Strategic Management-Chapter 2 (CAP)
When developing a mission statement, it is usually advisable to involve as few managers as possible.
False
All stakeholders' claims on an organization ________ pursued with equal emphasis. A) cannot be B) should always be C) are required to be D) must ideally be E) can usually be
A) cannot be
Good mission statements identify the ________ of a firm's products to its customers. A) utility B) price C) profit margin D) demand E) popularity
A) utility
Which type of statement should be created first and foremost? A) Creed B) Vision C) Objectives D) Mission E) Competitive advantage
B) Vision
Effective mission statements can vary in A) length. B) content. C) format. D) specificity. E) All of the above
E) All of the above
According to George Steiner, vagueness has no place in a good mission statement.
False
It is unusual for the claims and concerns of a company's stakeholders to vary or conflict.
False
One benefit of having a clear mission and vision is that it projects a sense of worth and intent to all stakeholders.
True
An effective mission statement should do all of the following EXCEPT A) include monetary amounts, numbers, percentages and ratios. B) be inspiring. C) reveal that the firm is environmentally responsible. D) identify the utility of a firm's products. E) be reconciliatory.
A) include monetary amounts, numbers, percentages and ratios.
The purpose of a mission statement is to declare all of these EXCEPT A) a reason for being. B) an annual financial plan. C) a statement of purpose. D) a statement of beliefs. E) whom it wants to serve.
B) an annual financial plan.
In the process of developing a mission statement, it is important to involve A) as few managers as possible. B) as many managers as possible. C) upper-level management only. D) lower-level management only. E) the board of directors only.
B) as many managers as possible.
According to Peter Drucker, developing a clear business vision and mission is the first responsibility of strategists.
True
A mission statement is a declaration of an organization's financial status.
False
What is the first step in the comprehensive strategic-management model? A) Developing vision and mission statements B) Performing external audits C) Performing internal audits D) Measuring and evaluating performance E) Establishing long-term objectives
A) Developing vision and mission statements
All of the following are mentioned as places where vision and mission statements can often be found EXCEPT A) SEC reports. B) annual reports. C) customer service agreements. D) supplier agreements. E) business plans.
A) SEC reports.
Which of the following is NOT one of the nine recommended components of a mission statement? A) Strategies B) Self-concept C) Concern for employees D) Markets E) Customers
A) Strategies
A good mission statement has A) an employee orientation. B) a customer orientation. C) a shareholder orientation. D) an environmental orientation. E) a profit orientation.
B) a customer orientation.
Which basic question should the vision statement answer? A) What is our business? B) How can we improve ourselves? C) What do we want to become? D) Who are our stakeholders? E) How can we increase profitability?
C) What do we want to become?
Which group would be classified as stakeholders? A) Governments B) Creditors C) Suppliers D) Employees E) All of the above
E) All of the above
Which question(s) are answered in an effective mission statement? A) Is the firm committed to growth and financial soundness? B) Are employees a valuable asset of the firm? C) Geographically, where does the firm compete? D) Who are the firm's customers? E) All of the above
E) All of the above
A firm's concern for employees in a mission statement addresses the question, "Is the firm responsive to social, community, and environmental concerns?"
False
A firm's philosophy in a mission statement addresses the question, "What is the firm's distinctive competence?"
False
A mission statement is usually just a simple statement of specific details.
False
According to Drucker, the most important time for a company to develop mission and vision statements is when the company is experiencing financial difficulty.
False
According to Peter Drucker, asking the question "What is our business?" is synonymous with asking the question "What is our vision?"
False
An important question a mission statement should answer is, "What do we want to become?"
False
In most cases, at least 500 words are required to effectively state a mission statement.
False
Mission statements cannot be stated with too high a level of specificity.
False
Research has failed to find a positive relationship between mission statements and organizational performance.
False
Small, nonprofit organizations never develop mission statements.
False
Stakeholders of an organization include stockholders, customers and creditors, but not competitors.
False
The mission statement should be short-preferably one sentence.
False
A mission statement can sometimes be called a statement of philosophy.
True
According to Vern McGinnis, an effective mission statement should define what the organization is and what the organization aspires to be.
True
An effective mission statement generates the impression a firm is successful, has direction, and is worthy of time, support and investment.
True
Mission statements are sometimes difficult to derive because top management may disagree over company objectives.
True
One of the benefits of having a clear mission and vision is promoting a sense of shared expectations among all managers and employees.
True
Stakeholders both affect and are affected by an organization's strategic decisions.
True
The foundation for development of a comprehensive mission statement is provided by a clear vision.
True
The relative attention an organization will devote to meeting the claims of various stakeholders is indicated in a good mission statement.
True
Union Pacific's mission statement focuses on transportation rather than on railroads because good mission statements identify the utility of a firm's products to its customers.
True
Vision and mission statements can often be found in the front of annual reports.
True
When developing a vision statement, input should be received from as many managers as possible.
True
According to Campbell and Yeung, what is/are most likely associated with behavior and the present? A) Mission B) Values C) Long-term objectives D) Vision E) Possibilities
A) Mission
According to Drucker, which question is synonymous with asking "What is our mission?" A) What is our business? B) How can we improve ourselves? C) What do we want to become? D) Who are our stakeholders? E) How can we increase profitability?
A) What is our business?
An overly general mission statement that ________ could be dysfunctional. A) does not exclude any strategy alternatives B) encourages management creativity C) excludes all diversification D) endorses the consideration of feasible potential strategies E) allows for the generation and consideration of a range of alternative objectives
A) does not exclude any strategy alternatives
All stakeholders A) have claims and concerns about an organization, but these claims and concerns vary. B) have the same claims and concerns about an organization. C) have ownership rights in an organization. D) have the same voting rights in an organization. E) have environmental concerns as their top priority.
A) have claims and concerns about an organization, but these claims and concerns vary.
According to McGinnis, a mission statement should be all of the following EXCEPT A) it should be broad enough to include all ventures. B) it should be stated in clear terms. C) it should distinguish an organization from all others. D) it should define what an organization is. E) it should serve as a framework for evaluating both current and prospective activities.
A) it should be broad enough to include all ventures.
The process of developing a vision and mission statement often includes which of these as the first activity? A) Requesting that managers modify the current document B) Asking managers to read selected articles about mission statements C) Asking managers to prepare a mission statement for the organization D) Having a brainstorming session on whether the organization should have a mission statement E) Merging several mission statements into one document
B) Asking managers to read selected articles about mission statements
The following excerpt from a mission statement illustrates which of the nine essential components of a mission statement? "We believe our first responsibility is to the doctors, nurses, patients, mothers, and all others who use our products and services." A) Markets B) Customers C) Concern for Employees D) Concern for Public Image E) Technology
B) Customers
Which of these examples of a mission statement's focus area does NOT identify the utility of the firm's products to its customers? A) AT&T focuses on communication rather than telephones. B) ExxonMobil focuses on oil and gas rather than energy. C) Union Pacific focuses on transportation rather than railroads. D) Universal Studios focuses on entertainment rather than movies. E) A clothing retailer focuses on attractive looks rather than on clothes.
B) ExxonMobil focuses on oil and gas rather than energy.
Which component of a mission statement addresses the basic beliefs, values, aspirations, and ethical priorities of the firm? A) Technology B) Philosophy C) Concern for public image D) Customers E) Self-concept
B) Philosophy
Which of the following illustrates the self-concept component of a mission statement? A) To earn our customer's loyalty, we listen to them, anticipate their needs, and act to create value in their eyes. B) We are committed to leapfrogging ongoing competition within 1,000 days by unleashing the constructive and creative abilities and energies of each of our employees. C) Our emphasis is on North American markets, although global opportunities will be explored. D) To compensate its employees with remuneration and fringe benefits competitive with other employment opportunities in its geographical area and commensurate with their contributions toward efficient corporate operations. E) In this respect, the company will conduct its operations prudently and will provide the profits and growth which will assure our ultimate success.
B) We are committed to leapfrogging ongoing competition within 1,000 days by unleashing the constructive and creative abilities and energies of each of our employees.
What is the best time to develop a mission statement? A) When a firm is in decline B) When the firm is successful C) When the firm is in financial trouble D) When the firm is in legal trouble E) When the firm encounters competition
B) When the firm is successful
Businessweek reports that firms using mission statements have a ________ percent higher return on certain financial measures than those without such statements. A) 10 B) 15 C) 30 D) 45 E) 50
C) 30
All of the following utility statements are relevant in developing a mission statement EXCEPT A) Do not offer me shoes. Offer me comfort for my feet and the pleasure of walking. B) Do not offer me furniture. Offer me comfort and the quietness of a cozy place. C) Do not offer me ideas, emotions, ambience, feelings, and benefits. Offer me things. D) Do not offer me books. Offer me hours of pleasure and the benefit of knowledge. E) Do not offer me a house. Offer me security, comfort, and a place that is clean and happy.
C) Do not offer me ideas, emotions, ambience, feelings, and benefits. Offer me things.
Who is referred to as "the father of modern management"? A) Cleland B) Campbell C) Drucker D) McGinnis E) Yeung
C) Drucker
What question is asked in conjunction with the philosophy component of a mission statement? A) What are the firm's major products or services? B) Is the firm committed to growth and financial soundness? C) What are the basic beliefs, values, aspirations, and ethical priorities of the firm? D) Is the firm responsive to social, community, and environmental concerns? E) Are employees a valuable asset of the firm?
C) What are the basic beliefs, values, aspirations, and ethical priorities of the firm?
In developing a mission statement, arousing emotion A) is not a benefit. B) is futile. C) is important. D) should be avoided if possible. E) is counterproductive.
C) is important.
The recommended length of an effective mission statement is ________ words. A) approximately 25 B) no more than 100 C) less than 250 D) at least 300 E) more than 500
C) less than 250
The ideal length of a vision statement is A) one page. B) several paragraphs. C) one sentence. D) several sentences. E) as long as is necessary to convey the message.
C) one sentence.
A study by Rarick and Vitton found that firms with a formalized mission statement have ________ the average return on shareholders' equity than those firms without a formalized mission statement. A) one-quarter B) half C) twice D) three times E) five times
C) twice
According to the comprehensive strategic-management model, which step needs to be completed immediately following the establishment of long-term objectives? A) Developing vision and mission statements B) Performing external audits C) Performing internal audits D) Generating, evaluating, and selecting strategies E) Measuring and evaluating performance
D) Generating, evaluating, and selecting strategies
Which best expresses former Colgate CEO Reuben Mark's thoughts on vision? A) It's becoming less important that a clear mission make sense internationally. B) It's essential to drive home different messages in different cultures. C) Keeping the vision simple will never rally everyone to the corporate banner. D) Pushing one vision globally is essential. E) Elevated missions or visions will alienate international markets.
D) Pushing one vision globally is essential.
Which statement is TRUE? A) Companies must choose between having a mission statement or a vision statement. B) A company can't have a mission statement unless it has a vision statement. C) A vision statement cannot be established until a company has developed its mission statement. D) The vision statement should be established before the mission statement. E) Companies are required by law to have both mission and vision statements.
D) The vision statement should be established before the mission statement.
Which of these basic questions should a vision statement answer? A) What is our business? B) Who are our employees? C) What are our challenges? D) What do we want to become? E) Who are our competitors?
D) What do we want to become?
The potential for creative growth in an organization can be limited by A) an overemphasis on stakeholders. B) not enough emphasis on stakeholders. C) a mission statement that is too general. D) a mission statement that is too specific. E) a mission statement that is too dynamic.
D) a mission statement that is too specific.
A business' mission is the foundation for all of the following EXCEPT A) priorities. B) strategies. C) plans. D) employee wage rates. E) work assignments.
D) employee wage rates.
An effective mission statement does all of the following EXCEPT A) it reflects judgments about future growth directions that are based upon forward-looking external and internal analyses. B) it provides useful criteria for selecting among alternative strategies. C) it provides a basis for generating and screening strategic options. D) it is static in orientation. E) it should be enduring.
D) it is static in orientation.
As indicated in the strategic-management model, a clear ________ is needed before long-term objectives can be established. A) short-term objective B) implementation plan C) audit policy D) mission statement E) evaluation strategy
D) mission statement
In order to appeal to its diverse stakeholders, an effective mission statement should be A) inflammatory. B) provocative. C) contentious. D) reconciliatory. E) dysfunctional.
D) reconciliatory.
When developing a mission statement, what is needed before people can focus on specific strategy formulation activities? A) Negotiation B) Compromise C) Eventual agreement D) A and B only E) All of the above
E) All of the above
What can be used to promote unbiased views and to manage the development of the mission statement more effectively? A) An internal group B) A committee of managers C) Command-and-control D) Surveys E) An outside facilitator
E) An outside facilitator
Which component of a mission statement addresses the firm's distinctive competence or major competitive advantage? A) Technology B) Philosophy C) Concern for public image D) Customers E) Self-concept
E) Self-concept
After a draft mission statement has been developed, it is important to A) ask managers to read several articles about mission statements as background information. B) vote on the mission statement. C) ask managers to prepare a mission statement for the organization. D) ask managers to seek support for the mission statement from their subordinates. E) request modifications, additions, and deletions to the mission statement.
E) request modifications, additions, and deletions to the mission statement.
The general public is especially interested in ________, whereas stockholders are more interested in ________. A) environmental concerns; social responsibility B) social responsibility; the treatment of employees C) the treatment of employees; environmental concerns D) profitability; social responsibility E) social responsibility; profitability
E) social responsibility; profitability
Effective and carefully planned mission statements A) require major changes every few months. B) require major changes every few quarters. C) require major revision every few years. D) become ineffective in the first year. E) stand the test of time.
E) stand the test of time.
A mission statement that is limited enough to exclude some ventures is a poor mission statement.
False
AT&T's mission statement focuses on telephones rather than on communication.
False
According to Campbell and Yeung, an organization's vision is associated with behavior and with the present.
False
If an organization chooses to have both a mission and a vision, the mission statement should be established first.
False
The first step in the process of developing a mission statement is to ask all participants to prepare what they believe the organization's mission should be.
False
The operating philosophy of organizations should be to develop a product and then try to find a market for it.
False
The utility statement, "Do not offer me attractive looks; offer me clothes," is relevant in developing a mission statement.
False
Well-conceived and properly executed mission and vision statements do not need to be subject to revision.
False
When a company has been successful the question "What is our business?" becomes unnecessary.
False
Whereas the mission statement answers the question, "What do we want to become?" the vision statement answers the question, "What is our business?"
False
While vision and mission statements are part of numerous internal reports, they should never be displayed in a firm's premises.
False
A good mission statement serves as a framework for evaluating both current and prospective activities.
True
A mission statement is a declaration of an organization's reason for being.
True
A mission statement promotes a sense of shared expectations among all managers and employees.
True
A mission statement should be broad enough to reconcile differences among an organization's various stakeholders.
True
A mission statement should be broad in scope, since concrete specification could be the base for rallying opposition.
True
A mission statement, sometimes called a creed statement, can be defined as an enduring statement of purpose that distinguishes one organization from other similar enterprises.
True
A sense of self-concept is one of the nine components a good mission statement should include.
True
According to Campbell and Yeung, the process of developing a mission statement should create an "emotional bond" and "sense of mission" between the organization and its employees.
True
According to King and Cleland, carefully developed and written mission statements provide a basis for organizing work, departments, activities, and segments around a common purpose.
True
Attracting customers is a major reason for developing a mission statement.
True
Carefully prepared statements of vision and mission are widely recognized as the first step in strategic management.
True
Excess specificity can stifle creativity in the formulation of an acceptable mission or purpose.
True
Good mission statements identify the utility of a firm's products to its customers.
True
Having a clear mission and vision can provide a basis for a company's internal and external assessment.
True
In multidivisional organizations, each division should develop a mission statement consistent with and supportive of the corporate mission.
True
In order to motivate a workforce effectively, both profit and vision are needed.
True
Individuals who own stock in a corporation are considered stakeholders.
True
