MGMT 300- Chapter 7 & 8 Adaptive Test Questions

Which of the following statements about thinking strategically is true?

Strategic thinking requires seeing both the organization and the competitive environment: requires seeing how the organization and the competitive environment fit toge

KalpTree Energy is a company admired for its innovative technology that revolutionizes existing products and creates new products. In which of the following categories of a SWOT analysis would this characteristic appear?

Strengths - A company's innovative technology is considered a strength within SWOT analysis.

Which of the following statements about a star is true?

It has additional growth potential, and profits should be plowed into this business as investment for future growth and profits.

The benefits of management by objectives (MBO) include all of the following EXCEPT:

- MBO emphasizes methods and processes rather than goal achievement. - MBO improves employee motivation, aligns individual and departmental goals with company goals, and can improve performance at all company levels. MBM is an approach that focuses attention on the methods and processes used to achieve goals.

In a turbulent environment, a manager will generally find that planning:

All of these answers are correct. - On the benefit side, planning provides specific targets and a guide toward action; on the limitation side, planning can reduce flexibility and create a false sense of security.

Ellis specifies the resource allocations, schedules, tasks, and other actions necessary for the organization to succeed. Ellis has prepared:

All of these answers are correct. - Tactical and operational plans focus on the major actions as well as specific procedures needed to fulfill the strategic plan.

An organization must make sure that recruiting, selecting, training, compensating, transferring, promoting, and laying off employees are aligned with its strategy to achieve its strategic goals. These activities are part of which of the following primary tools that managers use to implement strategy effectively?

Appropriate HR practices. - To achieve strategic goals, managers make sure that HR practices of recruiting, selecting, training, compensating, transferring, promoting, and laying off employees are aligned with the strategy.

Which of the following is NOT one of the main categories of the overall planning process?

Assess stakeholder perspective - The overall planning process begins when managers (1) develop the overall plan for the organization, (2) translate the plan into action, (3) devise operational goals and plans, (4) execute the plan, and finally (5) periodically review plans.

The stuffed animals division of a toy manufacturer has only a small share of a slow-growth market, which provides little profit for the corporation. Where would this business fit in the BCG matrix?

Dog- is a poor performer, with only a small share of a slow-growth market

An organization expresses the desired future circumstance or condition it will attempt to realize as a:

Goal: desired future circumstance or condition that an organization attempts to realize.

Which of the following statements about an organization's mission is NOT true?

Having a clear mission is not a defining attribute of successful companies. - One of the defining attributes of successful companies is that they have a clear mission that guides decisions and actions.

In making choices about how to position her organization in the environment with respect to rival companies, as a top-level manager, Casey would most likely ask all of the following questions EXCEPT:

How can we change our environment so that it better fits with our goals for the organization?

After studying a number of business organizations, _____ proposed that business-level strategies are the result of understanding competitive forces in the company's environment.

Michael E. Porter

Which of the following levels in the organizational hierarchy is typically responsible for turning strategic plans into tactical plans?

Middle managers - Normally, it is the middle manager's job to take the broad strategic plan and identify specific tactical plans.

At Patagonia's Web site, this statement is posted. "Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis." This is an example of a well-designed:

Mission statement: a broadly stated definition of purpose that distinguishes the organization from others of a similar type.

In a SWOT analysis, Whitney discovers that a number of research and development experts who worked for a competitor are now without a job because that competitor went out of business. The potential to hire these individuals would be placed in which of the following categories of the SWOT analysis?

Opportunities - The acquisition of fresh talent or new management is seen as an opportunity within SWOT analysis.

For Haven, the strategic management process begins with an evaluation of the current mission and goals and it ends with execution of that strategy with the organization. What steps need to occur, in order, in this process between initial evaluation and execution of the strategy?

Perform SWOT analysis, define new mission and goals, and formulate strategy. - The strategic management process follows several steps in this order: evaluate current mission and goals, perform SWOT analysis, define new mission and goals, formulate strategy, and execute strategy.

The management scholar who first described the management by objectives (MBO) system is:

Peter Drucker.

Which of the following is found among the actual benefits of planning and its generally positive effects on a company's performance?

Planning can reduce uncertainty for employees and clarify what they should accomplish.

Loreto is conducting a SWOT analysis. In order to obtain information about opportunities and threats from the external environment, which of the following sources would Loreto use?

Professional journals - Information about opportunities and threats can be obtained from a variety of sources, including customers, government reports, professional journals, suppliers, bankers, friends in other organizations, consultants, and association meetings.

Which of the following is NOT included among the three approaches managers can use to help their planning in a turbulent environment?

Strategy mapping - Three approaches that help brace the organization for the unexpected events of a turbulent environment are contingency planning, scenario building, and crisis planning

Managers who engage in scenario planning are most likely to ask which of the following questions?

What if? - scenario thinking can give managers a head start on asking "What if . . .?" and lead to increased understanding even before any scenarios are written.

The accounts of several online customers of a small state bank were hacked and their account information stolen. The bank, because of its _____, proactively contacted all customers after freezing access to the accounts and offered them an alternative hotline to restore secure access to those accounts.

crisis prevention- involves activities that managers undertake to try to prevent crises and to detect warning signs of potential crises.

Emery's company is involved in an intensely competitive market. The company's strategy involves ways to maintain and enhance customer loyalty, which is beneficial in fighting off the threat of substitute products. Emery's company follows a:

differentiation strategy. - involves an attempt to distinguish the firm's products or services from others in the industry.

Some businesses handle corporate-level strategy by moving into new lines of business as a way to expand the firm's business operations to produce new kinds of valuable products and services. This approach is known as a:

diversification strategy- moving into new lines of business

In setting goals for the department, Kevyn wants to be able assess what is important to the organization and how well the organization is progressing toward attaining its strategic goals. To do so, Kevyn would select a few carefully chosen goals with clear measures of success, also referred to as:

key performance indicators. - A few carefully chosen goals with clear measures of success that focus organizational attention, energy, and resources more powerfully

In order for operational goals to be effective, they:

need to be linked directly with rewards. - Goals should be linked to rewards. The ultimate impact of goals depends on the extent to which salary increases, promotions, and awards are based on goal achievement.

Most multinational companies want to achieve some degree of global standardization to hold costs down, therefore:

products typically require some tailoring to fit consumer preferences. - Although most multinational companies want to achieve some degree of global standardization to hold costs down, products typically require some tailoring to fit consumer preferences

In the BCG matrix, balancing the portfolio offers a number of options. For example, a corporation can invest the cash earned from cash cows in _____ with the goal of nurturing them into future stars.

question marks - the question mark business is risky: It could become a star, or it could fail. The corporation can invest the cash earned from cash cows in question marks with the goal of nurturing them into future stars.

To achieve competitive advantage, companies develop strategies that incorporate all of the following elements EXCEPT:

reduce synergy. - target specific customers, focus on core competencies, provide synergy, and create value.

Scenario planning involves:

rehearsing a framework within which future events can be managed.

Before an existing organization defines a new mission, goals, and strategies, it would engage in all of the following activities EXCEPT:

scan the internal environment and identify opportunities and threats.

In organizations, goals are defined by an individual or group. In other words, they are:

socially constructed: defined by an individual or group

Adrian is outlining the process for quarterly employee performance reviews. This situation is an example of a:

standing plan: ongoing plans that provide guidance for tasks or situations that occur repeatedly within the organization.

The final step in the strategic management process is:

strategy execution.

Managers may use persuasion, new equipment, changes in organization structure, or a revised reward system, also known as _____, to ensure that employees and resources are used to make a formulated strategy a reality.

strategy execution: the use of managerial and organizational tools to direct resources toward accomplishing strategic results.

In order to achieve competitive advantage through strategy, managers can use geography, demographics, or interests to:

target customers. - by defining the customer and customer needs to be served by the company.

The key areas of a strategy map might include learning and growth, internal processes, customer service, and financial performance goals. Such a map would likely show:

that achieving learning and growth goals will help the organization build internal business processes.

In a SWOT analysis, strengths and weaknesses are an evaluation of _____, whereas opportunities and threats are an evaluation of _____.

the internal environment; the external environment

Organizations can be disrupted by any number of events. With scenario planning, managers mentally rehearse different scenarios based on anticipating the varied changes that could affect the organization. Typically, _____ scenarios are developed for each set of factors.

two to five scenarios - are typically are developed for each set of factors, ranging from the most optimistic to the most pessimistic view.

A McKinsey Quarterly survey found that _____ of executives whose companies had no formal strategic planning process were dissatisfied with the company's development of strategy, compared to only _____ of those at companies that had a formal planning process.

51 percent; 20 percent

What is a BHAG, or big hairy audacious goal

A sizable and inspiring goal that shifts people's thinking: describes any goal that is so big, inspiring, and outside the prevailing paradigm that it hits people in the gut and shifts their thinking.

Joey's spice company contracted with an herb consultant who previously worked for other spice companies. The consultant brings many years of experience to the task of blending herbs for a new line of herbs/spices to increase products for cooking special diets (e.g., gluten-free, low carbs, low fats, etc.). The element contributing to that competitive advantage in this case is:

achieve synergy. - When organizational parts interact to produce a joint effect that is greater than the sum of the parts acting alone, synergy occurs.

In management by objectives (MBO), _____ define the course of action needed to achieve the stated goals and are made for both individuals and departments.

action plans - Made for both individuals and departments, an action plan defines the course of action needed to achieve the stated goals.

In for-profit firms, strategic planning typically pertains to _____, whereas in nonprofit organizations, strategic planning pertains to _____.

competitive actions in the marketplace; events in the external environment

Joey runs a spice company that grows many of its spices and herbs locally and is involved with fair trade markets for imported ingredients in its seasoning mixes. Its local sources and specialty seasonings make the company's products perform well in the market. This distinctive edge is the company's:

competitive advantage. - refers to what sets the organization apart from others and provides it with a distinctive edge for meeting customer or client needs in the marketplace.

As the new safety manager for a manufacturing company, Leigh is identifying important factors in the environment, including new safety features for the equipment, communications protocols, as well as past accidents and responses. Leigh is engaged in:

contingency planning. - define company responses to be taken in the case of emergencies, setbacks, or unexpected conditions.

Alexis manages a research laboratory at a chemicals manufacturer. To carry out their research, employees need to have access to various chemical substances. If these substances are not available, research is interrupted and new products are delayed, affecting company performance. Alexis regularly assesses alternate sources for these substances and ways to keep projects on schedule. These plans are:

contingency plans- company responses to be taken in the case of emergencies, setbacks, or unexpected conditions.

In order to help an organization respond to emergencies, setbacks, or unexpected conditions, managers need to develop:

contingency plans. - define company responses to be taken in the case of emergencies, setbacks, or unexpected conditions.

Planning experts work with managers in major divisions or departments to develop their own goals and plans through:

decentralized planning: experts work with managers in major divisions or departments to develop their own goals and plans.

When the need for global integration is highest, a corporate global strategy should aim toward:

globalization strategy or glocalization strategy. - Globalization strategy is appropriate when the need for national responsiveness is low, whereas glocalization strategy is appropriate when the need for national responsiveness is high, but both are at the top of the matrix where need for global integration is high.

At Petal Nurseries, management makes sure employees have the information and resources they need so that their daily decisions and actions help move the firm in the right direction, toward achieving important goals. This _____ is a key to effective strategy execution.

embeddedness- there is a deep understanding and acceptance of organizational direction and purpose throughout the organization.

The strategic management process begins when executives:

evaluate their current position with respect to mission, goals, and strategies.

A(n) _____ is the plan of action that describes resource allocation and activities for dealing with the environment, achieving a competitive advantage, and attaining the organization's goals.

explicit strategy: the plan of action that describes resource allocation and activities for dealing with the environment, achieving a competitive advantage, and attaining the organization's goals.

At the pharmaceutical company where Jamie manages the research division, superior results from that research division have provided the company with a competitive advantage. The element contributing to that competitive advantage in this case is:

exploit core competence. - represents a competitive advantage because the company acquires expertise that competitors do not have.

Effective companies in a fast-shifting environment are those in which managers take a(n) _____ to planning and goal setting.

flexible approach - The most successful firms are those that take a flexible approach to goals and resource allocation on a regular basis rather than reacting to short-term changes in the environment or market.

Strategy _____ includes the planning and decision making that lead to the establishment of the organization's goals and a specific strategic plan, whereas strategy _____ involves the use of managerial and organizational tools to direct resources toward achieving strategic outcomes.

formulation; execution

In the production department, the management is always looking at potential suppliers to find quality ingredients at the best price. This scenario is an example of a:

functional-level strategy. - pertains to the major functional departments within each business unit, such as manufacturing, marketing, and R&D.

Research indicates that the effect of planning on a company's performance is:

generally positively. - Research indicates that planning generally positively affects a company's performance.

Which of the following goals meets the standards for effective goals?

All models achieve a 10 percent increase in miles per gallon (mpg) ratings within two model years. - Effective goals are specific and measurable, realistic, and sufficiently important with a defined time period.

What management tool are managers using to put strategy into action when they openly and avidly promote their strategic ideas, listen to others and encourage disagreement and debate, and create a culture based on openness and honesty that encourages teamwork and collaboration?

Candid communication - everyone feels free to be open and speak frankly; more people get involved in discussing the strategy so that ideas get debated, adapted, and acted upon more quickly; and effective strategy execution is more likely through candid communication with shareholders, customers, and other stakeholders.

Which of the following is a characteristic of effective goals?

Challenging but realistic - Key performance indicators (KPIs) assess what is important to the organization and how well the organization is progressing toward attaining its strategic goal. Managers should set goals that are challenging but realistic.

Which of the following individuals would be responsible for articulating an organization's tactical goals and plans?

Emerson, the foreign operations division manager - Tactical goals and plans help top managers implement their overall strategic plan. As the foreign operations division manager, Emerson would be most concerned with the organization's tactical plans.

Which of the following statements about scenario building is true?

Scenarios are meant to expand the range of future possibilities managers should consider and prepare for.

Which of the following would be specified within operational plans?

Schedules - Operational planning specifies plans—including schedules and budgets—for department managers, supervisors, and individual employees.

_____ are developed to achieve a set of goals that are not likely to be repeated in the future.

Single-use plans

Murphy manages the agriculture chemicals division of a large organization. In addition to a unique product line, it also has its own mission, competitors, and markets relative to other units of the same organization. This division is known as a:

Strategic business unit: a division of the organization that has a unique business, mission, product or service line, competitors, and markets relative to other units of the same organization.'

Which of the following generally has a longer time line than tactical plans?

Strategic plans - tends to be long term and may define organizational action steps, Tactical plans typically have a shorter time horizon than strategic plans.

Which of the following statements about strategy execution within the strategic management process is true?

The biggest barriers to strategy execution are related to the inability of people to adopt new behaviors rather than the lack of resources or planning.

Companies that choose to use a multidomestic approach do so for a number of reasons. Which of the following would NOT be one of those reasons?

The theory is that people everywhere want to buy the same products and live the same way. Unlike with a multidomestic strategy, the globalization approach is based on the assumption that a single global market exists for many consumer and industrial products.

Amal is in the process of defining contingency plans and scenarios so that top management can apply flexible goal setting as necessary. This task falls within which of the following portions of the overall organizational planning process?

Translate the plan - includes formulating contingency and scenario plans and applying flexible goal setting.

Most of the employees at a custom furniture manufacturing company are 50 years old or older. As a consequence, the managers frequently encounter resistance to updating methods or equipment. The employees' resistance to change would be placed in which of the following categories of the SWOT analysis?

Weaknesses - Resistance to change on the part of employees is seen as a weakness within SWOT analysis

As a manager in a high-tech and fast-moving industry, Cameron is a big advocate of planning. Under which of the following situations might Cameron find that planning is NOT helpful?

When an employee suggested shifting some workers from one project to another, which would allow both projects to be finished by their due dates and avoid the need for overtime, Cameron decided not to shift any employees. Ideas from employees do not fit with predetermined action plans. - Goals and plans are a guide to action, but success often comes from creativity and intuition, which can be hampered by too much routine planning.

Which of the following statements best describes a global strategy?

When an organization chooses a globalization strategy, product design and advertising strategies are standardized throughout the world.

Because planning can reduce uncertainty for employees and clarify what they should accomplish, it is:

a benefit for organizational performance. - Research indicates that planning generally positively affects a company's performance because it provides a source of motivation and commitment.

The planning process begins with:

a formal mission that defines the basic purpose of the organization.

Kyrie wants to keep track of the effectiveness of the company's social media efforts. A good way for Kyrie to do this would be through:

a performance dashboard. - business performance dashboards provide a way for executives to keep track of key performance metrics, such as clicks in relation to targets, number of likes and shares, and percentage of customers responding.

A standing plan that defines a precise series of steps to attain a certain goal is called:

a standard operating procedure: defines a precise series of steps to attain a certain goal.

Strategy formulation includes:

assessing the external environment and internal problems to identify strategic issues and then integrating the results into goals and strategy.

Because the previous company Riley worked for dealt with several crises that eventually caused the company to close, Riley was committed to establishing a crisis management plan at the new company. The key to any crisis management plan is that it:

be a detailed written plan that specifies the steps to be taken. - The crisis management plan (CMP) is a detailed written plan that specifies the steps to be taken, and by whom, if a crisis occurs.

The popularity of its newest personal fitness tracker spurred members of Cass's team to consider developing variations of the tracker. Their concerns about development, advertising, and necessary production facilities fall within the level of:

business-level strategy: pertains to each business unit or product line. Strategic decisions at this level concern the amount of advertising, direction, and extent of R&D; product changes; new-product development; equipment and facilities; and expansion or contraction of product and service lines.

Strategic actions that relate to the acquisition of new businesses; additions or divestments of business units, plants, or product lines; and joint ventures with other corporations in new areas are based on a(n):

corporate-level strategy: pertains to the organization as a whole and the combination of business units and products that make it up.

The goals for the production department have been set at high levels, and as manager of the production department, Aubrey had a difficult time translating those goals into plans. Now, a month later, Aubrey is finding that a number of employees are falsifying the number of defective products in order to meet the goals given them. In this case, planning has:

created too much pressure. - If too much pressure is put on managers and employees to meet overly ambitious goals, they may resort to dysfunctional or unethical behavior in order to meet their targets.

If Regan's company wants to reap efficiencies by standardizing product design and manufacturing, using common suppliers, introducing products around the world faster, coordinating prices, and eliminating overlapping facilities, it should choose a:

globalization strategy: enables companies to save millions of dollars through efficiencies gained by standardizing product design and other production and marketing aspects.

Airbnb has experienced remarkable global success—it now has listings in over 190 countries for host homes in which travelers may stay. The key to its global strategy is making the site accessible around the globe, but pairing it with local flavor and stories. Airbnb truly exemplifies:

glocalization - The goal of a glocalization strategy is a standardized product or service that is combined with some customization for the local culture in which it is sold.

A SWOT analysis of strengths and weaknesses of a petroleum company such as Exxon would include:

management competence and quality. - is an internal characteristic and can be a strength or weakness.

Lennon spends much of each work day managing production and keeping production activities within budget. Lennon is most concerned with the organization's:

operational plans: must be coordinated with the budget because resources must be allocated for desired activities.

Shea's department uses management by objectives (MBO) as its system of performance management. To assess whether both managers and employees are on target with their performance, everyone engages in:

periodic checkups. - An essential step in the MBO process, a periodic progress review is important to ensure that action plans are working.

Of the four management functions, _____ is considered the most fundamental.

planning - Everything else stems from planning.

As Jackie's company moves into its second year of operation, she will review the company goals and revise as necessary as well as specifying the actions to be taken to achieve those goals. Jackie is engaged in the process of:

planning: usually incorporates both ideas of determining the organization's goals and defining the means for achieving them

Research has shown that strategic thinking and planning _____ a firm's performance and financial success.

positively affect: strategic thinking and planning positively affect a firm's performance and financial success.

All the employees in Tenzin's department are engaged in a process to answer the question, "What are we trying to accomplish?" Tenzin and his coworkers are in the _____ step of management by objectives.

setting goals - The first step in the MBO process is setting goals, which involves employees at all levels looking beyond day-to-day activities to answer the question, "What are we trying to accomplish?"

Partners Lupe and Kelly have just written what they believe to be a good mission statement for their company. The goal in writing a mission statement generally includes all of the following EXCEPT to:

specify organizational action steps. - Operational plans are developed at the lower levels of the organization to specify action steps. A well-designed mission statement is a broadly stated definition of purpose that provides the basis for development of all subsequent goals and plans and can enhance employee motivation and organizational performance.

An audit of both internal and external factors that influence the company's ability to compete are part of a SWOT analysis. SWOT is an acronym for:

strengths, weakness, opportunities, and threats.

In SWOT analysis, threats are the characteristics of:

the external environment that may prevent the organization from achieving its strategic goals.

All of the following are ways in which managers scan the environment and identify strengths and weaknesses that may affect an organization's ability to compete EXCEPT:

through government reports. - Company budgets and reports, assessment of human resources, and talking with people throughout the organization are all ways to scan the internal environment, which provides the organization with its strengths and weaknesses.

United Technologies is the parent company for several manufacturing concerns. United Technologies has two divisions: (1) Otis manufactures elevators and escalators and (2) UTC Climate, Controls, & Security deals with air conditioning and refrigeration, fire safety, surveillance, and security. This is an example of:

unrelated diversification. - the company's lines of business aren't logically associated with one another.

Espen manages a modular furniture manufacturer. The organization Espen works for also owns a plastics manufacturer, which makes mostly storage containers. The organization recently purchased a smaller home goods retailer. This purchase takes the organization another step toward greater:

vertical integration: the company expands into businesses that either produce the supplies needed to make products and services or that distribute and sell those products and services to customers.

Lin is about to speak to the members of the department. The company's new strategy means everyone needs to focus on better communication. In the speech, Lin will lay out the highlights of the new plan, explain that she will attend monthly meetings with each of the teams to troubleshoot progress toward the strategy's goals, and provide an open door policy that allows any employee to come to her with suggestions for improving processes. In this way, Lin is using the management tool of:

visible leadership: actively persuade, motivate, and emphasize cultural values that support the new strategy

The company Morgan works for uses management by objectives. Morgan is in the midst of a periodic review to see whether the department is on target with meeting its goals. She finds that employees are not using the safety equipment that was to be implemented as part of the action plan. Her next step is to:

work with employees to take corrective action. - A periodic checkup allows managers and employees to see whether they are on target or whether corrective action is needed.