CBO Strategic Planning & Leadership 4 — Questions and Answers
Question 1: Which type of diversification involves a company entering an industry unrelated to its current business?
- Horizontal diversification
- Vertical diversification
- Conglomerate diversification (Correct answer)
- Concentric diversification
Correct answer: Conglomerate diversification
Conglomerate (unrelated) diversification occurs when a company expands into industries with no operational or strategic connection to its existing business.
Question 2: A transformational leader primarily motivates followers by:
- Offering monetary rewards for task completion
- Appealing to higher ideals and inspiring a shared vision (Correct answer)
- Setting strict performance quotas
- Micromanaging daily activities
Correct answer: Appealing to higher ideals and inspiring a shared vision
Transformational leaders inspire change by appealing to followers' values and vision, elevating motivation beyond simple transactional exchanges.
Question 3: In a SWOT analysis, a company's aging technology infrastructure would be classified as a:
- Strength
- Weakness (Correct answer)
- Opportunity
- Threat
Correct answer: Weakness
An aging technology infrastructure is an internal limitation, placing it in the Weakness quadrant of a SWOT analysis.
Question 4: Strategic control differs from operational control primarily because strategic control:
- Focuses on daily task efficiency
- Monitors whether the strategy itself remains valid as the environment changes (Correct answer)
- Only measures financial performance quarterly
- Is performed solely by frontline managers
Correct answer: Monitors whether the strategy itself remains valid as the environment changes
Strategic control evaluates whether the chosen strategy still fits the evolving competitive environment, not just whether execution meets short-term targets.
Question 5: Which growth strategy involves a company buying one of its suppliers to control inputs?
- Forward vertical integration
- Backward vertical integration (Correct answer)
- Horizontal integration
- Market penetration
Correct answer: Backward vertical integration
Backward vertical integration occurs when a company acquires or controls its upstream suppliers to secure inputs and reduce dependency.
Question 6: Emotional intelligence (EQ) is considered critical for effective leadership because it enables leaders to:
- Memorize large volumes of technical data
- Recognize and manage their own emotions and empathize with others (Correct answer)
- Automate repetitive business processes
- Reduce the need for strategic planning
Correct answer: Recognize and manage their own emotions and empathize with others
High EQ allows leaders to regulate their own emotions, empathize with team members, and navigate interpersonal dynamics effectively.
Question 7: A CBO reviews the company's value chain to find cost reduction opportunities. The value chain concept was introduced by:
- Peter Drucker
- Michael Porter (Correct answer)
- Henry Mintzberg
- Clayton Christensen
Correct answer: Michael Porter
Michael Porter introduced the value chain framework in his 1985 book 'Competitive Advantage' to analyze primary and support activities that create value.
CBO Strategic Planning & Leadership 4
Which type of diversification involves a company entering an industry unrelated to its current business?