Chapter 9 final

corrective actions are almost always needed except when

(1) external and internal factors have not significantly changed and (2) the firm is progressing satisfactorily toward achieving stated objectives.

Which of the following is NOT true of boards​ today? Question content area bottom Part 1 A. Boards are more autonomous than ever. B. ​Globally, most boards have ended their image as the​ CEO's rubber-stamping friends. C. Boards are more cognizant of compliance issues. D. Boards are more cognizant of auditing issues. E. Boards are less proactive and more reactive.

Boards are less proactive and more reactive.

Does this textbook advocate a​ top-down or​ bottom-up approach to strategic​ planning? Question content area bottom Part 1 A. It depends on the size of the firm. B. It depends on the workforce. C. ​Bottom-up D. It depends on the industry. E. ​Top-down

Bottom-up

Linneman and Chandran report that contingency planning gives users like​ DuPont, Dow​ Chemical, Consolidated​ Foods, and Emerson Electric three major benefits. It enables​ _____. Question content area bottom Part 1 A. managers to be​ proactive, more adaptive and more responsive to change B. rapid responses to​ change, prevents panic in crisis situations and make managers more adaptable C. rapid responses to​ change, prevents panic in crisis situations and makes managers less adaptable D. slower responses to​ change, prevents panic in crisis​ situations, and makes managers more proactive E. managers to be more​ adaptable, more responsive to​ change, and creates panic in crisis situations

rapid responses to​ change, prevents panic in crisis situations and make managers more adaptable

Part of the rationale behind balanced scorecard is the difference between financial and​ non-financial measures: financial measures better​ _____, whereas nonfinancial metrics better​ ______. Question content area bottom Part 1 A. show customer​ concerns, show production concerns B. report what has​ happened, predict the future C. help​ growth, help to sustain D. give​ nuance, show the big picture E. show​ long-term value, show​ short-term value

report what has​ happened, predict the future

The​ strategy-evaluation process includes three basic activities. Which​ activity(s) below is not one of the​ three? Question content area bottom Part 1 A. Take corrective actions to ensure that performance conforms to plans. B. Examine the underlying bases of a​ firm's strategy. C. Develop a clear vision and mission. D. Compare expected results with actual results.

Develop a clear vision and mission.

Which of the following is included in Business​ Week's principles of good​ governance? Question content area bottom Part 1 A. Do not create attendance requirements. B. Do not allow the CEO to be chairperson of the board. C. Do not prohibit interlocking directorships. D. Do not allow board members to own a large amount of the​ firm's equity. E. Do not allow the board to meet without top management in attendance.

Do not allow the CEO to be chairperson of the board.

Which of the following should NOT be included as a​ non-financial measure of a Balanced​ Scorecard? Question content area bottom Part 1 A. Pollution abatement B. Employee morale C. Community involvement D. EPS E. Customer service

EPS

When evaluating​ strategies, IFRS stands for what​ term? Question content area bottom Part 1 A. International financial reporting standards B. International financial ratio standards C. Interim financial ratio standards D. Interim financial reporting standards E. Interactive financial reporting standards

International financial reporting standards

Which statement below is not a guideline for effective strategic​ planning, according to R. T.​ Lenz? Question content area bottom Part 1 A. It should contain vague planning jargon. B. Keep the process simple and easily understandable. C. Do not allow technicians to monopolize the planning process. D. To the extent​ possible, involve managers from all areas of the firm. E. Welcome bad news and encourage​ devil's advocate thinking

It should contain vague planning jargon.

What is the second of the three​ strategy-evaluation activities? Question content area bottom Part 1 A. Survey managers and employees for input information. B. Calculate all relevant financial ratios and compare with industry norms. C. Measure organizational performance. D. Establish clear objectives. E. Review the underlying bases of strategy.

Measure organizational performance.

As described in Chapter​ 9, what is the first​ strategy-evaluation activity? Question content area bottom Part 1 A. Establish a clear vision and mission statement. B. Measure performance of the firm across all products and regions. C. Review the underlying bases of strategy. D. Establish clear objectives. E. Formulate strategies.

Review the underlying bases of strategy.

Which of the following is not true concerning contingency​ plans? Question content area bottom Part 1 A. Contingency plans can minimize the impact of potential threats. B. Contingency plans should be as simple as possible. C. Contingency plans are alternative plans that can be put into effect if certain key events do not occur as expected. D. Strategists should try to cover all bases for all possible contingencies. E. Only​ high-priority areas require the insurance of contingency plans.

Strategists should try to cover all bases for all possible contingencies.

Which statement below is​ FALSE? Question content area bottom Part 1 A. Small companies do not need extnsive evaluative reporting systems. B. Managers in small companies often communicate daily with each other and their employees C. Strategy evaluations should be simple but cumbersome and restrictive. D. No department should fail to cooperate with another in evaluating strategies. E. Complex​ strategy-evaluation systems often confuse people and accomplish little

Strategy evaluations should be simple but cumbersome and restrictive.

Which statement below is​ FALSE? Question content area bottom Part 1 A. Successful companies see information where others see only data. B. Successful companies maintain loose financial controls. C. Successful companies have a voracious hunger for facts. D. The people at successful companies​ don't regard controls as an imposition of autocracy but as the benign checks and balances that allow them to be creative and free. E. Successful companies treat facts as friends and controls as liberating.

Successful companies maintain loose financial controls.

The strategy evaluation process includes three basic activities. Which of the following is one of​ them? Question content area bottom Part 1 A. Take corrective actions to ensure that performance conforms to plans. B. Choose which products to sell. C. Plan how productions will be produced. D. Motivate compliance with work rules. E. Set performance goals for all employees.

Take corrective actions to ensure that performance conforms to plans.

​_____ is the third​ strategy-evaluation activity. Question content area bottom Part 1 A. Take corrective actions. B. Revise the​ firm's vision,​ mission, and objectives. C. Reward both employees and managers appropriately. D. ​Re-formulate strategies. E. Develop projected financial statements.

Take corrective actions.

Which​ strategy-evaluation activity requires making changes to competitively reposition a firm for the​ future? Question content area bottom Part 1 A. Comparing expected results with actual results B. Taking corrective actions C. Examining the underlying bases of a​ firm's strategy D. Revising the EFE matrix E. Continuously monitoring existing strategy

Taking corrective actions

Contingency plans should be established if​ _____. Question content area bottom Part 1 A. demand for a new product cannot be determined B. sales objectives are reached C. a major competitor liquidates D. demand for a product does as expected E. a new technological advancement makes a new product obsolete sooner than expected

a new technological advancement makes a new product obsolete sooner than expected

Developed in the early 1990s by Harvard Business School professors Robert Kaplan and David Norton and refined continually since​ then, the​ ______ is a​ strategy-evaluation and control technique. Question content area bottom Part 1 A. sure B. benchmarking approach C. value chain concept D. balanced scorecard E. financial ratio analysis method

balanced scorecard

The basic premise of​ ______ is that firms should establish objectives and evaluate strategies on criteria other than using only financial measures. Question content area bottom Part 1 A. benchmarking B. balanced scorecard C. reengineering D. value chain analysis E. ​cost-benefit analysis

balanced scorecard

The act of oversight and direction provided by a Board of Directors is referred to as​ ______. Question content area bottom Part 1 A. steering B. governing C. directing D. government E. governance

governance

Strategy-evaluation activities should be performed​ ______. Question content area bottom Part 1 A. at the end of every year B. at the end of specified periods of time C. on a continuing basis D. immediately after problems occur E. each month

on a continuing basis

What is considered the cornerstone of effective strategy​ evaluation? Question content area bottom Part 1 A. Adequate and timely feedback B. Interviews C. Planning D. Employee surveys E. Inventory control

Adequate and timely feedback

Which responsibility are board members addressing when they stimulate corporate growth so that the firm will​ survive, guard against equity​ dilution, and declare proper​ dividends? Question content area bottom Part 1 A. Control and oversight over management B. Adherence to legal prescriptions C. Management of the overall strategy D. Advancement of​ stockholders' rights E. Consideration of all​ stakeholders' interests

Advancement of​ stockholders' rights

What are the basic activities of the​ strategy-evaluation process? Question content area bottom Part 1 A. Examine the underlying bases of a​ firm's strategy, compare expected results with actual​ results, and take corrective actions to ensure the performance conforms to plans. B. Determine if profitability has increased​ and, if​ not, develop new expected results and take corrective actions. C. Examine the​ firm's existing​ strategy, compare it to​ competitors' strategies, and take corrective actions. D. Determine if assets have increased​ and, if​ not, take the appropriate corrective actions. E. Examine a​ firm's financial​ position, compare this to industry​ standards, and take corrective actions.

Examine the underlying bases of a​ firm's strategy, compare expected results with actual​ results, and take corrective actions to ensure the performance conforms to plans.

Which statement below is FALSE regarding the​ strategic-planning process? Question content area bottom Part 1 A. Executives should keep​ assignments, team​ memberships, and meeting formats constant for a year. B. Pursuing too many strategies at the same time is a critical mistake. C. Strategic planning should be a learning process for all managers and employees. D. Strategic planning should be a people process more than a paper process. E. Strategic decisions require tradeoffs such as​ long-range versus​ short-range considerations and maximizing profits versus increasing​ shareholders' wealth.

Executives should keep​ assignments, team​ memberships, and meeting formats constant for a year.

Which publication annually publishes the​ "World's Most Admired​ Companies," which provides helpful​ strategy-evaluation information? Question content area bottom Part 1 A. Wall Street Journal B. Fortune C. ​Investor's Business Daily D. Forbes E. Business Week

Fortune

When evaluating​ strategies, GAAP stands for what​ term? Question content area bottom Part 1 A. Generally accepted accounting principles B. Generally accepted actuary procedures C. Generally accepted auditing principles D. Generally accepted accounting procedures E. Generally accepted auditing standards

Generally accepted accounting principles

When evaluating​ strategies, GAAS stands for what​ term? Question content area bottom Part 1 A. Generally accepted administrative scales B. Generally accepted auditing standards C. Generally accepted administrative standards D. Generally accepted actuary standards E. Generally accepted actuary scales

Generally accepted auditing standards

​______ is the characteristic of ensuring that​ long-term strategic objectives and plans are established and that the proper management structure is in place to achieve those​ objectives, while at the same time making sure that the structure functions to maintain the​ corporation's integrity,​ reputation, and responsibility to its various constituencies. Question content area bottom Part 1 A. Reengineering B. Benchmarking C. Goverance D. Value chain analysis E. Sustainability

Goverance

Which statement below is​ FALSE? Question content area bottom Part 1 A. Too much pressure from top managers may result in lower managers contriving numbers they think will be satisfactory. B. The more managers attempt to evaluate the behavior of​ others, the less control they have. C. Too much emphasis on evaluating strategies may be expensive and counterproductive. D. In many​ organizations, strategy evaluation is simply an appraisal of how well an organization has performed.

In many​ organizations, strategy evaluation is simply an appraisal of how well an organization has performed.

Which statement below is​ FALSE? Question content area bottom Part 1 A. The Mintzberg philosophy insists on​ informality, whereas strategy scientists​ (and the authors of this​ text) insist on more formality. B. Proponents of the artistic view often consider​ strategic-planning exercises to be time poorly spent. C. Mintzberg refers to strategic planning as an​ "inevitable" process, whereas strategy scientists use the term​ "absolute" process. D. This textbook rejects the Mintzberg philosophy. E. ​Mintzberg's notion of​ "crafting" strategies embodies the artistic​ model, which suggests that strategic decision making be based primarily on holistic​ thinking, intuition, and creativity.

Mintzberg refers to strategic planning as an​ "inevitable" process, whereas strategy scientists use the term​ "absolute" process.

Which of the following is a current trend in the U.S. regarding Boards of​ Directors? Question content area bottom Part 1 A. Less board member accountability with larger boards B. Eliminating the Board of Directors C. Less board member accountability with smaller boards D. Much greater board member accountability with larger boards E. Much greater board member accountability with smaller boards

Much greater board member accountability with smaller boards

Which statement below is​ FALSE? Question content area bottom Part 1 A. Strategic management must not become​ ritualistic, stilted,​ orchestrated, or too​ formal, predictable, and rigid. B. Words supported by​ numbers, rather than numbers supported by​ words, should be the medium used to explain strategic issues and organizational responses. Your answer is not correct. C. Numbers supported by​ words, rather than words supported by​ numbers, should be the medium used to explain strategic issues and organizational responses. D. Strategic management should be a​ self-reflective learning process that familiarizes managers and employees in the organization with key strategic issues and feasible alternatives for resolving those issues. E. R.T. Lenz says a guideline to follow in strategic planning is to welcome bad news and encourage​ devil's advocate thinking.

Numbers supported by​ words, rather than words supported by​ numbers, should be the medium used to explain strategic issues and organizational responses.

Advantages of keeping the​ strategic-planning process secret include which statement​ below? Question content area bottom Part 1 A. Openness is always better than secrecy. B. Participants in a visible strategy process become less attractive to rival firms that may lure them away. C. Secrecy increases​ criticism, second-guessing, and hindsight. D. Secrecy enables rival firms to imitate the​ firm's strategies and undermine the firm. E. Participants in a visible strategy process become more attractive to rival​ firms, that may lure them away.

Participants in a visible strategy process become more attractive to rival​ firms, that may lure them away.

Four reasons to be completely open with the strategy process and resultant decisions are given in the​ chapter; these reasons include all of the following except which​ one? Question content area bottom Part 1 A. Participation and openness lead to conciseness and accuracy. B. Visibility promotes​ democracy, whereas secrecy promotes autocracy. Domestic firms and most foreign firms prefer democracy over autocracy as a management style. C. ​Investors, creditors, and other stakeholders have greater basis for supporting a firm when they know what the firm is doing and where the firm is going. D. ​Managers, employees, and other stakeholders can readily contribute to the process. They often have excellent ideas. Secrecy would forgo many excellent ideas. E. Participation and openness enhance​ understanding, commitment, and communication within the firm.

Participation and openness lead to conciseness and accuracy.

Competitive advantages are generally the result of superiority in one​ (or more) of three areas. Which of the following is one of​ them? Question content area bottom Part 1 A. Position B. ​Short-run focus C. Transparency D. Marketing E. Feasibility

Position

Which statement below is​ FALSE? Question content area bottom Part 1 A. The Chinese warrior Sun Tzu and military leaders today strive to keep strategies​ secret, because war is based on​ deception; but for business​ organizations, secrecy may not be best. B. Strategists must decide what is best for their firms. C. Keeping strategies secret from employees and stakeholders at large could severely inhibit employee and stakeholder​ communication, understanding, and​ commitment; likewise, maintaining secrecy could mean forfeiting valuable input that employees and stakeholders could offer regarding the formulation or implementation of the strategy.. D. There are no good reasons to keep the strategy process and strategies themselves visible and open rather than hidden and secret. E. There are good reasons to keep strategies hidden from all but​ top-level executives.

There are no good reasons to keep the strategy process and strategies themselves visible and open rather than hidden and secret.

Which statement below is​ FALSE? Question content area bottom Part 1 A. Firms need to systematically assess their external and internal​ environments, conduct​ research, carefully evaluate the pros and cons of various​ alternatives, perform​ analyses, and then decide on a particular course of action. B. The Mintzberg​ strategic-planning approach insists on​ informality, whereas strategy scientists​ (and this​ text) insist on more formality. C. This textbook is framed primarily on the fact that strategic planning is an art rather than a science. D. This textbook is consistent with most of the strategy literature in advocating that strategic management be viewed more as a science than an art. E. ​Mintzberg's notion of​ "crafting" strategies embodies the artistic​ model, which suggests that strategic decision making be based primarily on holistic​ thinking, intuition,​ creativity, and imagination.

This textbook is framed primarily on the fact that strategic planning is an art rather than a science.

When are positional advantages​ self-sustaining? Question content area bottom Part 1 A. When several competitors are evenly matched B. When market entry costs are low C. When environments are dynamic D. When key external and internal factors remain stable E. When innovation is crucial to success

When key external and internal factors remain stable

What are the five​ issues, beyond​ financial, a firm uses to evaluate its strategies when developing a balanced​ scorecard? Question content area bottom Part 1 A. ​Stakeholders, Managers/Employees,​ Operations/ Processes,​ Community/Social Responsibility, and Business​ Ethics/Natural Environment B. ​Customers, Marketing,​ Operations/ Processes,​ Community/Social Responsibility, and Business​ Ethics/Natural Environment C. ​Customers, Managers/Employees,​ Operations/ Processes,​ Community/Social Responsibility, and Business​ Ethics/Natural Environment D. ​Customers, Managers,​ Employees, Community/Social​ Responsibility, and Culture E. ​Customers, Managers/Employees,​ Operations/ Processes, Social​ Responsibility, and Competitive Position

​Customers, Managers/Employees,​ Operations/ Processes,​ Community/Social Responsibility, and Business​ Ethics/Natural Environment