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CS Professional · Strategic Management and Corporate Finance · Introduction to Strategic Management

Ananya Pharma operates in an industry with rapid technology change, short product life cycles and unpredictable regulation. Its board insists on a rigid five-year plan reviewed only at the end of the period. What is the main weakness of this approach?

The main weakness is the lack of flexibility and continuous environmental scanning. In turbulent, fast-changing industries, strategy must be reviewed and adapted frequently. A rigid five-year plan reviewed only at the end cannot respond to technological shifts, short product life cycles or sudden regulatory change.

  1. AIt lacks flexibility and continuous environmental scanning needed to respond to turbulent conditionsCorrect
  2. BIt spends too little on annual accounting audits
  3. CIt over-emphasises stakeholder consultation
  4. DIt makes the mission statement unnecessary

Explanation

In dynamic environments, strategy must be adaptive, with ongoing scanning and periodic review. A rigid plan reviewed only at term end cannot react to sudden shifts. Audit spending, stakeholder consultation and the mission statement are not the issue.

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