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Free ACCA Strategic Business Leader Practice Questions & Answers
300 exam-style Strategic Business Leader questions. Pick your answer, hit Check answer, and see the worked solution — free to start, no signup.
100% free · No login to startQuestion 61
What is the Carroll pyramid of CSR?
Select an option first.
Correct answer: B — A framework showing CSR responsibilities in four layers — economic, legal, ethical, and philanthropic — from foundational to aspirational
Explanation: B is correct. Carroll's pyramid has four levels: Economic (be profitable), Legal (obey the law), Ethical (do what is right beyond the law), and Philanthropic (contribute to society). Organisations must meet lower-level responsibilities before claiming higher ones.
Question 62
What is the 'triple bottom line' (TBL) concept?
Select an option first.
Correct answer: B — A framework measuring organisational performance across three dimensions: financial profit, social equity, and environmental sustainability (people, planet, profit)
Explanation: B is correct. TBL (Elkington) holds that organisations should measure success across all three dimensions — profit (economic value), people (social value), and planet (environmental value). Focusing only on financial profit ignores material impacts on society and the environment.
Question 63
What is 'greenwashing'?
Select an option first.
Correct answer: B — Making misleading or unsubstantiated environmental claims to appear more sustainable than an organisation actually is
Explanation: B is correct. Greenwashing occurs when organisations make misleading environmental claims to gain reputational benefits without substantive action. It erodes trust and misleads stakeholders. A, C and D describe genuine or regulatory activities.
Question 64
What is stakeholder theory (Freeman)?
Select an option first.
Correct answer: B — The theory that organisations have responsibilities to all groups affected by their activities — not just shareholders — and that managing these relationships creates long-term value
Explanation: B is correct. Freeman's stakeholder theory argues that sustainable value creation requires managing relationships with all stakeholders — employees, customers, suppliers, communities, and shareholders — rather than treating shareholder value as the sole objective.
Question 65
What is a 'social contract' between an organisation and society?
Select an option first.
Correct answer: B — The implicit expectation that organisations will operate in ways that are acceptable to society in exchange for their licence to operate
Explanation: B is correct. The social contract represents society's expectations of business behaviour. If an organisation violates these expectations (e.g., through pollution or exploitation), it may lose its social licence to operate — through regulation, boycotts, or reputational damage.
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Question 66
What is 'shareholder primacy'?
Select an option first.
Correct answer: B — The view that the primary obligation of a company's management is to maximise returns to shareholders above all other stakeholder interests
Explanation: B is correct. Shareholder primacy (associated with Milton Friedman) holds that management's duty is to maximise shareholder value. Stakeholder theory challenges this by arguing that serving a broader set of stakeholders creates more sustainable value. A, C and D describe other governance concepts.
Question 67
What is 'enlightened shareholder value'?
Select an option first.
Correct answer: B — The principle that long-term shareholder value is best created by taking into account the interests of other stakeholders — employees, customers, environment — rather than short-term profit maximisation
Explanation: B is correct. Enlightened shareholder value (reflected in UK company law Section 172) recognises that durable shareholder returns depend on managing wider stakeholder relationships. It balances shareholder primacy with stakeholder considerations.
Question 68
What is the purpose of a nomination committee?
Select an option first.
Correct answer: B — To ensure a formal, transparent process for the appointment of directors, reviewing board composition and succession planning
Explanation: B is correct. The nomination committee leads board appointments to ensure independence, diversity, and appropriate skills. It conducts succession planning for key leadership roles. A, C and D are unrelated.
Question 69
What is 'board diversity' and why does it matter?
Select an option first.
Correct answer: B — Having a range of perspectives, backgrounds, skills, and characteristics among board members, which improves decision quality and reduces groupthink
Explanation: B is correct. Board diversity — across gender, ethnicity, age, skills, and experience — leads to richer deliberation, broader perspectives, and better governance outcomes. Homogeneous boards are more susceptible to groupthink and blind spots. A, C and D describe different types of diversity.
Question 70
What is 'executive remuneration alignment' in governance?
Select an option first.
Correct answer: B — Designing pay packages so that executive incentives align with long-term value creation for shareholders rather than short-term performance
Explanation: B is correct. Well-designed remuneration should align executive behaviour with long-term shareholder interests. Poor alignment (e.g., short-term bonuses linked to share price) can incentivise excessive risk-taking or manipulation. A, C and D do not address the alignment objective.
Question 71
What is the OECD Principles of Corporate Governance concerned with?
Select an option first.
Correct answer: B — Providing an international benchmark for corporate governance frameworks covering rights of shareholders, equitable treatment, stakeholder roles, disclosure, and board responsibilities
Explanation: B is correct. The OECD Principles provide a global reference point for good governance, covering six areas: ensuring an effective governance framework, shareholder rights, equitable treatment, stakeholder roles, disclosure and transparency, and board responsibilities.
Question 72
What are the main entry strategies available to a firm entering a foreign market?
Select an option first.
Correct answer: B — Exporting, licensing, franchising, strategic alliances, joint ventures, and foreign direct investment
Explanation: B is correct. International market entry options range from low-commitment (exporting, licensing) to high-commitment (FDI). Choice depends on control needed, risk appetite, resource availability, and host country conditions. A describes competitive strategies. C and D describe general growth options.
Question 73
What is a joint venture?
Select an option first.
Correct answer: B — A separate legal entity created by two or more organisations that pool resources and share control, risk, and returns for a specific purpose
Explanation: B is correct. A joint venture creates a new entity with shared ownership, risk, and governance. It differs from a strategic alliance (C — no new entity), acquisition (A), or minority investment (D). JVs are common for market entry where local knowledge or regulatory requirements favour partnership.
Question 74
What is the purpose of Porter's Five Forces framework?
Select an option first.
Correct answer: B — To analyse the structural attractiveness of an industry by examining five competitive forces that determine profitability potential
Explanation: B is correct. Porter's Five Forces (threat of new entrants, bargaining power of suppliers, bargaining power of buyers, threat of substitutes, and competitive rivalry) collectively determine an industry's profit potential. A, C and D are different analytical frameworks.
Question 75
What does 'threat of new entrants' refer to in Porter's Five Forces?
Select an option first.
Correct answer: B — The ease with which new competitors can enter an industry, limited by barriers such as capital requirements, economies of scale, brand loyalty, and regulatory restrictions
Explanation: B is correct. High barriers to entry (capital, scale, switching costs, regulation, IP) protect existing players' profitability. Low barriers mean new entrants can easily erode margins. A, C and D describe other competitive threats.
Question 76
What is backward vertical integration?
Select an option first.
Correct answer: B — Acquiring or developing operations that supply inputs to the organisation's current operations — moving upstream in the value chain
Explanation: B is correct. Backward (upstream) integration involves taking control of supply — e.g., a manufacturer acquiring a raw material supplier. Forward (downstream) integration (A) involves acquiring distribution channels. C is horizontal integration. D is unrelated diversification.
Question 77
What is 'first mover advantage'?
Select an option first.
Correct answer: B — The competitive advantage gained by being the first to enter a market or launch a product, creating brand recognition, customer loyalty, and scale advantages ahead of competitors
Explanation: B is correct. First movers can establish brand loyalty, lock in customers or suppliers, and gain learning curve benefits before competitors arrive. However, first mover disadvantage exists too — pioneers may educate the market for followers to exploit. D describes a fast-follower or late-mover strategy.
Question 78
What is 'dynamic capability'?
Select an option first.
Correct answer: B — An organisation's ability to integrate, build, and reconfigure internal and external resources and competences to respond to rapidly changing environments
Explanation: B is correct. Teece's dynamic capabilities extend the RBV — in fast-changing environments, firms need not only valuable resources but the ability to sense opportunities, seize them, and transform their resource base. A, C and D are narrower or unrelated.
Question 79
What is the 'industry lifecycle' concept?
Select an option first.
Correct answer: B — The pattern through which an industry evolves — from introduction, through growth and maturity, to decline — each stage having different competitive dynamics and strategic implications
Explanation: B is correct. Each lifecycle stage has different characteristics: high investment and low returns in introduction; rapid growth and emerging competition in growth; slowing growth and intense competition in maturity; falling demand in decline. Strategy must adapt accordingly.
Question 80
What is 'coopetition'?
Select an option first.
Correct answer: B — A situation where organisations simultaneously compete in some markets while cooperating in others to create shared value
Explanation: B is correct. Coopetition (Brandenburger and Nalebuff) recognises that competitors can sometimes benefit by cooperating — e.g., on industry standards, joint R&D, or market expansion — while competing on end-product quality or price. A, C and D mischaracterise the concept.
Question 81
What is the distinction between 'emergent' and 'deliberate' strategy?
Select an option first.
Correct answer: B — Deliberate strategy is planned in advance and executed as intended; emergent strategy develops from patterns of decisions made without prior intention, often in response to environmental changes
Explanation: B is correct. Mintzberg observed that realised strategy is often a blend of deliberate (intended) and emergent (unintended) elements. Emergent strategies can be valuable adaptations to reality. A reverses the direction. C and D are unjustified generalisations.
Question 82
What is 'strategic control'?
Select an option first.
Correct answer: B — The process of monitoring whether the organisation's strategy is on track, evaluating performance against strategic objectives, and taking corrective action when necessary
Explanation: B is correct. Strategic control closes the strategy cycle — it measures progress against strategic goals, assesses whether the strategy remains appropriate, and triggers revision when needed. It differs from operational control (A), legal structures (C), or board authority (D).
Question 83
What is 'strategic leadership'?
Select an option first.
Correct answer: B — The ability to anticipate, envision, and maintain flexibility while empowering others to create strategic change that is necessary for organisational survival and success
Explanation: B is correct. Strategic leadership involves setting direction, creating vision, building culture, and managing resources to enable the organisation to achieve long-term competitive advantage. It goes beyond operational management and tactical execution.
Question 84
What is 'organisational resilience'?
Select an option first.
Correct answer: B — The capacity of an organisation to anticipate, prepare for, respond to, and adapt to incremental change and sudden disruptions in order to survive and prosper
Explanation: B is correct. Organisational resilience encompasses strategic agility, operational flexibility, cultural adaptability, and stakeholder trust. It goes beyond risk management or IT recovery (D) to encompass the whole organisation's ability to adapt and thrive under adversity.
Question 85
What is 'strategic renewal'?
Select an option first.
Correct answer: B — The process by which an organisation revitalises its strategy to restore competitive advantage — often involving significant changes to its business model, capabilities, or markets
Explanation: B is correct. Strategic renewal addresses strategic drift or competitive decline by fundamentally refreshing the organisation's direction, capabilities, and positioning. It is more profound than minor strategy adjustments. A, C and D are unrelated.
Question 86
What is 'institutional theory' in an organisational context?
Select an option first.
Correct answer: B — The perspective that organisations conform to social norms, expectations, and regulatory pressures in their environment — often mimicking successful peers — which explains why organisations in the same industry tend to resemble each other
Explanation: B is correct. Institutional theory explains isomorphism — why organisations in the same field become similar over time, through coercive pressures (regulation), mimetic pressures (copying successful peers), and normative pressures (professional standards). A, C and D are unrelated.
Question 87
What is 'strategic intent' (Hamel and Prahalad)?
Select an option first.
Correct answer: B — An ambitious, long-term aspiration that stretches the organisation beyond its current capabilities, creating focus and motivating effort to close the gap between aspiration and current resources
Explanation: B is correct. Strategic intent (e.g., Honda's intent to 'destroy Yamaha' or Canon's to 'beat Xerox') creates a sense of direction and urgency that mobilises resources creatively. It differs from mission (current purpose) and vision (future state) by explicitly acknowledging a gap and committing to close it.
Question 88
What is 'corporate parenting' in strategy?
Select an option first.
Correct answer: B — The role of the corporate centre in adding value to its business units — through financial, knowledge, or capability transfer — beyond what those units could achieve independently
Explanation: B is correct. Corporate parenting value can be created through strategic guidance, shared resources, financial management, talent development, and facilitating synergies between business units. Where the parent destroys rather than creates value, divestment or break-up is rational. A, C and D are unrelated.
Question 89
What is a 'turnaround strategy'?
Select an option first.
Correct answer: B — A set of actions taken to reverse a period of deteriorating performance — typically involving cost reduction, asset disposal, leadership change, and refocusing on core activities
Explanation: B is correct. Turnaround strategies address declining organisations — they focus on stabilising cash flow, cutting costs, restructuring, and rebuilding competitive advantage. A, C and D are unrelated or too narrow.
Question 90
What is 'the innovator's dilemma'?
Select an option first.
Correct answer: B — The paradox that successful established companies often fail to adopt disruptive innovations because serving their existing customers and business model rationally leads them to ignore the innovations that will eventually displace them
Explanation: B is correct. Christensen's innovator's dilemma shows that well-managed companies doing the right thing for current customers can be disrupted by inferior products serving non-customers. The rational management decisions that ensure short-term success become fatal in the face of disruptive change.
More free ACCA topics
Management Accounting401
Financial Accounting400
Corporate and Business Law400
Performance Management400
Financial Reporting400
Financial Management400
Strategic Business Reporting400
Advanced Financial Management400
Advanced Performance Management400
Advanced Taxation400
Business and Technology300
Taxation300
Audit and Assurance300
Advanced Audit and Assurance296
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