Contemporary Management Chapter 8

Another name for contingency planning is _____. A. single-use planning B. ad-hoc planning C. business planning D. divisional-level planning E. scenario planning

E. scenario planning

Typically ______-level goals and strategies require intermediate- and short-term plans. A. functional B. business C. divisional D. corporate E. global

A. functional

The duration over which a plan is intended to be applied or endured is called _____. A. an event compass B. goal duration C. plan endurance D. target visibility E. a time horizon

E. a time horizon

Selling the same standardized product and using the same basic marketing approach in each national market is called _____. A. unrelated diversification strategy B. multidomestic strategy C. national strategy D. focused-differentiation strategy E. global strategy

E. global strategy

_____ is a corporate-level strategy that emphasizes on reinvesting a company's profits in strengthening its competitive position in its current industry. A. Concentration on a single industry B. Forward vertical integration C. Diversification D. Backward vertical integration E. International expansion

A. Concentration on a single industry

Which method of international expansion poses the least amount of risk? A. Exporting B. Franchising C. Licensing D. Wholly owned subsidiary E. Joint venture

A. Exporting

Which of the following will most likely be an opportunity according to an organization's SWOT analysis? A. The company can probably takeover one of its bankrupt competitors. B. The sales of the organization's products are the highest in the industry. C. The organization is growing rapidly without any direction. D. The government has passed a law which will increase labor costs. E. The organization faces increased competition in its market.

A. The company can probably takeover one of its bankrupt competitors.

The managers of an organization develop a single, well-researched, and effective plan to complete a set of tasks. Which of the following qualities, according to Henry Fayol, does this plan have? A. Unity B. Flexibility C. Continuity D. Accuracy E. Synergy

A. Unity

In a first of its kind, a multinational tire manufacturer, introduces a new range of premium tires that can handle extreme temperatures better at a higher price. The tires are designed keeping in mind the climatic conditions in the Middle East and products are marketed only in the Middle East. The manufacturer is pursuing ____. A. a focused differentiation strategy B. a focused low-cost strategy C. a general differentiation strategy D. a general low-cost strategy E. both, a low-cost as well as a differentiation strategy

A. a focused differentiation strategy

Divisional managers' decisions pertaining to divisions' long-term goals, overall strategy, and structure is called an organization's _____ plan. A. business-level B. corporate-level C. functional-level D. departmental-level E. global-level

A. business-level

Top management's decisions pertaining to the organization's mission, overall strategy, and structure constitutes an organization's _____. A. corporate-level plan B. divisional-level plan C. functional-level plan D. business-level plan E. departmental-level plan

A. corporate-level plan

An organization attempting to succeed by distinguishing its products from those of the competition is most likely to use a(n) _____. A. differentiation strategy B. low-cost strategy C. diversification strategy D. stuck-in-the-middle strategy E. association strategy

A. differentiation strategy

The SUV division of a major automobile corporation decides to release a new model a month ahead of its stated release and notifies the decision to all the departments associated with the division. The departmental managers must alter their _____ to accommodate the earlier release date. A. functional-level plan B. business-level plan C. divisional-level plan D. corporate-level plan E. strategic-level plan

A. functional-level plan

Japanese consumer electronics company Sony Corporation and the Swedish telecommunications company Ericsson combining a part of their resources to manufacture mobile phones is an example of a(n) _____. A. joint venture B. acquisition C. wholly owned subsidiary D. merger E. hostile takeover

A. joint venture

Allowing a foreign organization to take charge of manufacturing and distributing a product in its country or world region in return for a negotiated fee is referred to as: A. licensing. B. franchising. C. strategic alliance. D. exporting. E. importing.

A. licensing.

In the Five Forces Model, the _____ that companies compete against one another for customers, the _____ the level of profits is likely to be for that industry. A. more; lower B. more; higher C. less; lower D. less; equal E. more; equal

A. more; lower

Though not formally written, an organization allows its employees to dress casually on Fridays. This is a(n) _____ of the organization. A. policy B. rule C. standard operating procedure D. standing plan E. ethical code

A. policy

Entering a new business or industry to create a competitive advantage in one or more of an organization's existing divisions or businesses is called _____. A. related diversification strategy B. international expansion strategy C. low-cost strategy D. concentration on a single industry E. unrelated diversification strategy

A. related diversification strategy

A(n) _____ is a cluster of decisions about what goals to pursue, what actions to take, and how to use resources to achieve goals. A. strategy B. objective C. motto D. allocation E. accomplishment

A. strategy

_____ are used in situations in which programmed decision making is appropriate. A. Single-use plans B. Functional plans C. Rolling plans D. Scenario plans E. Standing plans

E. Standing plans

A group of managers analyze both, the internal strengths and weaknesses of their organization as well as the opportunities and threats of the external environment. What type of analysis is this? A. Mission analysis B. SWOT analysis C. Functional analysis D. Diversification analysis E. Competition analysis

B. SWOT analysis

According to an organization's SWOT analysis, which of the following would be a potential strength? A. The organization has the potential to break the barriers of entry to a new market. B. The organization has the highest profit margin in its market. C. The organization's research and development sector is on the decline. D. The organization's customer preferences are rapidly changing. E. There is a lack of co-operation between the organization's various divisions.

B. The organization has the highest profit margin in its market.

The first step in implementing a strategy is: A. drafting detailed action plans that specify how a strategy is to be implemented. B. allocating responsibility for implementation to the appropriate individuals or groups. C. allocating appropriate resources to the responsible individuals or groups. D. holding specific individuals or groups responsible for the attainment of corporate, divisional, and functional goals. E. establishing a timetable for implementation that includes precise, measurable goals linked to the attainment of the action plan.

B. allocating responsibility for implementation to the appropriate individuals or groups.

A(n) _____ strategy indicates how a division intends to compete against its rivals in an industry. A. corporate-level B. business-level C. functional-level D. departmental-level E. international-level

B. business-level

According to Henry Fayol an effective plan should have four qualities, namely unity, continuity, accuracy, and _____. A. sustainability B. flexibility C. accountability D. consistency E. synergy

B. flexibility

Selling to a foreign organization the rights to use a brand name and operating know-how in return for a lump-sum payment and a share of the profits is referred to as: A. licensing. B. franchising. C. strategic alliance. D. exporting. E. importing.

B. franchising.

Most electronic goods have the option of changing the operating language. This done by manufacturers so that the same electronic device can be supplied and marketed around the world. The manufacturers in this case are applying a(n) _____. A. focused-differentiation strategy B. global strategy C. related diversification strategy D. multidomestic strategy E. unrelated diversification strategy

B. global strategy

A furniture company is trying to keep the costs of the company low by switching its suppliers and ordering materials in larger quantities in order to reduce overall costs. The company is employing a _____. A. focused differentiation strategy B. low-cost strategy C. high-cost strategy D. unifying strategy E. hypercompetition strategy

B. low-cost strategy

A(n) _____ broadly defines an organization's purpose, what it is seeking to achieve from its activities, identifies what is unique or important about its products to its employees and customers, and also distinguishes or differentiates the organization in some ways from its competitors. A. business plan B. mission statement C. SWOT analysis D. general advertisement E. strategic plan

B. mission statement

Plans that are developed to handle nonprogrammed decision making in unusual or one-of-a-kind situations are called _____. A. standing plans B. single-use plans C. general plans D. global plans E. rolling plans

B. single-use plans

A written set of instructions which describes the series of actions that a manager should take in a specific situation is known as a: A. policy. B. standard operating procedure. C. heuristic. D. rolling plan. E. rule.

B. standard operating procedure.

Employees tend to be motivated and perform better if they are taken in by the vision of the top managers of their organizations. It therefore becomes essentials for top managers to develop a strong sense of _____. A. goal orientation B. strategic leadership C. strategy formulation D. business planning E. organizational affluence

B. strategic leadership

Cameo Ltd., a record label company, subsequently entered the airline industry to expand business. This example of a record label company entering the airline industry is an example of _____. A. vertical integration B. unrelated diversification C. related diversification D. horizontal integration E. concentration

B. unrelated diversification

In performing a SWOT analysis, a firm realized that its managers were untrained to handle the requirements of its new division. The firm would classify this as a(n) _____. A. strength B. weakness C. opportunity D. threat E. advantage

B. weakness

Which of the following statements about simultaneously pursuing both a low-cost strategy and a differentiation strategy is true? A. Organizations stuck in the middle tend to have high levels of performance than those that pursue a low-cost or a differentiation strategy. B. Focusing on differentiation of a product will result in reduced costs for a company. C. Extremely well managed companies may be able to keep low costs and differentiate their products. D. Managers try to gain a competitive advantage by focusing only on driving the company's costs down below the costs of industry rivals. E. Managers try to gain a competitive advantage by focusing only on distinguishing an organization's products from the products of competitors on dimensions such as product design, quality, or after-sales service.

C. Extremely well managed companies may be able to keep low costs and differentiate their products.

To determine an organization's missions and goals, managers must first _____. A. perform a SWOT analysis B. apply the Five Forces Model C. define its business D. develop a long-term plan E. develop a short-term plan

C. define its business

A toy manufacturing company which previously sold its products through a popular toy and juvenile-product retailer decides to enter the retail industry, quickly establishing several retail outlets exclusively for its products. The toy manufacturing company is engaging in _____. A. forward horizontal integration B. backward vertical integration C. forward vertical integration D. backward horizontal integration E. unrelated diversification

C. forward vertical integration

In order to cater to local tastes and culinary traditions, and often in respect of particular laws or religious beliefs, McDonald's offers customized versions of its menu to suit different countries. This is an example of _____. A. international strategy B. global strategy C. multidomestic strategy D. low-cost strategy E. unrelated diversification strategy

C. multidomestic strategy

A standing plan that acts as a general guide to action that applies to the employees of an organization is called a _____. A. belief B. rule C. policy D. standard operating procedure E. scenario

C. policy

A _____ enables managers to make midcourse corrections if environmental changes warrant or to change the thrust of the plan altogether if it no longer seems appropriate? A. standing plan B. long-term plan C. rolling plan D. contingency plan E. general plan

C. rolling plan

Nokia has established production operations in foreign countries to sell its phones in those regions. The production operations perform as separate entities without any local direct involvement. These production operations are _____ of Nokia. A. joint ventures B. acquisitions C. wholly owned subsidiaries D. mergers E. hostile takeovers

C. wholly owned subsidiaries

_____ is a plan of action to improve the ability of each of an organization's functions to perform its task-specific activities in ways that add value to an organization's goods and services. A. Business-level strategy B. Divisional-level strategy C. Corporate-level strategy D. Departmental-level strategy E. Top-level strategy

D. Departmental-level strategy

_____ is the final step in implementing strategy. A. Drafting detailed action plans that specify how a strategy is to be implemented B. Allocating responsibility for implementation to the appropriate individuals or groups C. Establishing a timetable for implementation that includes precise, measurable goals linked to the attainment of the action plan D. Holding specific individuals or groups responsible for the attainment of corporate, divisional, and functional goals E. Allocating appropriate resources to the responsible individuals or groups

D. Holding specific individuals or groups responsible for the attainment of corporate, divisional, and functional goals

Which of the following can be defined a threat according to the five forces model? A. The level of rivalry among organizations in an industry is low B. Brand loyalty is very high C. Large number of suppliers D. Only a few large customers are available to buy an industry's output E. Products are unique and cannot be substituted

D. Only a few large customers are available to buy an industry's output

According to Henry Fayol, _____ means that managers need to make every attempt to collect and use all available information in the organization's planning process. A. unity B. flexibility C. continuity D. accuracy E. synergy

D. accuracy

A functional-level plan states the goals that the managers of each function will pursue to help their division attain its ______ goals, which, in turn, will allow the entire company to achieve its ______ goals. A. departmental-level; functional B. business-level; department C. divisional-level; divisional D. business-level; corporate E. functional-level; corporate

D. business-level; corporate

As a part of its yearly planning activities, PDQ Financial Services, generates a list of possible future scenarios and creates a plan to respond to each of these forecasts. PDQ Financial Services is practicing _____. A. single-use planning B. ad-hoc planning C. divisional-level planning D. contingency planning E. functional planning

D. contingency planning

There has been a rapid increase in the percentage of population of a third-world nation switching to cellular technology in recent years. A major multinational telecommunication services company decides to take advantage of this change and plans to setup industry in the country with the intention of dominating the country's telecommunication market. This is an example of a _____. A. divisional-level strategy B. departmental-level strategy C. functional-level strategy D. corporate-level strategy E. business-level strategy

D. corporate-level strategy

In large organizations the functional level of management is also known as the _____ of management. A. business level B. corporate level C. divisional level D. departmental level E. top level

D. departmental level

The first step in planning for an organization is: A. procuring raw materials and human resources. B. analyzing situations and formulating strategies. C. expanding the organization's business globally. D. determining the organization's missions and goals. E. allocating resources and responsibilities to achieve strategies.

D. determining the organization's missions and goals.

There is constant, fierce competition between telecommunication companies due to the continuous advances in mobile technology and a wide range of customers tastes. This is called _____. A. ultracompetition B. hypocompetition C. supercompetition D. hypercompetition E. extracompetition

D. hypercompetition

Because of the hostile external environment, AKY Consulting, treats its multiyear corporate-level plan as a _____ plan in order to maintain flexibility without losing sight of the need to plan for the long term. A. fixed B. general C. standing D. rolling E. business

D. rolling

A firm has a formal, written guide regarding its zero-tolerance attitude towards sexual harassment and the consequences of its violation. By definition, this is a _____ of the firm. A. standing plan B. mission statement C. policy D. rule E. norm

D. rule

Policies, rules, and standard operating procedures (SOPs) are all types of _____ plans. A. single-use B. functional C. rolling D. standing E. scenario

D. standing

An agreement in which managers pool or share their organization's resources and know-how with a foreign company, and the two organizations share the rewards and risks of starting a new venture is called a(n) _____. A. takeover agreement B. franchise sharing C. license lending D. strategic alliance E. foreign subsidiary

D. strategic alliance

In performing a SWOT analysis, a furniture company realized that the number of competing firms in its industry was increasing. The company would classify this as a(n) _____. A. strength B. weakness C. opportunity D. threat E. advantage

D. threat

_____ is a corporate-level strategy in which a company expands its business operations into a new industry that produces inputs for the company's products. A. Forward vertical integration B. Forward horizontal integration C. Unrelated diversification D. Backward horizontal integration E. Backward vertical integration

E. Backward vertical integration

Two divisions of a company decide to use the same manufacturing facilities to capitalize on the organization's excess capacity and reduce fixed costs. This is an example of _____. A. concentration B. rivalry C. counteraction D. adversity E. synergy

E. synergy

The pharmaceutical industry is extremely dynamic. A company that releases a product to the general public with the intention of keeping prices high may see quick competition arising from other products made from different compounds that perform the same functions as the company's product. According to the five forces model, this type of threat is called _____. A. the level of rivalry among organizations in an industry B. the potential for entry into an industry C. the power of large suppliers D. the power of large customers E. the threat of substitute products

E. the threat of substitute products

The method of international expansion which presents managers with many threats and is the most expensive due to the high level of foreign investment is the method of international expansion through _____. A. joint ventures B. exporting and importing C. licensing D. franchising E. wholly owned subsidaries

E. wholly owned subsidaries