J. K. SHAH CLASSES INTER C.A. – S.M.

CHAPTER 1 INTRODUCTION TO STRATEGIC MANAGEMENT

CHAPTER 1 - INTRODUCTION TO STRATEGIC ANAGEMENT
Business Policy:
Definition: According to Christensen, Business Policy is the study of
i. The functions and responsibilities of senior management.
ii. The crucial problems that affect the success of the total enterprise.
iii. The decisions that determine the direction of the organisation and shape its
future.

Importance:
i. Business Policy mainly stresses on the rational and analytical aspects of
strategic management and strategic decision making.
ii. Business Policy presents a framework for understanding strategic decision
making.
iii. This framework helps managers in handling general management
responsibilities.

Evolution:
i. Business Policy was first introduced in Harvard Business School in 1911. It was
an integrative course in management, based on interactive case studies.
ii. The course was aimed at enhancing the general managerial capability of
students.
iii. However the introduction of business policy in the curriculum of other business
schools/ management institutes came much later.

Concept of management: The term management can be used in 2 major context

People view: Management refers to Key Functional view: It is a set of

Group of people in an organisation interrelated functions and processes
incharge of its affairs. The survival and performed by those managers. These
success of an organisation depend to a functions may range from design of the
large extent on the competence and organisation, determination of goals,
character of its management. mobilisation and organisation of
recourses, allocation of tasks among the
personnel to achieve its objectives.

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Strategy:
• The term strategy has been derived from
the Greek word ‘strategos’ which means
general in command of troops or the art of
the general or plan to destroy enemies
through effective use of resourcesi.e. the
act of the army General to win over the
enemy (to defeat the enemy to prevail
over the enemy).
• Business today is like fighting a war & Businessmen have to respond to the
dynamic & hostile (unfriendly) Environment. Every businessman make use of
strategies to face the tricks of his enemy (rivals).

Meaning & Definition:

i. Strategy may be defined as a long-range blueprint of an organisation desired
image, direction & destination i.e. what it wants to be? what it wants to do?
And where it wants to go?
ii. According to William F. Glueck, “A Strategy is a unified, comprehensive and
integrated plan designed to assure that the basic objectives of the enterprise
are achieved”.
iii. Strategy is consciously considered and flexibly designed scheme of corporate
intent and action

To achieve effectiveness

To mobilise resources

To direct effort and behaviour

To handle events and problems

Corporate survival and success
iv. Strategy is a game plan used by the management

to achieve the desired market position

conduct operations

attract and satisfy customers

compete successfully

and achieve organisational objectives

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Characteristics of Strategy
1) Forward Looking: Strategy is forward looking it defines in broad terms the
action which an organisation proposes to take in future.
2) Designed to move: Strategy is designed to move an organisation from its
current position to the desired future position, without a strategy an
organisation is like a ship without a rudder going around in circles.
3) No substitute for Sound, alert and responsible management:Strategy is not a
substitute for sound, alert and responsible management. It provides a
directions and support to the management. Strategy formulation should be
complemented with strategy implementation to achieve objectives.
4) Never be Flawless & Optimal:Strategy can never be perfect flawless & optimal
it means strategies may fail if there are loopholes in formulation or
implementation. Similarly, it may also fail due to changes in Environment e.g.
Nokia Nano.
5) Strategy is partly proactive and partly reactive:Proactive refers to actions on
the part of managers to improve the company’s market position, competitive
Advantage and financial performance by deciding and planning in advance e.g.
electric vehicle.
However, if a company’s strategy is developed as a response to unanticipated
developments, it is known as reactive strategy. e.g. Airtel changing its tariff
rates on introduction of JIO.
6) Pragmatic & Flexible: Strategy needs to pragmatic (practical) & flexible as per
the situation.
7) No Magics and Tricks:Strategy is not a bundle of tricks and magics it involves
critical thinking and commitment of resources to action.
8) Required in all organisations: Every organisation whether it is large or small
requires strategies. These organisations irrespective of their sizes face similar
Business Environment and face competition. Small organisation must plan
strategies for their success in the Market where large organisation are also
present.

S. No. Questions
1. State with reasons which of the following statements is correct/ incorrect:
i. Strategy is a substitute for sound, Alert and responsible management
ii. Strategies are perfect, flawless and optimal organisational plans
iii. A Company’s strategy has always to be proactive in nature
iv. Strategic actions are always in reaction to the changes in environment

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2. Strategy is partly proactive and partly reactive. Elaborate.
3. Yummy Foods and Tasty Foods are successfully competing in the business
of ready to eat snacks in Patna. Yummy has been pioneer in introducing
innovative products. These products will give them good sale. However
Tasty Foods will introduce similar products in reaction to the products
introduced by the Yummy Foods taking away the advantage gained by the
former.
Discuss the strategic approach of the two companies. Which is Superior?

Strategic Management
Strategic management refers to a
management process of
- Developing a strategic vision
- Setting objectives
- Crafting strategies &
- Implementing & Evaluating strategies
- And initiating corrective adjustments
- Whenever deemed appropriate
S. No. Questions
1. State with reasons which of the following statements is correct/ incorrect:
Developing annual objectives &short term strategies that are compatible
with the selected set of long term objectives are one of the major task of
Strategic Management.

Features of strategic Management

a Strategic Management is basically a process consisting of several activities
which are performed in a systematic & sequential manner.
b Vision in simple term refers to the dream that an organisation wants to
achieve. It answers the question “where you want to be and what kind of
organisation you are trying to create.
c Once the vision is decided the objective of the organisation must be set
objectives are specific expressed numerically.
d Once the vision and objectives are decided then strategies are made, there
strategic are made by the top middle & lower level i.e. corporate business and
functional level.
e The strategies are then implemented & evaluated periodically to ensure that
the organisation is moving in the right direction.
f Finally, if the organisation in not able to achieve its objectives that corrective
action is taken to bring the organisation back on the tracks.
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Objectives of strategic Management: The basis objectives of strategic management
are:
a To create competitive advantage (Xerox / Cadbury) so that the company can
gain advantage over competition and dominate the Market.
b To guide the company through all changes in Environment.

Need / Importance / Benefits of strategic management.

• Direction to the Company: The strategic management gives a direction to the
company to move ahead. It defines the goals and mission. It helps management
to define realistic objectives and goals which are in line with the vision of the
company.
• Proactive instead of Reactive: Strategic management helps organisations to be
proactive instead of reactive in shaping its future. Organisations can analyse
and take actions instead of being mere spectators.
Thereby they are able to control their own destiny in a better manner. It helps
them in working within vagaries (notions) of environment and shaping it,
instead of getting carried away by its turbulence or uncertainties.
• Framework for all major decisions: for Strategic management provides
framework for all major decisions of an enterprise such as decisions on
businesses, products, markets, manufacturing facilities, investments and
organisational structure. It provides better guidance to entire organisation on
the crucial point - what it is trying to do.
• Futuristic: Strategic management seeks to prepare the organisation to face the
future and act as pathfinder to various business opportunities. Organisations
are able to identify the available opportunities and identify ways and means as
how to reach them.
• Corporate Defence Mechanism: Strategic management serves as a corporate
defence mechanism against mistakes and pitfalls. It helps organisations to
avoid costly mistakes in product market choices or investments.
• Enhance Longevity: Strategic management helps to enhance the longevity
(durability) of the business. With the state of competition and dynamic
environment it may not be possible for organisations to survive in long run. It
helps the organization to take a clear stand in the related industry and makes
sure that it is not just surviving on luck.
• Develop Core Competence and Competitive Advantage: Strategic
management helps the organisation to develop certain core competencies and
competitive advantages that would facilitate assist in its fight for survival and
growth.

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S. No. Questions
1. Organisations sustain superior performance over a long period of time
inspite of the rapid changes taking place continually in its competitive
environment if they implement strategic management successfully.
Discuss.

Limitations of Strategic Management : The presence of strategic management

cannot counter all hindrances and always achieve success. There are limitations
attached to strategic management. These can be explained in the following lines:
• Complex and Turbulent Environment:
Environment is highly complex and turbulent. It
is difficult to understand the complex
environment and exactly pinpoint how it will
shape-up in future. The organisational estimate
about its future shape may awfully go wrong
and jeopardise all strategic plans. The environment affects as the organisation
has to deal with suppliers, customers, governments and other external factors.

• Time Consuming:Strategic management is a

time-consuming process. Organisations spend a
lot of time in preparing, communicating the
strategies that may impede daily operations and
negatively impact the routine business.

• Costly:Strategic management is a costly process.

Strategic management adds a lot of expenses to
an organization. expert strategic planners need
to be engaged, efforts are made for analysis of
external and internal environments devise
strategies and properly implement. These can
be really costly for organisations with limited resources particularly when small
and medium organisation create strategies to compete.

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• Difficulty in estimation of Competitive responses: In a competitive scenario,
where all organisations are trying to move strategically, it is difficult to clearly
estimate the competitive responses to a firm’s strategies.
S. No. Questions
1. State with reasons which of the following statements is correct/ incorrect:
i. Strategic Management involves huge cost.
ii. Information gathering and deep analysis can eliminate uncertainty.
2. Define Strategic Management. Also discuss the limitations of Strategic
Management

Strategic levels in Organisations

DIFFERENT LEVELS OF MANAGEMENT

There are three main levels of management namely corporate, business and
functional.
1. Corporate level / Top level: It consists of CEO, Board of directors, senior
executives. General Manager of company etc. Their role is:
• Development of strategies for the whole organization
• Defining the mission and goals of organization
• Determining what businessit should be in
• Allocating resources among different businesses
• Formulating and implementing strategies to cover all businessesof firm
• Provide leadership for the organization.
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2. Business level / Middle level / Divisional level:It consists Manager of the
particular business or division their role is:
• Translate the statements of directions and intentgenerated at corporate
level into corporate objectives and strategies for individual business
divisions or SBUs (Strategic Business Units).
• Determine how the firm will compete in selected product market areas.
• They are held responsible for the performance of the concerned
business.

In a single product company, the corporate level strategy serves the whole
business and this strategy is implemented through functional strategies. Hero
Motor Corp is a manufacture and seller of motorcycles and is therefore, a single
product company. A single strategy is neither adequate nor appropriate for multi-
product line companies.
ITCis a diversified company that operates in several businesses like tobacco
products, hotels, paper, food, readymade garments, etc. These different businesses
are organised as different divisions known as strategic business units or profit
centres.

A Strategic Business Unit (SBU) is "any part of a business organisation which is

treated separately for strategic management purpose".
Each SBU has a clearly defined product/market segment and has its own strategy.
Physical and human resources are allocated to each SBU according to its needs and
contribution to the achievement of overall objectives of the organisation.

Characteristics of SBUs: For a product or service to be classified as a SBU, it is

necessary that it must have following characteristics.
1. It can be a single business or collection of the related businesses(backward or
forward integrated – explained in 4th chapter) which can be planned for profits
and activities, independent of the rest of the company.
2. It has its own group of competitors competing with the business.
3. The unit has a CEO who is responsible for strategically managing the business
and for creation profits.
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Functional level / Low level/Bottom Level / Field level / Operations level : It
consists of Operational level managers handling individual functions. e.g:
production, marketing, Human Resource, R&D. Their role is:
• Responsible for specific functions of specific business.
• Major strategic role to develop functional strategies in their area that help fulfil
the strategic objectives set by business and corporate level managers.
• Since they have direct contacts with customers, they provide most of the
information to enable business level and corporate level managers for
developing their plans.

S. No. Questions
1. State with reasons which of the following statements is correct/ incorrect:
Corporate Level Managers can be viewed as the guardians of shareholders.
2. You are appointed as a Strategic Manager by XYZ Co. Ltd. Being a Strategic
Manager what should be your tasks to perform?
3. List the different strategic levels in an organisation.

ROLE OF STRATEGIC MANAGEMENT IN NON PROFIT ORGANIATIONS:

i. Similar to commercial organisations ‘not for profit’ organisations must also
have Vision, Mission and Strategies.
ii. Strategic Management is required to give direction, focus and lead to
optimum utilisation of resources.
iii. They also have to work within the environment and need to manage
strategically to achieve their objectives.
iv. They also need to have funds and other resources just like any other non –
profit organisation as NPO’s are dependent on outside financing and Strategic
Management provides an excellent medium for developing and justifying
requests for needed financial support.

Strategic management in Educational institutions.

i. Education is considered to be a noble
profession.
ii. An educational institution often functions as a
not-for-profit organization managed by trusts
and societies. They include schools, colleges and
universities.
iii. Being inherently non-commercial in nature,
educational organisations do not have cut-
throat competition as in case of their
commercial counterparts.
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iv. However, as the number of institutions belonging to both public and private
sector are increasing, the competition is gradually rising.
v. The educational delivery system has also undergone considerable changes with
introduction of computers and internet technologies.
vi. These days students access lectures anytime and chat at fixed time with
professors.
vii. Online college degrees are becoming common and represent a threat to
traditional colleges and universities.
viii. Through the use of strategic management techniques such institutions are
expected to concentrate attention towards:
• Getting better name and recognition.
• Attracting talented students.
• Designing the curriculum in such a way to provide better citizen and
ensure employability.
• Appointing and retaining quality faculty for teaching.
• Preparing students for the future challenges by capacity building.

Strategic management in Medical organisations.

i. Hospitals are creating new
strategies today as advances in
the diagnosis and treatment of
chronic diseases are
undercutting that earlier mission.
ii. Hospitals are beginning to bring
services to the patient as much
as bringing the patient to the
hospital.
iii. Pathological laboratories have
started collecting door-to-door
samples.
iv. Chronic care will require day-
treatment facilities, electronic monitoring at home, user-friendly ambulatory
services, decentralized service networks, and laboratory testing.
• A successful hospital strategy for the future will require renewed and
deepened collaboration with physicians, who are central to hospitals'
well - being, and a reallocation of resources from acute to chronic care in
home and community settings.

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• Backward integration strategies that some hospitals are pursuing include
acquiring ambulance services, waste disposal services, and diagnostic
services. Millions of persons research medical ailments online, which is
causing a dramatic shift in the balance of power between doctor, patient,
and hospitals.
• The whole strategic landscape of healthcare is changing because of the
Internet. Intel recently began offering a new secure medical service
whereby doctors and patients can conduct sensitive business on the
Internet, such as sharing results of medical tests and prescribing medicine.

• The ten most successful hospital strategies today are :

- providing free-standing - cardiac rehabilitation centres
- outpatient surgery centres - preferred provider services
- outpatient surgery & diagnostic - skilled nursing units – psychiatric
centres services
- physical rehabilitation centres - industrial medicine services
- home health services - women's medicine services

Strategic Management in Government agencies and departments.

• Central, state, municipal agencies, Public Sector Units, departments are
responsible for formulating, implementing, and
evaluating strategies that use taxpayers' money
in the most cost-effective way to provide services
and programs. Strategic-management concepts
increasingly are being used to enable some
organizations to be more effective and efficient.
• But strategists in governmental organizations
operate with less strategic autonomy than their
counterparts in private firms. Public enterprises
generally cannot diversify into unrelated
businesses or merge with other firms.
Governmental strategists usually enjoy little
freedom in altering the organizations' missions or
redirecting objectives. Legislators and politicians often have direct or indirect
control over major decisions and resources. Strategic issues get discussed and
debated in the media and legislatures. Issues become politicized, resulting in
fewer strategic choice alternatives.
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• But in government agencies and departments are finding that their employees
get excited about the opportunity to participate in the management process
and thereby have an effect on the organization's mission, objectives,
strategies, and policies. In addition, government agencies are using a strategic
management approach to develop and substantiate formal requests for
additional funding.
S. No. Questions
1. State with reasons which of the following statements is correct/ incorrect:
i. Non Profit organisations do not require Strategic Management.
ii. Strategic Management is not needed in Non Profit Organisations.
2. Strategic Management concepts are useful for educational institutions.
Explain with reasons.

S. No. RTP Questions

1. `Do Good Group’ is a not-for-profit organization based in northern India
working towards childcare. The group educates people towards
immunization, sanitation and works in coordination with local hospitals or
medical centers. Recently, a new team has taken over the management of
its activities. Explain whether tools of strategic Management are relevant
for the group.
2. Are there any limitations attached to strategic management in
organizations? Discuss.
3. Health Wellnow is a Delhi based charitable organisation promoting
healthy lifestyle amongst the office-goers. It organises free of cost
programmes to encourage and guide office-goers on matters related to
stress relief, yoga, exercises, healthy diet, weight management, work-life
balance and so on. Many business organisations and resident welfare
associations are taking services of Health Wellnow in Delhi and adjoining
areas and make financial contributions to its cause. The Health Wellnow is
able to generate sufficient funds to meet its routine expenses. How far
strategic management is relevant for Health Wellnow? Discuss.
4. Explain the difference between three levels of strategy formulation.

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5. Ramesh Sharma has fifteen stores selling consumer durables in Delhi
Region. Four of these stores were opened in last three years. He believes
in managing strategically and enjoyed significant sales of refrigerator,
televisions, washing machines, air conditioners and like till four years back.
With shift to the purchases to online strores, the sales of his stores came
down to about seventy per cent in last four years. Analyse the position of
Ramesh Sharma in light of limitations of strategic management.
6 “Strategy is partly proactive and partly reactive.” Discuss.
7. Strategic management helps an organization to work through changes in
environment to gain competitive advantage. In light of statement discuss
its benefits.

MULTIPLE CHOICE QUESTIONS

1. Which of the following is associated with successful strategies?
(a) Creating superior value to customers
(b) Exploitation of key success factors
(c) Creating and maintaining strategic fit
(d) All of the above

2. Which of the following requires a firm to establish annual objectives, devise,

policies, motivates employees and allocate resources for the execution of
strategies?
(a) Strategy formulation (b) Strategy evaluation
(c) Strategy implementation (d) Strategy estimation

3. The three stages of strategic management are:

(a) Strategy formulation, strategy implementation and strategy execution
(b) Strategy formulation, strategy execution and strategy assessment
(c) Strategy formulation, strategy implementation and strategy evaluation
(d) Strategy assessment, strategy execution and strategy evaluation

4. Which of the following is not a major element of the strategic management

process?
(a) Formulating strategy (b) Implementing strategy
(c) Evaluating strategy (d) Assigning administrative tasks

5. ___________________ of an organization deals with investigation of

organizational strengths and weaknesses by focusing on factors which are
relevant to it.
(a) External analysis (b) Internal analysis
(c) Industry analysis (d) Business analysis
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6. The means by which long-term objectives will be achieved are:
(a) Mission statements (b) Strategies
(c) Vision statements (d) Long-term goals

7. The strategic management process is:

(a) A set of activities that is guaranteed to prevent organizational failure
(b) A process concerned with a firm’s resources, capabilities, and
competencies, but not the conditions in its external environment
(c) A set of activities that to date have not been used successfully in the not-
for-profit sector
(d) A dynamic process involving the full set of commitments, decisions, and
actions related to the firm

8. Middle level managers typically are responsible for strategies:

(a) Business (b) Organizational
(c) Operational (d) Corporate

9. Which of the following statements best describes strategic management?

(a) A process consisting of determining objectives and strategic actions to
achieve those objectives
(b) A process consisting of determining objectives, strategic actions to achieve
those objectives, the implementation of desired strategy, and the
monitoring of that strategy
(c) A process consisting of the determination of direction, strategic actions to
achieve objectives, the implementation of desired strategy, and
monitoring of that strategy
(d) A process for determining direction, strategic actions to achieve
objectives, and the implementation of desired strategy.

10. _____________________ is the game plan that the management of a business

uses to take market position, conduct its operations, attract and satisfy
customers, complete successfully, and achieve organizational objectives.
(a) Management (b) Strategy (c) Vision (d) Mission

11. ________________ as a long range blueprint of an organization’s desired

image, direction and destination, i.e., what it wants to be, what it wants to do
and where it wants to go.
(a) Management (b) Strategy (c) Vision (d) Mission

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12. _________________ provides an integrated framework for the top
management to search for, evaluate and exploit beneficial opportunities, to
perceive and meet potential threats and crises, to make full use of the
resources and strengths, to offset corporate weaknesses.
(a) Management (b) Strategy (c) Vision (d) Mission

13. ______________ is no substitute for sound, alert and responsible

management.
(a) Strategy (b) Vision (c) Mission (d) Goals

14. _______________ can never be perfect, flawless and optimal.

(a) Strategy (b) Vision (c) Mission (d) Goals

15. The very nature of strategy that it is ___________and pragmatic.

(a) Flexible (b) Rigid (c) Sound (d) Alert

16. Even in ________________ strategy, allowances are made for possible

miscalculations and unanticipated events.
(a) Sound (b) Unsound (c) Stable (d) Unstable

17. _______________ Strategies are formulated by the top managers.

(a) Corporate levels (b) Divisional levels
(c) Functional levels (d) None of the above

18. Strategy is partly _________________ and partly _______________.

(a) Proactive, Reactive (b) Reactive. Proactive
(c) Reactive, Reactive (d) Proactive, Proactive

19. _____________________ refers to the managerial process of developing a

strategic vision, setting objectives, crafting a strategy, implementing and
evaluating the strategy, and initiating corrective adjustments were deemed
appropriate.
(a) Strategic management (b) Strategy evaluation
(c) Strategy implementation (d) Strategy estimation

20. Survival of fittest as propagated by __________________.

(a) Charles Darwin (b) Igor Ansoff
(c) Michael Porter (d) C.K.Prahalad and Gary Hamel

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21. The major benefits of strategic management are:
(a) Environment is highly complex and turbulent
(b) Strategic management helps organizations to be proactive instead of
reactive
(c) Strategic management is a time consuming process
(d) Strategic managementis a costly process

22. The major benefits of strategic management are:

(a) Environment is highly complex and turbulent
(b) The Strategic management gives a direction to the company to move
ahead
(c) Strategic management is a time consuming process
(d) Strategic management is a costly process

23. The major benefits of strategic management are:

(a) Environment is highly complex and turbulent
(b) Strategic management provides framework or all major decisions of an
enterprise
(c) Strategic management is a time consuming process
(d) Strategic management is a costly process

24. Limitations of Strategic Management:

(a) Environment is highly complex and turbulent
(d) Strategic management is a time consuming process
(c) Strategic management is a costly process
(d) All of the above

25. There are three main levels of management:

(a) Corporate levels (b) Business levels
(c) Functional levels (d) All of the above

26. The __________________ consists of the Chief Executive Officer (CEO), other
senior executives, the board of directors, and corporate staff.
(a) Corporate level of management
(b) Business levels of management
(c) Functional levels of management
(d) All of the above

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27. ____________________ individuals participate in strategic decision making
within the organization.
(a) Corporate level of management
(b) Business levels of management
(c) Functional levels of management
(d) All of the above

28. The role of __________________ is to oversee the development of strategies

for the whole organization.
(a) Corporate level of managers (b) Business levels of managers
(c) Functional levels of managers (d) All of the above

29. _______________________ defines the mission and goals of the organization.

(a) Corporate level of managers (b) Business levels of managers
(c) Functional levels of managers (d) All of the above

30. _____________________ determines what businesses it should be in,

allocating resources among the different businesses, formulating and
implementing strategies that span individuals businesses, and providing
leadership for the organisation.
(a) Corporate level of managers (b) Business levels of managers
(c) Functional levels of managers (d) All of the above

31. ________________ are responsible for the specific business functions or

operations that constitute a company or one of its divisions.
(a) Corporate level of managers (b) Business levels of managers
(c) Functional levels of managers (d) All of the above

32. ________________ Sphere of responsibility is generally confined to one

organizational activity.
(a) Corporate level of managers (b) Business levels of managers
(c) Functional levels of managers (d) All of the above

33. _______________ provide a link between the people who oversee the
strategic development of a firm and those who own it (the shareholders).
(a) Corporate level of managers (b) Business levels of managers
(c) Functional levels of managers (d) All of the above

34. _____________, and particularly the CEO, can be viewed as the guardians of
shareholder welfare.
(a) Corporate level of managers (b) Business levels of managers
(c) Functional levels of managers (d) All of the above
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35. ________________ are responsible to ensure that the corporate and business
strategies that the company pursues are consistent with maximizing
shareholder wealth.
(a) Corporate level of managers (b) Business levels of managers
(c) Functional levels of managers (d) All of the above

36. The strategic role of _________________ managers is to translate the general

statements of direction and intent that come from the corporate level into
concrete strategies for individuals businesses.
(a) Corporate level of managers (b) Business levels of managers
(c) Functional levels of managers (d) All of the above

37. ________________ are concerned with strategies that span individual

businesses.
(a) Corporate level of managers (b) Business levels of managers
(c) Functional levels of managers (d) All of the above

38. ________________ are concerned with strategies that are specific to a

particular business.
(a) Corporate level of managers (b) Business levels of managers
(c) Functional levels of managers (d) All of the above

39. ______________ provide most of the information that makes it possible for
business and corporate-level general managers to formulate realistic and
attainable strategies.
(a) Corporate level of managers (b) Business levels of managers
(c) Functional levels of managers (d) All of the above

40. ______________ themselves may generate important ideas that subsequently

may become major strategies for the company.
(a) Corporate level of managers (b) Business levels of managers
(c) Functional levels of managers (d) All of the above

41. The main aim of non-commercial organization is:

(a) Profit
(b) Provide services to members, beneficiaries or public at large
(c) Both of the above
(d) None of the above

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42. Hospitals are pursuing include acquiring ambulance services, waste disposal
services, and diagnostic services is called as ______________.
(a) Backward integration strategies
(b) Horizontal integration strategies
(c) Forward integration strategies
(d) Conglomerate strategies

43. _____________________ individuals occupy the apex of decision making

within the organization.
(a) Corporate level of managers
(b) Business levels of managers
(c) Functional levels of managers
(d) All of the above

44. Which of the following statement is not true with regards to strategy?
(a) Strategy reduces uncertainty
(b) Strategy is long range blueprint of desired position
(c) Strategy relates organizations to the external environment
(d) Strategy is perfect and flawless

45. The strategic management process is:

(a) A solution that guarantees prevention of organizational failure
(b) Concerned with a resources, capabilities, and competencies, but not the
conditions in its external environment
(c) Not to be used in the not-for-profit organisations
(d) Full set of commitments, decisions, and actions related to the firm.

46. In a large organization, strategic management activities occur at what level(s) ?

(a) Corporate and divisional only
(b) Divisional
(c) Strategic business unit only
(d) Functional, divisional, and corporate

47. ___________________ are concerned with strategies that span individuals

businesses.
(a) Corporate level of managers
(b) Business levels of managers
(c) Functional levels of managers
(d) All of the above

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J. K. SHAH CLASSES INTER C.A. – S.M.
48. _____________________ are concerned with strategies that are specific to a
particular business.
(a) Corporate level of managers (b) Business levels of managers
(c) Functional levels of managers (d) All of the above

49. Strategic management allows an organization to be more

(a) Authoritative (b) Participative
(c) Commanding (d) All of the above

50. Read the following three statements:

(i) Strategies have short-range implications.
(ii) Strategies are action oriented.
(iii) Strategies are rigidly defined
From the combinations given below select an alternative that represents
statements that are true:-
(a) (i) and (ii) (b) (i) and (iii)
(c) (ii) and (iii) (d) (i), (ii) and (iii)

51. Strategic management enables an organization to ________________ instead

of companies just responding to threats in their business environment.
(a) be proactive (b) determine when the threat will subside
(c) avoid the threats (d) defeat their competitors

52. Reactive strategy can also be termed as –

(a) Planned strategy (b) Adaptive strategy
(c) Sound strategy (d) Dynamic strategy

ANSWERS TO MULTIPLE CHOICE QUESTIONS

Qsn. Ans. Qsn. Ans. Qsn. Ans. Qsn. Ans. Qsn. Ans.
1 d 2 c 3 c 4 d 5 b
6 b 7 d 8 a 9 c 10 b
11 b 12 b 13 a 14 a 15 a
16 a 17 a 18 a 19 a 20 a
21 b 22 b 23 b 24 d 25 d
26 a 27 a 28 a 29 a 30 a
31 c 32 c 33 a 34 a 35 a
36 b 37 a 38 b 39 c 40 c
41 b 42 a 43 a 44 d 45 d
46 d 47 a 48 b 49 d 50 a
51 a 52 B

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