CME Strategic Management & Leadership 2 — Questions and Answers
Question 1: Which leadership style is most effective when followers are highly skilled and motivated but lack confidence in a specific task?
- Delegating
- Directing
- Coaching
- Supporting (Correct answer)
Correct answer: Supporting
Supporting (or participating) style provides encouragement and builds confidence while letting skilled individuals retain decision control.
Question 2: A company's strategic intent refers to:
- Its short-term operational goals
- Its long-term aspirational goal that stretches the organization's capabilities (Correct answer)
- Its annual budget allocation strategy
- Its competitive pricing position
Correct answer: Its long-term aspirational goal that stretches the organization's capabilities
Strategic intent is the ambitious long-term vision that energizes and directs all organizational efforts beyond current capabilities.
Question 3: In Porter's Five Forces model, 'buyer power' increases when:
- Buyers are fragmented and purchase in small volumes
- There are few substitute products available
- Buyers purchase large volumes and can easily switch suppliers (Correct answer)
- The industry has high switching costs for buyers
Correct answer: Buyers purchase large volumes and can easily switch suppliers
Buyer power is high when customers buy in large quantities and face low switching costs, giving them leverage to negotiate lower prices.
Question 4: The balanced scorecard approach to strategy execution measures performance across which four perspectives?
- Financial, Customer, Internal Processes, Learning & Growth (Correct answer)
- Revenue, Cost, Quality, Speed
- People, Process, Technology, Strategy
- Market, Operations, Finance, Innovation
Correct answer: Financial, Customer, Internal Processes, Learning & Growth
Kaplan and Norton's balanced scorecard links financial results to customer satisfaction, operational efficiency, and organizational learning.
Question 5: A CEO notices that middle managers consistently avoid escalating bad news. This is an example of:
- Organizational resilience
- Information cascading
- Organizational silence (Correct answer)
- Hierarchy optimization
Correct answer: Organizational silence
Organizational silence occurs when employees withhold negative information from leadership, often due to fear of reprisal or perceived futility.
Question 6: Which strategy involves a firm competing in multiple industries simultaneously to reduce overall risk?
- Vertical integration
- Horizontal integration
- Concentric diversification
- Conglomerate diversification (Correct answer)
Correct answer: Conglomerate diversification
Conglomerate diversification spreads risk by operating in unrelated industries, unlike concentric diversification which stays in related fields.
Question 7: When applying the VRIO framework, a resource is considered a 'sustained competitive advantage' only when it is:
- Valuable and rare
- Valuable, rare, and inimitable
- Valuable, rare, inimitable, and organized to exploit (Correct answer)
- Valuable and organized to exploit
Correct answer: Valuable, rare, inimitable, and organized to exploit
All four VRIO criteria—Valuable, Rare, Inimitable, and Organized—must be met for a resource to yield sustained competitive advantage.
CME Strategic Management & Leadership 2
Which leadership style is most effective when followers are highly skilled and motivated but lack confidence in a specific task?