Introduction to Management Exam #2 (Ch. 3 - 5)

________ refers to the methods by which strategies are operationalized or executed within the organization; it focuses on the processes through which strategies are achieved.

Strategy implementation

Which of the following strategies will help companies succeed during the growth stage of a product cycle?

Sacrificing product quality

Which of the following is most closely associated with an overall cost leadership strategy?

(wrong) Providing highly efficient customer service that is better than any other competitor.

________ plans have a short-term focus and are relatively narrow in scope.

(wrong) Tactical

The financial plan is made up of a cash budget, an income statement, balance sheets, and a

(wrong) mission statement

Venture capital companies

(wrong) provide management consulting services to small businesses.

______ is a way of approaching business opportunities and challenges.

Strategic management

Which of the following strategies can help companies during the maturity stage of a product life cycle?

Focusing on keeping costs low.

Libra Travels LLC. has a few back-up buses at key locations where the business operates. This is to be prepared in case any of its day-tour buses break down. This is an example of a

contingency plan.

Pursuing a strategy of ________ reduces an organization's dependence on any one of its business activities and thus reduces economic risk.

related diversification

Groupthink:

results in extensive brainstorming.

Graver Bros. Inc. is a company that buys packaged organic grains from local farmers and sells it to supermarkets in large cities. Graver Bros. Inc. operates in the _______ industry.

wholesale

Elaine is an entrepreneur. She has product idea that she really believes in. She is not sure if she should both make the product and sell it directly to customers. Her other options would be to find another firm to build the product or to make it herself but then sell it to other stores which would then sell to the end user. Which of the strategic challenges facing small firms is she currently addressing?

Choosing an industry in which to compete.

_________ strategy is the set of strategic alternatives from which an organization chooses as it manages its operations simultaneously across several industries and several markets.

Corporate-level

Which of the following strategies can help companies survive during the decline stage of the product life cycle?

Developing new products or services.

_______ describes the number of different businesses that an organization is engaged in and the extent to which these businesses are related to one another.

Diversification

Which of the following is an advantage of buying an existing business?

Established supplier relationships

Which of the following disadvantages of group decisions typically results from the group being very cohesive?

Groupthink

Christine, a teacher, notices that the performances of her students on class tests have been declining. While attempting to find a solution to the problem, she thinks of three choices: rewarding students who get good grades, holding class tests more often, or punishing students when they perform poorly in the tests. Which step of the rational decision-making process is Christine in?

Identifying alternatives

According to the BCG matrix, what should a company do with the cash that is generated by cash cows?

Invest it in stars

Which of the following statements is true about the differentiation strategy?

It enables a firm to charge more of its products.

Which of the following statements is true about the decision-making process?

It requires that the nature of a particular situation be defined.

Which of the following statements is true about the administrative model of decision making?

It suggests that managers tend to satisfice when making decisions.

What is one of the five principles of EBM?

Look for risks and drawbacks in recommendations.

Which of the following is one of the factors responsible for the failure of a small business?

Managerial inexperience

In the GE Business Screen matrix, which of the following is a determinant of industry attractiveness?

Market size

Which of the following is an example of identifying a new niche in an established market?

Modifying a computer so that it is usable by untrained persons.

Which of the following is an example of a company that has identified a new market?

NutriMax has introduced its low-fat cookies in Asia.

_________ techniques are methods that diversified organizations use to determine in which businesses to engage and how to manage these businesses to maximize corporate performance.

Portfolio management

Which of the following statements is true in the context of selecting the best alternative?

The decision maker must only stick to completely rational, mathematical analysis while selecting an alternative.

Which of the following is true about a franchise agreement?

The franchise can consult the franchiser for managerial and financial help.

Which of the following is an advantage of a franchising agreement?

The franchisee can easily establish a business with reduced risks.

Which of the following statements is true about small businesses?

The vast majority of small firms are owner-operated.

What label is used by BOTH the BCG Matrix and GE Business Screen to identify a classification of businesses?

Winners

Ryan Tools Company just acquired Coney Tools. The purchase came about because the employees in both the research and development and the production departments at Ryan Tools joined forces to lobby for the purchase of Coney Tools as opposed to other companies. Both departments wanted Coney Tools because of its state-of-the-art research and production facilities. This is an example of _________.

a coalition

It is common in the _________ industry that skilled craftspeople start out working for someone else and then start a small firm so that they can work for themselves.

construction

When Irene wants to buy new laptops for her marketing executives and she has to pick them up from a single brand that is preinstalled with the marketing software that her company needs, she's making a decision under a condition of

certainty.

The process of choosing one alternative from among a set of alternatives is called

decision making.

WexAll Industries has seen demand for its RB37 decrease. In addition, both the number of other companies producing a similar product and total sales of the RB37 have dropped. The RB37 is most likely in the _________ stage of the product life cycle.

decline

Alba Motorbikes is known for its heavyweight motorcycles. The company places emphasis on the quality of the bikes and after-sale service. The brand also enjoys customer loyalty. This scenario described Alba Motorbikes'

distinctive competence.

A(n) _________ is a market in which several large firms compete according to relatively well-defined criteria.

established market

Research suggests that the majority of new businesses

fail within the first few years of founding.

A(n) _________ ________ is any advantage that comes to a firm because it exploits an opportunity before any other firm does.

first-mover advantage

Strategies to slow the entry of competitors are important if an organization is entering an industry during the ________ stage of the product life cycle.

growth

The nominal group decision-making technique:

is used to generate creative and innovative ideas.

A disadvantage of using interacting groups to make decisions is that:

it does not foster understanding between members.

Delta LLC. purchases raw materials such as leather and canvas from suppliers and processes them into finished shoes. Delta LLC. operates in the ________ industry.

manufacturing

Nutrimax Inc. identifies its purpose as "to produce the finest cookies in the world while upholding our principles of promoting good health and maintaining environmental sustainability." This purpose is most likely to be the ________ _________ of Nutrimax.

mission statement

According to the GE Business Screen, a business with a service network and low operating costs is likely to be

more attractive.

During the growth stage of the product life cycle,

more firms begin producing the product.

When managers want to be sure to get innovative and creative ideas, they will often create a(n) ________ group.

nominal group

R&D at Venus Electronics Inc. has created an innovative new device. Management now needs to decide if Venus should launch this device as its next new product. This is an example of a(n) _______ decision.

nonprogrammed

A ________ is the most general form of standing plan that specifies the organization's general response to a designated problem or situation.

policy

In the context of the GE Business Screen, a determinant of an organization's competitive position is:

product quality

A(n) ________ decision is a decision that is relatively structured or recurs with some frequency (or both).

programmed

When the low-indicator light turns red on the frozen drink machine, Karen follows an established set of procedures to refill and reset the machine. In doing so, she's making a(n) _________ decision.

programmed

In a Boston Consulting Group (BCG) matrix, _________ are businesses that have only a small share of a quickly growing market.

question marks

Tina works at a coffee shop. One of the four coffee machines at the coffee shop has not been functioning well; the same machine has broken down twice in two weeks. Now, Tina is looking at the machine and trying to decide if the problem is a bad machine or if people are just using the machine wrong. Tina is currently

recognizing and defining the decision situation.

Johnson recently launched a new electronics store in Fremont. The store sells smartphones, laptops, and mobile accessories from companies like Apple, Samsung, Sony, and Philips. The store operates in the _______ industry.

retail

Lily's boutique sells fashionable clothing for women. It operates in the _______ industry.

retail

During the decline stage of the product life cycle,

sales drop.

The ______ is the component of a strategy that specifies the range of markets in which an organization will compete.

scope

Pet care salons, skin clinics, and day care centers are all examples of businesses operating in the ________ industry.

service

Strategy formulation is the

set of processes for determining the strategies that will be used by an organization.

A(n) _________ is an operational plan that is developed to carry out a course of action that is not likely to be repeated in the future.

single-use plan

A _________ ________ is privately owned by one individual or a group of individuals and has sales and assets that are not adequate enough to meaningfully influence its environment.

small business

In contrast to strategic plans, tactical plans must

specify resources and time frames.

A(n) _________ plan is a general plan outlining decisions about resource allocation, priorities, and action steps necessary to reach the goals set by the top managers.

strategic

A difference between tactical and strategic plans is that

tactical plans have a more concrete focus.

Business-level strategy is

the set of strategic alternatives from which an organization chooses as it manages its operations simultaneously across several industries and several markets.

Managers are most prone to error in a condition of

uncertainty.

When decision makers do not know all the risks associated with each alternative or the likely consequences of each one, they are making decisions in a condition of

uncertainty.

Firms that implement a strategy of _______ operate multiple businesses that are not logically associated with one another.

unrelated diversification

According to the administrative model, decision makers

use incomplete and imperfect information.