MGMT Chap 6 Quiz EXAM2

17. An offensive strategy is a grand strategy that involves reduction in the organization's efforts. -True -False

-False A defensive strategy, or a retrenchment strategy, is a grand strategy that involves reduction in the organization's efforts.

11. A sustainable competitive advantage is the ability of an organization to perform the tasks it normally does well in the same way each time to perfect those activities. -True -False

-False A sustainable competitive advantage is the ability of an organization to produce goods or services more effectively than its competitors do, thereby outperforming them. It means performing different activities from rivals, or performing similar activities in different ways.

14. Several studies found that strategic planning does not benefit smaller companies, as they very seldom see improvements in financial performance from this type of planning. -True -False

-False Smaller companies (under 500 employees) account for about half of private-sector employment and two-thirds of net new jobs in recent years. One analysis of several studies found that strategic planning was appropriate not just for large firms—indeed, companies with fewer than 100 employees could benefit as well, although the improvement in financial performance was small. Nevertheless, the researchers concluded that "it may be that the small improvement in performance is not worth the effort involved in strategic planning unless a firm is in a very competitive industry where small differences in performance may affect the firm's survival potential."

15.Strategic planning is a type of planning used exclusively by the government to develop short-term strategies to compete globally. -True -False

-False Strategic planning is concerned with developing a comprehensive program for long-term success.

13. The organizational-management process consists of seven steps: (1) doing research, (2) establishing the mission and vision, (3) assessing the current reality, (4) formulating the grand strategy, (4) implementing the strategy, (6) maintaining strategic control, and (7) maintaining the feedback loop. -True -False

-False The strategic-management process has five steps, plus a feedback loop (see Figure 6.1): (1) establishing the mission and the vision, (2) assessing the current reality, (3) formulating the grand strategy, (4) implementing the strategy, and (5) maintaining strategic control and the feedback loop.

7. Dave and his partner are studying the strengths and weaknesses of their construction business, as well as researching the opportunities and threats in the external environment. This process by Dave and his partner is the development of a _____. -strength statement -SWOT analysis -synergy plan -contingency plan -forecast

-SWOT analysis SWOT analysis, also known as a situational analysis, is a search for the strengths, weaknesses, opportunities, and threats affecting the organization.

18. A stability strategy is a grand strategy that involves little or no significant organizational change. -True -False

-True A stability strategy is a grand strategy that involves little or no significant change.

16. Sue and Jane Smith are writing the vision for their new consignment shop. Because they want their employees and business to grow and reach goals, like all organization visions, it should be positive and inspiring, pushing their organization and the workers to achieve goals that they believe are not possible. -True -False

-True A vision should be positive and inspiring, and it should stretch the organization and its employees to achieve a desired future state that appears beyond its reach.

20. So the owners of a computer repair shop can better formulate strategies, they are doing a SWOT analysis to understand the strengths and weaknesses within their company and the opportunities and threats of the external environment. These are some of the benefits of doing a SWOT analysis. -True -False

-True SWOT analysis should provide a realistic understanding of the organization in relation to its internal and external environments so that you can better formulate strategy in pursuit of the firm's mission.

12. Johnson's Fruit Farm is one of several stores in the county where customers can purchase locally grown fruits and vegetables. However, Mrs. Johnson also offers weekly workshops in her store on topics such as canning, healthy eating, and how to grow a garden, which no other store in the county does. By offering these unique workshops, the Johnsons are engaging in strategic positioning. -True -False

-True Strategic positioning means performing different activities from rivals, or performing similar activities in different ways

19. Strategy implementation is putting strategic plans into effect, which means dealing with roadblocks within the organization's structure and culture and seeing if the right people and control systems are available to execute the plans. -True -False

-True Strategy implementation is putting strategic plans into effect. This means dealing with roadblocks within the organization's structure and culture and seeing if the right people and control systems are available to execute the plans.

6. Gathering information about your competitors' activities so that you can anticipate their moves and react appropriately is known as ____. -environmental -exploration -benchmarking -scouting -competitive -intelligence -MBO

-competitive intelligence Practicing competitive intelligence means gaining information about one's competitors' activities so that you can anticipate their moves and react appropriately.

2. Strategic position emerges from three sources: ____. -low-profit margin, many customers; no needs, many customers; broad needs, few customers -few needs, many customers; broad needs, few customers; broad needs, many customers -no needs, many customers; broad needs, few customers; broad needs, many customers -high profits, many customers; low profits, few customers; broad needs, many customers -high-profit margin, few customers; few needs, many customers; broad needs, few customers

-few needs, many customers; broad needs, few customers; broad needs, many customers Strategic position emerges from three sources: (1) few needs, many customers, (2) broad needs, few customers, (3) broad needs, many customers.

9. A projection for the future is a _____. -past correction -trend -benchmark -forecast -final analysis

-forecast A forecast is a vision or projection of the future.

4. Fred, who is starting a painting business, was advised by a friend, a successful business owner, to write down the purpose of his painting business and why he believes his company will exist. Fred was writing his ____. -mission statement -code of ethics -vision statement -proprietorship pact -ownership belief -statement

-mission statement The mission statement is the organization's purpose or reason for being.

10. In the BCG matrix, stars are _____. -beyond reach, due to their high purchase price and profits -highly overvalued, so are not wise purchases -companies with slow growth and high market share -risky new ventures -organizations with high growth and high market share which are definite keepers

-organizations with high growth and high market share which are definite keepers In the BCG matrix, stars have high growth and high market share, and they are definite keepers.

1. Jeff, the owner of a toy store, is interested in developing a sustainable competitive advantage. To do this he needs to be responsive to customers and to stay ahead in ____. -innovating, quality, effectiveness, and company diversity -profitability, usage of MBO, and innovation -company diversity and synergy and strong employee morale company diversity and synergy -responsiveness, innovating, quality, and effectiveness

-responsiveness, innovating, quality, and effectiveness Sustainable competitive advantage occurs when an organization is able to get and stay ahead in four areas: (1) in being responsive to customers, (2) in innovating, (3) in quality, and (4) in effectiveness.

5. Developing a comprehensive program for long-term success is the focus of ____. -mission and vision statements -tactical plans -a focused sigma plan -a synergy plan -strategic planning

-strategic planning Strategic planning is concerned with developing a comprehensive program for long-term success.

8. Many customers have visited Sally's Diner for decades because of their friendly service. Most customers feel that Sally's is the friendliest placed around. The friendly service at Sally's is an example of a company _____. -vision -strength -weakness -opportunity -threat

-strength Strengths are inside matters. Strengths could be work processes, organization, culture, staff, product quality, production capacity, image, financial resources and requirements, service levels, and other internal matters.

3. An organization's vision is its long-term goal describing _____. -the organization's purpose or reason for being -its competition and external environment what the company wants to become, its long-term direction and strategic intent -the organization's purpose or reason for being and its strategic intent -the ethical and diversity standards of the organization

-what the company wants to become, its long-term direction and strategic intent An organization's vision is its long-term goal describing what it wants to become, and it is expressed in a vision statement, which describes its long-term direction and strategic intent.

The company's CEO puts pressure on the firm's R&D managers to develop products that can be created cheaply. The firm would be following a ________ strategy: -Cost leadership -Differentiation -Cost focus -Retrenchment

The correct answer is "A" - cost leadership Page: 174 LO: 4 Difficulty: Easy AACSB: 6 BT: Knowledge

John owns a piano sales and tuning store. He wants to be the biggest retailer in the Midlands. Adding salespeople would be part of his strategic __________. -Locution -Execution -Efficacy -Efficiency

The correct answer is "B" - execution. See previous slide.

When analyzing the "W" in SWOT analysis, Roberta, the manager might be assessing: -Possible challenges in the market -Competitors' actions -High turnover of employees -Good financial resources of the firm

The correct answer is "C" - high turnover Page: 169