Exam 1 (1,2,3,4,10)

In order to create a sustainable competitive advantage, businesses need to __________. A) develop a valuable niche. B) develop similar products to what's already on the marketplace. C) develop the most products. D) have the lowest price possible. E) have an online presence.

Develop a valuable niche.

Which of the following would be the least valid reason for making changes to a firm's business strategy? A) Because of performance gaps (differences in expectations and actual performance) B) Because of emerging market opportunities C) Because of recent competitive activities D) Because of recent external changes (i.e., customer lawsuits, supplier changes, etc.) E) Because of a change in the company's leadership

E) Because of a change in the company's leadership

Being socially responsible A) provides a company with a more positive overall reputation. B) has opened doors in local communities. C) has enhanced the company's reputation with consumers. D) may have a positive effect on the firm's financial performance. E) all of the above

E) all of the above

Managers who want to improve ethical behavior should take action such as: A) communicate the code of ethics in training programs. B) emphasize the code of ethics in performance appraisal systems. C) follow a code of ethical behavior themselves. D) communicate the code of ethics in policies and procedures. E) all of the above

E) all of the above

Strategic management is one decision that determines the short-term performance of a corporation. T/F

False Strategic management decisions are focused on long-term goals and outcomes.

The first step in the strategic management process is to define your objectives. T/F

False The first step in the strategic management process is to develop a vision/mission statement.

Strategic Group Maps can be used to help a firm identify its direct competitors and to help identify possible opportunities in the marketplace. T/F

True

The most important resource weaknesses are those that are related to industry key success factors and, therefore, are the ones that need to be addressed quickly. T/F

True

The resources of an organization include such things as its tangible assets, human assets, and intangible assets. T/F

True

The term corporate governance refers to the relationship among the board of directors, top management, and shareholders in determining the direction and performance of the corporation. T/F

True

To be able to maintain a competitive advantage, businesses need the ability to identify and respond to environmental changes well in advance of competition. T/F

True

Walt Disney is an example of business strategy built on expertise, resource strengths, and capabilities not easily imitated by rivals. T/F

True

The VIRO test is used to:

Determine if a resource offers the firm a sustainable competitive advantage Determine if a resource is valuable, rare, difficult to imitate, and the firm is organized to exploit it.

A strategic resource can be all but which of the following?

A change in the firms environment.

Which of the following is not an example of a resource weakness?

A well-known brand name.

Society increasingly expects corporate boards of directors to balance the economic goal of profitability with​ social needs of society. T/F

True

All of the following criteria reflect survey findings of the characteristics of a good director EXCEPT:

-Willing to always agree with executive decisions.

What is the difference between a business model and a business strategy? A) a business strategy answers the question: "How are we going to get there?", whereas a business model puts the numbers to the strategy. B) a business model answers the question: "How are we going to get there?", whereas a business strategy puts the numbers to the strategy. C) a business strategy doesn't consider the long-term, whereas a business model does. D) a business strategy doesn't take the firm's resources into account, where a business model does. E) a business strategy doesn't consider environmental changes, whereas a business model does.

A) A business strategy answers the question: "How are we going there?", whereas a business model puts the numbers to the strategy.

Which of the following is the BEST example of a well-written MISSION statement (contains all of the following components)?

ABC company develops safe, state-of-the-art cleaning supplies for industrial customers nationwide.

All of the following are considered primary stakeholders EXCEPT A) customers. B) governments. C) employees. D) shareholders. E) creditors.

B) governments.

The concept that proposes private corporations have responsibilities to society that extend beyond making a profit is known as A) flexible responsibility. B) social responsibility. C) social flexibility. D) managerial responsibility. E) profit maximization.

B) social responsibility.

According to your textbook (chapter 1), the strategic management process is basically as follows: A. Policies--Mission--Strategies--Objectives. B. Mission--Objectives--Strategies--Policies. C. Objectives--Policies--Strategies--Mission. D. Mission--Policies--Strategies--Objectives.

B. Mission--Objectives--Strategies--Policies.

Which of the following would be the LEAST VALID reason to change a company's business strategy?

Because of a change in the company's leadership.

Which of the following is NOT one of the three big strategic questions that a firm should consider when developing a long-term business strategy (per the Powerpoint presentation)? A) What's the company's present situation? B) Where does the company need to go from here? C) How should we pay our employees? D) How should we get to where we what to go? E) None of the above is a question that a firm should consider when developing a long-term business strategy.

C) How should we pay our employees?

The approach to ethical behavior which proposes that actions and plans should be judged by their consequences, thus producing the greatest benefit to society with the least harm or the lowest cost is called A) individual rights approach. B) mercantilism approach. C) utilitarian approach. D) justice approach. E) moral imperialism approach.

C) utilitarian approach.

Firms normally have three "levels" of strategy, which are (from broad to narrow): A) Industry --> Corporate --> Divisional B) Business --> Divisional --> Functional C) Environmental --> Enterprise --> Corporate D) Corporate --> Business --> Functional E) Environmental --> Corporate --> Functional

D) Corporate --> Business --> Functional

Which of the following is NOT one of the examples provided as an organizational benefit received from being socially responsible? A) They can attract outstanding employees who prefer working for a socially responsible firm. B) They are more likely to be welcomed into a foreign country. C) They are more likely to attract capital infusions from investors who view reputable companies as desirable long-term investments. D) They are guaranteed to maximize resource productivity and reduce the average payback period of investment. E) Their environmental concerns may enable them to charge premium prices and gain brand loyalty.

D) They are guaranteed to maximize resource productivity and reduce the average payback period of investment.

The approach to ethical behavior which proposes that decision makers be equitable, fair, and impartial in the distribution of costs and benefits to individuals and groups is called A) individual rights approach. B) mercantilism approach. C) utilitarian approach. D) justice approach. E) moral imperialism approach.

D) justice approach.

When conducting SWOT analysis, industry analysis is primarily concerned with a corporation's: A. Internal environment B. Economic environment C. Societal environment D. Task environment E. Sociocultural environment

D. Task environment

At a minimum, a well-written mission statement should contain: A. a definition of the company's target market B. the company's market scope C. A list of corporate objectives D. All of the above should be included in the mission statement. E. All but "C" above should be included in the mission statement.

E. All but "C" above should be included in the mission statement.

The most relevant market opportunities to a company are those offering all of which of the following? A. A good match with its financial abilities B. A good match with its resource strengths C. The best prospects for long-term growth D. The best potential for a long-term competitive advantage E. All of the above should be considered when evaluating different market opportunities.

E. All of the above should be considered when evaluating different market opportunities.

According to the Resource Based Theory of developing strategy: A. The possession of strategic resources provides an organization with a golden opportunity to develop a competitive advantage over its rivals. B. "Strategic" resources give the organization power over its rivals. C. Strategic resources are those resources that a firm possesses that are rare or unique in some way. D. Strategic resources are those resources that a firm possesses that are valuable and difficult for others to copy. E. All of the above.

E. All of the above.

The SWOT Analysis: a. Stands for strengths, weaknesses, opportunities, and threats. b. Is the 2nd step in the strategic planning process. C. Is also called a "Situation Analysis." D. Is the backbone and basis for a sound strategic plan. E. All of the above.

E. All of the above.

According to Michael Porter, the weaker each of the competitive forces, the more limited companies are in their ability to raise prices and earn greater profits. T/F

False

Creativity is not required in developing effective mission/ vision statements. T/F

False

People who are in functional areas like Accounting or Computer Information Systems aren't involved in developing a firm's business strategy and, therefore, don't need to know as much about it. T/F

False

The best strategy is always a low cost strategy. T/F

False

The first step in the strategic planning process is conducting a SWOT analysis. T/F

False

The justice approach to ethics proposes that actions and plans should be judged by their consequences. T/F

False

The key to long-term sustainability is to match the firm's generic capabilities to its competitors within the same industry. T/F

False

The last step in the strategy planning process is to implement the plan. T/F

False

Their is very little that managers can do to influence or control ethical behavior in their organization. T/F

False

The task environment includes the economic, technological, political-legal, and sociocultural forces. T/F

False It is the societal environment.

Key requirements of a well-written strategic mission statement are:

It should be distinctive and specific to the particular organization. It should capture the emotions of employees and steer them in a common direction. It should be challenging and a bit beyond the company's immediate reach. SHOULD NOT USE GENERIC LANGUAGE THAT IS THE SAME AS THE REST OF THE INDUSTY.

In addition to Porter's five Forces, another force added in the text is

Other stakeholders

Which of the following is not an example of "distinctive competency"?

Price and food taste/ Quality in the Fast Food Industry (this is a key success factor)

A description of what the company is capable of becoming is referred to as

Strategic vision

When conducting a SWOT analysis, Industry analysis is primarily concerned with a corporation's ___________ environment. -Internal -Economic -Societal -Task -Sociocultural

Task environment

A board of directors normally have an obligation to approve decisions that might affect the long-run performance of the corporation. T/F

True

A mission statement should focus on the firm's present business and state what it does (products), where it does business (geographic coverage), and who it serves (target market). T/F

True

An example of a firm using a low cost strategy is Spirit Airlines. T/F

True

Distinctive competency relates to what one firm does well (better than its competitors), whereas a "key success factor" relates to what all firms within an industry SHOULD do well. T/F

True

Hiring and firing at the CEO and top management is one of the five responsibilities of the board of directors.

True

Mercedes-Benz is an example of a differentiation competitive strategy (incorporating differentiating features). T/F

True

One of the benefits of strategic management is a clearer sense of vision for the firm. T/F

True

One of the changes going on in the sociocultural environment of the United States is the changing household composition. T/F

True

One of the main outcomes of a powerful business strategy is a sustainable competitive advantage. T/F

True

One of the potential advantages of having a differentiated (unique) product is that it can help you set up a barrier against competition. T/F

True

Research indicates that when faced with a question of ethics, managers tend to ignore codes of ethics and try to solve their dilemma on their own. T/F

True

Which of the following is the BEST example of a well-written VISION statement? - we empower - we strive - we provide - we develop

We strive to help people around the world eat and live better.

Which of the following is NOT one of the eight sociocultural trends mentioned in the text? a. Less dependence on technology. b. Impact of Generation Y boomlet. c. Increasing environmental awareness. d. Growth of the seniors market. e. Decline of the mass market.

a. Less dependence on technology.

According to the Powerpoint presentation, the strategic actions from a SWOT analysis, in order of priority, are generally as follows: a-Find the products that the firm can produce cheaply first, then develop strategies to defend against critical external threats. b-Correct the important weaknesses first, then develop strategies that match the company's strengths to market opportunities, and lastly, develop strategies to defend against critical external threats. c-Develop strategies to knock other firms out of the marketplace first, then match the company's strengths to market opportunities. d-Develop strategies that match the company's strengths to market opportunities, then correct the important weaknesses, and lastly, develop strategies to defend against critical external threats.

b-Correct the important weaknesses first, then develop strategies that match the company's strengths to market opportunities, and lastly, develop strategies to defend against critical external threats.

A sugar company that is worried that consumers may buy artificial sweetener instead of sugar is concerned about the: a. threat of new entrants. b. threat of substitute products. c. bargaining power of suppliers. d. rivalry among existing firms. e. bargaining power of buyers.

b. threat of substitute products.

Which of the following is NOT a task of the board of directors in strategic management? a. to monitor b. to implement c. to influence d. to evaluate e. to initiate and determine

b. to implement

The main difference between a strategic "vision" versus a "mission" statement is: a. The strategic vision concern's a firm's future business path and the mission focuses on its present business. b. The strategic vision focuses on where the company is going, whereas the mission focuses on who the company is now. c. The vision articulates markets to be pursued whereas the mission articulates current products and service offerings. d. All of the above are differences between the vision and mission statements. e. All but "C" above are differences between the vision and mission statements.

d. All of the above are differences between the vision and mission statements.

The issues priority matrix is used in environmental scanning is composed of two axis or dimensions which are labeled: a. probable industry attractiveness and business strength/competitive position. b. industry growth rate and probable competitive position.importance to the industry and likelihood of occurrence. c. issue importance and relative power of stakeholder groups. d. probability of occurrence and probable impact on the corporation.

d. probability of occurrence and probable impact on the corporation.

Which of the following is NOT descriptive of intense rivalry (competitiveness) among firms? a. low entry barriers b. competitors that are roughly equal in size and power c. slow industry growth d. product offerings that are highly differentiated e. product offerings that are very similar

d. product offerings that are highly differentiated

The T in S.W.O.T. stands for: a. trust b. terminal c. task d. threats e. technical

d. threats

The corporation's "task" environment: a. is an accounting of the many jobs within an organization. b. is an advisory committee to top-management. c. encompasses the physical working areas of the organization. d. includes things like the economy and sociocultural changes. e. includes those elements or groups within an organization's industry.

e. includes those elements or groups within an organization's industry.