Lesson 3.10.4
3.10.4 Problems with strategy and why strategies fail Quiz: AQA Business, Unit 10
20 questions
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Lesson 3.10.4, Problems with strategy and why strategies fail: 20 multiple choice questions for the AQA Business (7132), Unit 10: Managing strategic change, written with Revision Ninja.
Host it live on the board and students join with a game code on their own devices, or revise alone with Free Play. The answers are revealed in the game.
The 20 questions
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What is the difference between planned and emergent strategy?
- Emergent strategy is set by government regulators, whereas planned strategy is set by the managers of the firm
- Planned strategy is deliberately designed in advance, whereas emergent strategy arises from actions and learning over time
- Planned and emergent strategy are identical, because both are fully designed in advance by the board
- Planned strategy arises by chance from daily decisions, whereas emergent strategy is always set in a formal plan
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What is strategic drift?
- A sudden change of strategy that is caused by a government decision to alter the rules on competition
- A gradual loss of competitive relevance as a business fails to adapt its strategy to changes in its environment
- A decision by managers to move the business into an entirely new market in a single, planned step
- A situation in which the firm's strategy is so detailed that staff cannot follow it in practice
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Which is a reason why strategic drift can occur?
- Managers review the strategy every week, so that it is always in line with changes in the market
- The business has an excessively large number of customers, which makes it unnecessary to revise its approach
- The business has no competitors, so there is no pressure for the strategy to change over time
- Managers fail to review the strategy as market conditions change, so it becomes out of step with customer needs
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Which of these is a difficulty of strategic decision making?
- Decisions never affect the firm's long-term performance, so they can be taken without any concern for the outcome
- Decisions must be made under uncertainty with incomplete information about future conditions
- Decisions are always made with complete and certain information about every future market and competitor
- Decisions are made only once a year, so managers never have to consider any change in the business
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Why might a firm's strategy fail to be implemented as planned?
- Strategies are always implemented perfectly because managers are never wrong about what needs to be done
- Staff may resist the change, resources may be insufficient, or the plan may be unrealistic
- Resources are always sufficient for any plan, so the implementation of strategy never falls short in practice
- Staff always carry out every plan exactly as it is written, without any difference from the original intention
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Which of these is a reason a business may need strategic planning?
- It removes all uncertainty about the future, so managers can be confident of every outcome in the market
- It means that the business never needs to adapt its approach, because the plan will remain valid for ever
- It replaces the need for performance monitoring, because a plan guarantees that targets will be met
- It provides direction and co-ordination, helping the business focus resources on agreed goals
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Evaluate the value of strategic planning for a business operating in a fast-changing market.
- Planning should be abandoned entirely, because a business in a fast-changing market should only react to events as they happen
- Planning guarantees success in every market, so fast change does not affect the value of the plan at all
- Planning gives direction, but in fast-changing markets the plan must be flexible and reviewed so emergent elements can be included
- Planning is worthless in a fast-changing market, because managers should never set any direction for the business at all
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How can a business evaluate its strategic performance?
- By asking only the chief executive whether the strategy feels successful, without any measurement or comparison
- By waiting until the business is closed down to see whether the strategy was effective or not in its life
- By comparing actual results with objectives and benchmarks, using both financial and non-financial measures
- By relying only on the profit reported in the most recent year, which shows all that matters about strategy
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Why is it important to evaluate strategic performance regularly?
- It is only needed for legal compliance, so managers can ignore the results of the evaluation for decision making
- It is unnecessary because the strategy never changes its effectiveness once it has been implemented in full
- It allows managers to detect drift early and adjust the strategy before its position weakens significantly
- It is only needed once, at the end of the strategy, so that a final judgement can be recorded for the accounts
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What is a limitation of relying only on financial measures to evaluate strategic performance?
- They are always accurate and complete, so they ignore nothing that matters to the business in any period
- They may ignore customer, employee and environmental factors that affect long-term success
- They always measure the same things in every business, so they cannot distort performance judgements
- They cannot be calculated at all, so managers must rely on non-financial measures for every decision they take
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Which of the following is a difficulty in evaluating strategic performance?
- It can be ignored entirely, because strategies always succeed or fail in an obvious and immediate way
- It is always simple, because the effect of a strategy is easy to isolate from every other factor in the business
- It only applies to strategies in the public sector, so private firms face no difficulty when evaluating them
- It can be hard to separate the effect of the strategy from the effect of external factors such as market changes
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Why do some firms adopt a mix of planned and emergent strategy?
- To make the strategy impossible to understand, which discourages competitors from copying it in the market
- To avoid making any decisions, so that the business simply reacts to events without any direction at all
- To ensure that all decisions are made by chance, so that no manager can be held responsible for results
- To set clear direction while remaining able to learn from events and adjust the approach as it unfolds
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A business's strategy was designed three years ago and has not been reviewed since, while competitors have changed their offers. What is the most likely outcome?
- Strategic drift, leading to a gradual loss of competitive position
- A sudden increase in market share as competitors are caught out by the stable strategy
- No change in performance, because the strategy was correct when it was first designed and remains so
- An automatic improvement in profits because the firm's strategy has been fixed and cannot be changed
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Evaluate the claim that most strategies fail because the strategy itself is wrong.
- Strategies fail only because their logic is flawed, so implementation has no bearing on their success in any case
- Strategies never fail, because a well-designed strategy will always succeed regardless of how it is delivered
- Failure often lies in implementation, such as poor communication, weak leadership or inadequate resources, not only in the logic
- Strategies fail because of luck alone, so managers have no influence on the outcome of any strategy they design
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Which of these statements about emergent strategy is most accurate?
- It is identical to strategic drift, because both mean the business is losing its way and its position
- It can capture useful learning from experience that a fixed plan would miss
- It arises only from government decisions, so businesses have no part in its development at all
- It is always inferior to planned strategy, so firms should never allow any emergent element into their approach
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A firm reviews its strategy and finds that its performance targets are unrealistic given resources. What is the most appropriate response?
- Reduce the monitoring of performance so that the unrealistic targets are less visible to managers and staff
- Keep the targets unchanged, because unrealistic targets motivate staff to work harder and achieve more in practice
- Revise the objectives or secure the resources needed, so the strategy is realistic and can be implemented
- Abandon the strategy immediately without considering whether the targets or the resources could be adjusted
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What is the main strength of a planned strategy?
- It guarantees that the business will never face competition, because the plan blocks new entrants to the market
- It gives clear direction and allows resources to be co-ordinated around agreed goals
- It removes the need for managers to communicate with staff, because the plan explains everything in detail
- It allows the business to ignore changes in its market, because the plan fixes every decision for years ahead
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Which is the best example of an emergent strategy?
- A firm follows a fixed budget that was approved by the board at the start of the year and never revised
- A firm finds that a product designed for one use is popular with another group of customers, and adjusts its offer to suit them
- A firm publishes a five-year plan that sets out its target market, product range and pricing before any launch takes place
- A firm copies the full strategy of its largest rival without any analysis of its own customers or resources
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Which measure is most suitable for evaluating a strategy's long-term performance?
- The cash balance at the end of the most recent month, which shows the position on a single day only
- The number of meetings held by managers during the last quarter to discuss the progress of the strategy
- Market share and customer retention tracked over several years and compared with rivals
- The number of pages in the strategic plan, which indicates how detailed the planning process has been
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A strategic plan sets a profit growth target of 10% but ignores changes in the market. What is the main weakness of this plan?
- It includes a profit target, which is never relevant to a strategic plan in any business context
- It sets a target that is too precise, so managers are unable to use it to make any decisions at all
- It sets a target that is too low, so the business will certainly exceed it and waste its resources in the process
- It does not reflect changes in the environment, so it may become less useful for decisions over time
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