Page 138 - BA1 Integrated Workbook STUDENT 2018

Subject E3: Strategic Management

1.3 YVV is in a fast-moving high technology industry. It has recently adopted a
freewheeling opportunism approach to strategy.

Which THREE of the following options are the most likely problems that
YVV will face due to its adoption freewheeling opportunism?

A Difficulty in raising equity finance

B Difficulty in undertaking comprehensive external analysis of YVV

C Lack of overall direction for YVV, leading to strategic drift

D Failure to identify future long-term industry risks

E Inability to accurately forecast future changes in the market

1.4 F is a listed company based in country J. The new CEO of the company has
significantly changed the composition of the board since his arrival. He has
appointed directors from a wide range of backgrounds and industries that he
has worked with in the past. The CEO has a friendly relationship with most of
these new directors.

The CEO has argued that given the diverse background of board members it is
not necessary for F to have any non-executive directors.

Which of the following options correctly identifies the most likely effect on
F’s strategic management of the CEO’s approach to corporate
governance?

A Reduced ability for the CEO to implement inappropriate strategies

B Increased scrutiny of all new strategic plans

C Increased range of new strategies being developed by the board

D More accurate information for decision making

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