What are an organization's goals based on? *

1 point

Its strategies

Its competitors' strategies

Its mission

Product or service

The prescriptive model of strategy development makes a number of simplifying assumptions that may not be valid in reality. Which of the following are examples of such assumptions? i) The environment is predictable. ii) Clear, conflict-free, planning processes are possible. iii) Strategy development should be a top-down process. iv) The process is independent of the organization's culture. *

1 point

i) and iii)

i), ii) and iii)

All of the above

i) and iv)

This measure highlights net cash flows from operations rather than reported income and produces a rate of return that can be compared with alternative company or market rates of return (the cost of capital) *

1 point

Cash flow return on investment

Cash flow return of investment

Economic Value Added

Total Shareholders Return

Which of the following is not a key stage in the prescriptive approach to strategy according to Wheelen and Hunger? *

1 point

Environmental scanning: the external opportunities and threats of the SWOT analysis

Strategy formulation: mission, objectives, strategies and policies

Evaluation and control: to ensure that the strategic process remains on its predicted path

Defining the mission: this may also involve a vision statement

These criteria attempt to measure the extent to which the proposed strategies fit the situation identified in the strategic analysis *

1 point

Criteria of Suitability

Criteria of Feasibility

Criteria of Sustainability

Criteria of Acceptability

The external elements of a SWOT analysis are: *

1 point

S and W

S and O

T and O

W and T

Content is one of the elements of strategy selection that needs to be distinguished. What does the term 'content' refer to? *

1 point

The broader view of future developments

The way that the strategy is developed and selected

The appropriateness of the strategic context of the strategy, both internally and externally

The actual strategy selected -- what is in the plan?

A __________ is an examination and evaluation of areas affected by the operation of a strategic management process within an organization *

1 point

strategic audit

sustainability reporting

strategy

systematic audit

The followings are Advantages of CFROI except *

1 point

It takes into account the cash flow from the operating activities which effectively captures actual cash flow

It avoids the shortcomings of various accounting adjustments.

It is helpful in comparing of companies with a varied scale of operations.

This metric is not very useful in the case of start-ups because their operations are associated with large capital outlays coupled with low or negative cash flows.

What is the formula to calculate economic value added? *

1 point

Net profit - WACC

Revenue - (capital invested * WACC)

Net profit, after tax - WACC

Net profit, after tax - (capital invested * WACC)

The following are the three principal elements in a strategic system except, *

1 point

Formulation

Implementation

Results

Presentation

The following are key characteristics of Good KPIs, except *

1 point

Accessible

Relevant

Responsive

Ambitious

Return on Investment (ROI) is a performance measure used for investment centers. Which of the following statements about ROI is incorrect? *

1 point

ROI is computed by dividing a segment's income by the invested capital

ROI is subject to numerous possible manipulations of the income and investment amounts, so that a manager may decide not to invest in a project that will yield less than the desired rate of return, he/she may defer necessary expenses just to improve his/her ROI

ROI is superior to residual income method

The use of ROI may not be appropriate when the average age of assets differs substantially across segments of a business

What is 'sensitivity analysis'? *

1 point

A way of evaluating how market oriented an organisation is, i.e. how responsive to market needs

A technique for determining how aware managers are of the needs of their staff

A technique for determining how susceptible cash flow is to changes in market growth rates

A technique for evaluating how the outcomes of a strategy vary when its underlying assumptions are change