strategic management 4180 Exam 1 questions

Which of the following statements is true of the social responsibilities of a business? A) A firm's ethical responsibilities go beyond its legal responsibilities. B) Shareholders mandatorily require a firm to perform its ethical and philanthropic responsibilities. C) Ethical responsibilities are the foundational building block of a firm's social responsibility. D) Legal responsibilities are often subsumed under the idea of corporate citizenship, reflecting the notion of voluntarily giving back to society.

A) A firm's ethical responsibilities go beyond its legal responsibilities.

Ethics is A) not synonymous with law. B) impossible to codify into law. C) universal and cannot differ between cultures. D) the minimum acceptable standard in business practice.

A) not synonymous with law

Which of the following stages of the strategic management process involves an evaluation of a firm's external and internal environments?A) strategy analysis B) strategy implementation C) strategy formulation D) strategy control

A) strategy analysis

One way to foster ethical behavior in employees is to A) avoid codifying organizational culture. B) create a control system that encourages desired values. C) view clients as counter parties to transactions. D) align the vision statement of the organization with its informal culture.

B) create a control system that encourages desired values.

Quick Market Inc. is a food supply company that wants to sell its products directly to consumers through mail order instead of going through supermarkets and other stores. However, supermarket chains want to make this transaction either illegal or more difficult for Quick Market. To accomplish this, they are using ________ to influence the political process. A) ecological factors B) lobbying forces C) interest rates D) demographic research

B) lobbying forces

Which of the following is typically an economic responsibility of a firm? A) sourcing raw materials from highly developed countries B) paying adequate returns to the firm's stockholders on the capital invested by them C) donating resources, in terms of money and time, toward community development D) helping a nation increase its import of goods and services

B) paying adequate returns to the firms stockholders on the capital invested by them

The primary objective of Porter's five forces model is to A) understand valuable, rare, and hard-to-imitate resources. B) understand the profit potential of industries. C) reduce the gap between the value of a firm's product and its cost of production. D) break down a firm's value chain activities into primary and support.

B) understand the profit potential of industries

Which of the following is a primary feature of the five forces model? A) It is concerned exclusively about the intensity of rivalry among direct competitors. B) It takes into account a firm's internal resources, capabilities, and core competencies. C) It helps managers determine the changing speed of an industry or the rate of innovation. D) It views competition within an industry broadly to include forces such as buyers, suppliers, and the threat of substitutes.

D) It views competition within an industry broadly to include forces such as buyers, suppliers, and the threat of substitutes.

When fashion magazines face competition from fashion blogs on the web, which of the following forces in Michael Porter's five forces model primarily gets stronger? A) the emergence of entry barriers B) the bargaining power of suppliers C) the availability of complements D) the threat of substitutes

D) the threat of substitutes

A firm is required by society and its shareholders to meet its ethical and philanthropic responsibilities. T/F

False

Federal and regional laws prevent incumbent firms from dramatically lowering prices or otherwise retaliating when a new entrant joins an industry. T/F

False

A mission describes how a firm will accomplish the broad goals set out in a vision statement. T/F

True

A small coffee shop faces significant potential competition because of the low capital requirements compared with business environments such as universities and laboratories. T/F

True

A vision describes in broad, inspirational terms what an organization hopes to accomplish in the future. T/F

True

Core values provide ethical guidelines for how individual employees will behave. T/F

True

Which of the following summarizes the difference between a firm's vision and mission? A) A vision states what a firm wants to accomplish; a mission states how a firm plans to accomplish this vision. B) A vision states the ethical values of a firm; a mission states the monetary goals of a firm. C) A vision states how much a firm wants to earn; a mission states how these earnings will be accomplished. D) A vision states the management values of a firm; a mission states the values of the other workers.

a) a vision states what a firm wants to accomplish; a mission states how a firm plans to accomplish this vision

To be effective, firms need to A) back up their visions with strategic commitments that are costly and difficult to reverse. B) increase their strategic flexibility by developing product-oriented vision statements. C) isolate top managers from the organizational values. D) pursue visions that are exclusively financial and not aspirational.

a) back up their visions with strategic commitments that are costly and difficult to reverse

Rapida Inc. and Click Inc. are two companies that have been manufacturing typewriters for almost 30 years. Due to the reduced demand for typewriters today, both companies' average return on invested capital is approximately -5 percent. The current industry average is 2 percent. In this scenario, Rapida Inc. and Click Inc. most likely have A) competitive advantage over other firms in their industry. B) competitive parity with each other. C) strategic alliance with each other. D) economies of scope instead of economies of scale.

b) competitive party with each other

Strategic commitments are actions that are A) inexpensive, long-term oriented, and difficult to reverse. B) inexpensive, short-term oriented, and easy to reverse. C) costly, long-term oriented, and difficult to reverse. D) costly, short-term oriented, and easy to reverse.

c) costly, long-term oriented, and difficult to reverse

Patriot Tools, a company that manufactures industrial tools, incurs higher costs because of its refusal to outsource its manufacturing to countries where labor costs are lower. This reflects Patriot Tools' ________ responsibility. A) economic B) legal C) ethical D) demographic

c) ethical

economies of scale are cost advantages that accrue for firms with A) high fixed costs. B) low employee turnover. C) larger output. D) high capital risks.

c) larger output

In ________, a firm frames a guiding policy to address the competitive challenge. A) strategy control B) strategy implementation C) strategy formulation D) strategy analysis

c) strategy formulation