Strategic Management Test 1 (Ch 1-7)
Dr. Milton Friedman's traditional views of business responsibility include all of the following EXCEPT ____________.
- social responsibility is a necessary evil for business - a firm should look to fulfilling its social responsibilities.
Which of the following is NOT in agreement with the concepts of organizational learning theory?
An organization must shift from a horizontally designed company to a more top-down company.
All of the following terms are correct about environmental scanning EXCEPT ________.
managers avoid using environmental scanning in corporations because they thrive on implementing strategies that reduce the element of surprise and they ignore the long-term health in the organization
The basic model of strategic management consists of all the four basic components EXCEPT ________.
marketing department
An organization's ________ is the purpose or reason for the organization's existence.
mission
________ constitutes one's rules of personal behavior based on religious or philosophical grounds. ________ is defined as the consensually accepted standards of behavior for an occupation, a trade, or a profession.
morality; ethics
In ________ an organization adjusts defensively to the changing environment around them and uses knowledge offensively to improve that relationship.
organizational learning theory
Which of the following was cited as the most common reason that executives from 111 corporations reported that they bend the rules to attain their objectives?
organizational performance required it.
________ forces allocate power and provide constraining and protecting laws and regulations.
political-legal
The theory of ________ suggests that once a company is successfully established in a specific environmental niche, that company is not able to adapt to changing conditions.
population ecology
According to L. Kohlberg, which level of moral development is characterized by a concern for self?
preconventional
Archie Carroll proposed that managers of business organizations have four responsibilities. All of the following are responsibilities of business that Carroll proposed EXCEPT ________.
profit maximization
Strategic management consists of four basic interacting components. However, the _______________ planning model predicts that as environmental uncertainty increases, corporations that work diligently to analyze and predict more accurately the changing situation in which they operate will outperform those that do not.
rational
Which of the following indicates how well each company is responding to current and expected key success factors in the industry environment within the industry matrix?
total weighted score
________________ indicates how well each company is responding to current and expected key success factors in the industry environment within the industry matrix.
total weighted score
Successful CEOs are noted for having a clear strategic vision, a strong passion for their company, an ability to communicate with others and have many characteristics of _______________________________ leaders.
transformational
According to Michael Porter's approach to industry analysis, a corporation must scan the environment and assess the importance of five forces. All of the following are forces explained by Porter EXCEPT the ________.
weakness of the existing product
In agreement with the concepts of organizational learning theory, an increasing number of companies are realizing that they must shift to __________________________.
a more top-down organization
All of the following statements are correct about the individual rights approach EXCEPT ________.
a problem with the individual rights approach is the difficulty in recognizing all the benefit and costs of any particular decision
Which of the following terms is used to describe the relationship among groups in determining the direction and performance of the corporation?
corporate governance
Research indicates that there is a strong association between ________________________.
corporate performance and competitive intelligence activities
Although neither the composition of boards nor the board leadership structure has been consistently linked to firm financial performance, better governance ___________________.
does lead to higher credit ratings and stock prices.
In a fragmented industry, as new competitors enter the industry, prices ________ as a result of the competition.
drop
In a legal sense, the board is required to direct the affairs of the corporation but not to manage them. Which of the following terms describes how the board of directors is charged by law to act?
due care
Archie Carroll proposed that the managers of business organizations have four responsibilities. Carroll lists these four responsibilities in order of priority. Which of the following does Carroll note has the highest priority?
economic
In order to determine which group's interest has priority, the corporation may need to craft a(an) ________________, an overarching strategy that explicitly articulates the firm's ethical relationship with its stakeholders.
enterprise strategy
A(n) ________ is an overarching strategy that explicitly articulates the firm's ethical relationship with its shareholders.
enterprise strategy
Which of the following components of the strategic management process is used to monitor, evaluate, and disseminate information from the external and internal environments to key people in the organization?
environmental scanning
_______________ is an overarching term encompassing the monitoring, evaluation, and dissemination of information relevant to the organizational development of strategy.
environmental scanning
A person's _______________________ is affected by his or her level of moral development, certain personality variables, and such situational factors as the job itself, the supervisor, and the organizational culture.
ethical behavior
Which of the following is the directing of activities toward the accomplishment of corporate objectives?
executive leadership
All of the following were reported by the Association of Corporate Directors as the most important issues boards should address EXCEPT ________.
federal laws
In a declining industry, the industry tends to consolidate around ________ competitors; whereas the competitors are larger.
fewer
Strategic _______________ demands a long-term commitment to the development and nurturing of critical resources and capabilities.
flexibility
Which of the following statements is NOT true about a consolidated industry?
focus is on positioning, not differentiation
A(n) ________ is where no firm has a large market share, and each firm serves only a small piece of the total market in competition with others.
fragmented industry
All of the following statements about mission statements are true EXCEPT ________.
individuals and groups consider vision and mission as the same concept and they are useless when combined into a single mission statement
A(n) ________ matrix gives the weight for each factor based on how important that factor is for success within the industry.
industry
Which of the following refers to an in-depth examination of key factors within a corporation's task environment?
industry analysis
New products, services, methods, and organizational approaches that allow the business to achieve extraordinary returns. This approach is called _________________.
innovation
________ is considered the machine that generates business opportunities in the market. Managers also use this to describe new products, services, and methods of organizational approaches that allow businesses to achieve extraordinary returns.
innovation
Michael Porter, an authority on competitive strategy, contends that a corporation is most concerned with the intensity of competition within its industry. The level of this intensity is determined by basic competitive forces driving the industry, which include all of the following EXCEPT ________________.
intensity of innovation among competitors
The ________ approach proposes that decision makers be equitable, fair, and impartial in the distribution of costs and benefits to individuals and groups. The ________ approach proposes that actions and plans should be judged by their consequences.
justice; utilitarian
The height of exit barriers does which of the following?
keeps a company from leaving an industry
All of the following are true about key success factors needed to create an industry matrix EXCEPT ________.
key success factors remain the same from industry to industry
A(n) ________ is skilled at creating, acquiring, and transferring knowledge and modifying its behavior to reflect new knowledge.
learning organization
To be competitive, it is important that corporations become _______________.
less bureaucratic and more flexible
Strategic ________________ is essential for learning organizations to avoid stagnation through continuous self-examination and experimentation
management
Which group supported a more open nominating process that enabled shareholders to vote out directors who ignore shareholder interests?
AFL-CIO
Which of the following is NOT one of the four main activities of a learning organization?
Accepting that stagnation can have a positive impact on a company as well as negative
As a firm or business unit develops strategies, programs, and the like, it often must go back to revise or correct decisions made earlier in the process. This process, called "feedback/learning", occurs at which stage of the strategic management process?
After environmental scanning, strategy formulation, strategy implementation, and evaluation and control.
Which of the following is NOT a current trend in regard to boards of directors?
Board members self-nominating or nominations only by other board members
The term corporate governance refers to the relationship among which of the following groups in determining the direction and performance of the corporation?
Board of Directors, top management, stakeholders.
Laws and standards defining the responsibilities of boards of directors vary from country to country. Board members in ________ face more than 100 provincial and federal laws governing director liability; whereas, the ________ has no clear national standards or federal laws.
Canada; United States
Which of the following terms is used to describe companies that are willing to replace popular produces prior to a competitor?
Cannibalize
Which of the following statements is NOT true about a fragmented industry?
Competitors have no reason to differentiate their products from one another's in order to avoid the fierce price competition.
Environmental uncertainty can be BEST described by which of the following?
Environmental uncertainty is the degree of complexity plus the degree of change that exists in an organization's external environment.
All of the following are true about external strategic factors EXCEPT which of the following?
External strategic factors do not have an impact the external environment and include trends in the economic part of the societal environment, which can have an obvious impact on business activity; trends in the technological part of the societal environment can also have a great impact on multiple industries.
________ referred to the social responsibility of a business as a "fundamentally subversive doctrine"; whereas ________ proposed that the managers of business organizations have four responsibilities: economic, legal, ethical, and discretionary.
Friedman; Carroll
Which of the following is NOT a political-legal variable in the societal environment?
GDP trends
Of the following, which is NOT a responsibility of a board of directors?
General succession planning and human resource responsibilities
In a research study, investors indicated they are willing to pay more for a corporation's stock because of certain reasons. Of the following, which is NOT a primary reason they would pay more?
Good governance automatically reduces accounting and auditing costs.
________ presented two principles, the categorical imperatives, to guide our actions.
Immanuel Kant
________ proposes that a company can adapt to changing conditions by mimicking other successful companies.
Institution theory
Today, the term used to describe a business's sustainability is the triple bottom line. Which of the following correctly identify "the triple bottom line?"
Profit/Loss; People; Planet
Which strategic type is characterized as companies with fairly broad product lines that focus on product innovation and market opportunities?
Prospectors
Large corporations categorize the natural and societal environments in any one geographic region into five areas and focus their scanning in each area on trends that have corporate-wide relevance. This is called a ______________________ analysis.
STEEP
To answer questions about competitors, competitive intelligence professionals utilize a number of analytical techniques. Of the following, which is NOT one of the techniques used to analyze competitors?
STEEP Analysis
Which of the following is NOT an environmental force of STEEP analysis?
Task
According to Michael Porter, what impact, if any, do competitive forces within an industry have on a company's ability to raise prices and earn greater profits?
The strength of the competitive forces determines ultimate profit potential and long run return on invested capital.
Which of the following statements is an example of why individuals or groups might act unethically?
There is no worldwide standard of conduct for business people
All of the following statements are examples of sustainable business practices EXCEPT ________.
a company that moves its operation offshore to a developing nation that has fewer governmental restrictions
Which of the following statements is true about a fragmented industry?
a cleaning service is an example of a fragmented industry
In order for a business corporation to be sustainable - that is, to be successful over a long period of time-it must satisfy ______________________________.
all of its economic, legal, ethical, and discretionary responsibilities.
All EXCEPT ________ are becoming more common on boards in the United States and the United Kingdom than in the past.
board members older than age 70
Corporations are fundamentally governed by the ________ overseeing top management, with the concurrence of the shareholder.
board of directors
The ________ holds top management responsible for the strategy and implementation of that strategy at the firm.
board of directors
________ countries tend to be less transparent and have a higher degree of corruption; whereas ________ countries tend to be more transparent and have a lower degree of corruption.
relationship-based; rule-based
Society increasingly expects boards of directors to balance the economic goal of profitability with ________.
social needs of society
Moral relativism claims that morality is relative to some personal, social, or cultural standard and that there is no method for deciding whether one decision is better than another. Which of the following is NOT a form of moral relativism?
societal relativism
As ________ evolve, the discretionary responsibilities of today can become the ethical responsibilities of tomorrow..
societal values
A corporation's task environment includes numerous groups with interest in a company's activities. These groups are referred to as ________ because they affect or are affected by the achievement of the firm's objectives.
stakeholders
The willingness to reject unfamiliar as well as negative information is called ________________ myopia.
strategic
________ describes the ability to shift from one dominant strategy to another.
strategic flexibility
A(n) ________ is a set of business units or firms that pursue similar strategies with similar resources.
strategic group
All of the following are true about constructing strategic group maps EXCEPT ________.
strategic groups in many industries are singled out and mapped by plotting the market position of one industry on a two-dimensional graph
Although ________ is fundamentally concerned with strengths, weaknesses, opportunities, and threats, the methods to analyze each has developed substantially in the past two decades.
strategic management
Many large corporations have a(n) ________ charged with supporting both top management and the business units in the strategic planning process.
strategic planning staff
________ is a category of firms based on a common strategic orientation and a combination of structure, culture, and processes consistent with that strategy.
strategic type
Which of the following most accurately describes what the company is capable of becoming, and is often communicated in the company's vision statement?
strategic vision
A ________ is a product that appears to be unique, but it can satisfy the same need as another product found by consumers in the marketplace.
substitute product
The variables that can significantly affect the overall competitive positions of companies within any particular industry are known as key__________________________ factors.
success
Crane and Matten point out that the concept of ________ should be broadened to include economic, social, and environmental concerns. They argue that it is sometimes impossible to address this issue of the natural environment without considering the social and economic aspects of relevant communities and their activities.
sustainability
Various theories have been proposed to account for how organizations obtain fit with their environment. Which of the following is NOT one of the dominant theories?
tactical choice perspective
The ________ environment includes those elements or groups that directly affect a corporation and, in turn, are affected by it.
task
The political-legal part of the societal environment has a significant impact not only on the level of competition within an industry but also on which strategies might be successful. All of the following are correct about an organization's political-legal part of the societal environment EXCEPT ________.
the United States' $66 trillion global economy operates through a set of rules established by multidomestic corporations (MNC)
All of the following are correct about the code of ethics EXCEPT ________.
the code of ethics outlines various corporate ethical policies, but it does not specify how an organization expects its employees to behave while on the job
globalization
the integrated internationalization of markets and corporations
All of the following are true about industries that are in the growth or mature markets EXCEPT ________.
the tobacco industry is an example of an industry currently in the growth to maturity stage of the product life cycle
The term used to describe a business's sustainability is ________.
the triple bottom line