marketing strategy, HR strategy, IT/IS strategy and so forth.
4. None

Business strategy is concerned with how to:

1. Achieve advantage over competitors.
2. Avoid competitive disadvantage.
3. Both A&B
4. None

While corporate strategy relates to an organisation as a whole, business strategy focuses on strategic business units (SBUs).

1. True
2. False

Operational and functional strategies –

1. is the highest level of strategy in an organisation, identifying the strategy for the organisation as a whole.
2. relates to how an organisation approaches a particular market, or the activity of a particular business unit.
3. involve decisions which are made at operational level and affect the day-to-day operation of the business. These decisions include marketing strategy, HR strategy, IT/IS strategy and so forth.
4. None

Operational strategy is concerned with:

1. Human resource strategy.
2. Marketing strategy.
3. Information systems and technology strategy.
4. Operations strategy.
5. All of the above

Approaches to strategic planning are:

1. Rational/Traditional approach
2. Emergent strategies
3. Both A&B
4. None

Which of the following is correct for ‘The rational (or traditional) approach’?

1. The rational model requires a logical, step-by step approach.
2. It involves the careful and deliberate formulation, evaluation and selection of strategies for the purpose of preparing a cohesive long-term course of action to attain objectives.
3. The rational approach to strategy is criticized because it ignores the fact that short term changes in environment often prevent long term goals being reached.
4. All of the above

The emergent approach suggests the strategy tends to emerge rather than be as a result of a logical formal process. It is evolving, continuous and incremental.

1. True
2. False

Problems with deliberate long-term planning include:

1. It descends into the formulation of empty platitudes that offer no positive directional indicators for decision-making.
2. The strategic planning can be costly, involving the use of specialists, and taking up management time.
3. Both A&B
4. None

Incrementalism (Lindblom) reasons for rational model to decision making not being used in real world are:

1. It does not normally involve an autonomous strategic planning team that impartially sifts alternative options before choosing the best solution.
2. Strategic managers do not evaluate all the possible options open to them but choose between relatively few alternatives.
3. Strategy-making tends to involve small-scale extensions of past policy – ‘incrementals’ rather than radical shifts following a comprehensive search.
4. All of the above

Freewheeling opportunists do not like planning. They prefer to see and take opportunities as they arise.

1. True
2. False

Functional structure – A functional structure divides the organization up into activities or functions and places a manager in charge of each function which is then coordinated by a narrow band of senior management. It allows the deployment of specialization principles.

1. The above statement is correct
2. The above statement is incorrect

Advantages of functional structures are:

1. Pooling of expertise, through the grouping of specialised tasks and staff.
2. No duplication of functions and economies of scale.
3. Senior managers are close to the operation of all functions.
4. The facilitation of management and control of functional specialists
5. All of the above

Disadvantages of functional structures are:

1. Focuses on internal processes/inputs rather than outputs such as quality and customer satisfaction through a horizontal value chain.
2. Struggles to cope with change, growth and diversification.
3. Senior management may not have time to address strategic planning issues.
4. All of the above

Divisional structures empower management teams and subdivide the structure into smaller structures with strategic reporting lines present. Holding company structures may be apparent and generally the structure divides on the bases such as:

1. Product-based structures divide the organisation along product lines. The basis of division will be the market and or product;
2. Geographical structures divide the structure along the lines of geography i.e. countries or areas and are common in multinational companies.
3. Both A&B
4. None

Advantages of Divisional structure include:

1. A concentration of staff and management expertise.
2. Faster response times to environment catalysts. Given the expertise and speed, better quality decisions must result.
3. Improved managerial motivation via empowerment. The harnessing of the ‘entrepreneurial’ skills.
4. All of the above

Disadvantages of Divisional structure include:

1. Potential for sub optimisation as the divisions take decisions to benefit themselves, possibly to the detriment of the overall company.
2. Increased cost arising from extra administration and the development and maintenance of the control system.
3. Both A&B
4. None

Matrix structure – structure in which dual reporting lines are recognized. Advantages of matrix structures are:

1. Organise horizontal groupings of individuals or units into teams that operationally deal with the strategic matter at hand.
2. Can creatively serve the needs of strategic change that otherwise might be constrained by more traditional structures.
3. Both A&B
4. None

Matrix structure can improve motivation through:

1. people working participatively in teams
2. specialists broadening their outlook
3. encouraging competition within the organization
4. All of the above

Strategic lenses – are the ways of viewing what can be meant by the term ‘strategy’. These are:

1. Strategy as design – This is the view that strategy formulation is a rational, logical process where information is carefully considered and predictions made. Strategic choices are made and implementation takes place.
2. Strategy as experience – This is the view that future strategies are based on experiences gained from past strategies.
3. Strategy as ideas. This is the view that innovation and new ideas are frequently not thought up by senior managers at the corporate planning level. Rather, new ideas will often be created throughout a diverse organization.
4. All of the above

Which of the following is correct for Transaction cost theory (TCT)?

1. Transaction cost theory (TCT) suggests that organisations choose between two approaches to control resources and carry out their operations.
2. If transaction costs are higher than the costs of hierarchical ownership, then a hierarchical approach is taken.
3. If transaction costs are lower than the costs of ownership, then a market solution is adopted.
4. All of the above

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MCQs on Strategy Introduction its Levels and Concepts

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MCQs on Strategy Introduction its Levels and Concepts