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3. What is the cornerstone of effective strategy evaluation? a. Adequate and timely feedback b. Quality and quantity of managers c. Smaller ratio of top- to lower-level management d. Evaluation preceding implementation stage e. Taking corrective actions

a. Adequate and timely feedback

11. What term refers to the need for strategists to examine sets of trends, as well as individual trends in evaluating strategies? a. Consistency b. Consonance c. Synergy d. Feasibility e. Advantage

b. Consonance

46. Which type of auditors are specifically responsible for safeguarding the assets of a company? a. Independent auditors b. Government auditors c. Internal auditors d. External auditors e. Research auditors

c. Internal auditors

15. Strategy-evaluation activities should be performed a. on a periodic basis. b. at the onset of a problem. c. on a continuous basis. d. upon completion of major projects. e. every two years.

c. on a continuous basis.

17. When you discover major changes have occurred in the firm's internal strategic position while conducting strategy evaluation, you should a. continue on the present strategic course. b. immediately discontinue all aspects of the present strategic course. c. take corrective actions. d. add additional funds to the present strategic plan. e. copy the actions of major competitors

c. take corrective actions.

22. What is the basis for quantitative financial evaluation? a. Reduction in costs b. The EPS/EBIT Analysis c. Capital Asset Pricing Model d. Financial ratios e. Present value analysis

d. Financial ratios

45. What term refers to a systematic process of objectively obtaining and evaluating evidence regarding assertions about economic actions and events to ascertain the degree of correspondence between these assertions and established criteria, and communicating the results to interested users? a. Auditing b. Innovation c. R&D d. Strategic Management e. Accounting

a. Auditing

9. A final broad test of strategy is its a. advantage. b. feasibility. c. consonance. d. consistency. e. distinctiveness

b. feasibility

20. Which of the following is not included in measuring organizational performance? a. Comparing results to competitors' expectations. b. Examining progress being made toward meeting stated objectives. c. Investigating deviations from plans. d. Evaluating individual performance. e. Comparing expected results to actual results.

a. Comparing results to competitors' expectations.

30. What is the best way to overcome individuals' resistance to change in strategy evaluation? a. Participation b. Command-and-control c. Laissez-faire system d. Rational argument e. Emotional reactions

a. Participation

7. Which of the following is not a reason for the increasing difficulty of evaluating strategies? a. Product life cycles are longer today than ever. b. Domestic and world economies are less stable than ever. c. Product development cycles are longer than ever. d. Technological advancement is more rapid. e. Change is occurring more frequently than ever.

a. Product life cycles are longer today than ever.

33. Which of the following is not a component of the Balanced Scorecard? a. Social responsibility b. Financial performance c. Customer knowledge d. Internal business processes e. Learning and growth

a. Social responsibility

38. Controls need to be _________ rather than__________. a. action oriented; information oriented b. cultural; political c. qualitative; quantitative d. measurable; timely e. universal; diverse

a. action oriented; information oriented

31. An organization's ability to adapt successfully to changing circumstances refers to its a. corporate agility. b. future shock. c. dynamism. d. revision power. e. liquidity

a. corporate agility.

5. What is happening to strategy evaluation with the passage of time? a. increasingly difficult b. much simpler c. very convenient d. an unnecessary activity e. less important

a. increasingly difficult

48. Most strategy literature advocates that strategic management is a. more of a science than an art. b. more of an art than a science. c. based on analysis rather than research. d. based on intuition rather than analysis. e. based on creativity rather than intuition.

a. more of a science than an art.

39. The strategy-evaluation process should foster a. mutual understanding. b. implementation. c. corporate culture. d. profit centers. e. contingency plans.

a. mutual understanding.

29. Corrective actions should a. strengthen an organization's competitive position in its industry. b. streamline asset holdings. c. reduce the staff size. d. involve abandoning existing strategies. e. all of the above.

a. strengthen an organization's competitive position in its industry.

18. Changes in the organization's management, marketing, finance/accounting, R&D and CIS strengths and weaknesses should be the focus of a revised a. mission. b. IFE matrix. c. vision. d. EFE matrix. e. EPM matrix.

b. IFE matrix.

50. Which of the following is not a reason why some firms prefer to conduct strategic-planning in secret? a. Dissemination of a firm's strategies may translate into competitive intelligence for rival firms. b. It enhances understanding, commitment and communication within the firm. c. It limits criticism, second-guessing and hindsight. d. Participants in a visible strategy process become more attractive to rival firms, who may lure them away. e. Secrecy limits rival firms from imitating or duplicating the firm's strategies.

b. It enhances understanding, commitment and communication within the firm.

23. Which of these is not a key financial ratio? a. Market share b. Production quality c. Earnings per share d. Asset growth e. Return on equity

b. Production quality

8. What is important because organizations face dynamic environments in which key external and internal factors often change quickly and dramatically? a. Strategy formulation b. Strategy evaluation c. Strategy simplification d. Strategy modification e. Strategy implementation

b. Strategy evaluation

34. What aims to balance long term with short term concerns, financial with non-financial concerns, and internal with external concerns. a. Contingency planning b. The Balanced Scorecard approach c. Taking corrective action d. Measuring performance e. reviewing Bases of Strategy

b. The Balanced Scorecard approach

2. The purpose of strategy evaluation is to a. increase the budget annually. b. alert management to problems or potential problems. c. make budget changes. d. evaluate employees' performance. e. improve R&D programs.

b. alert management to problems or potential problems.

32. Corrective action should do all of the following except: a. capitalize upon internal strengths. b. avoid external opportunities. c. avoid external threats. d. improve internal weaknesses. e. strengthen an organization's competitive position.

b. avoid external opportunities.

12. In evaluating strategies, which one of Rumelt's criteria for evaluating strategies, refers to the need for strategists to examine sets of trends? a. consistency b. consonance c. feasibility d. advantage e. empowerment

b. consonance

14. When empowered employees are held accountable for and pressured to achieve specific goals and are given wide latitude in their actions to achieve them, there can be a. increased productivity. b. dysfunctional behavior. c. decreased number of complaints. d. decreased turnover. e. increased number of litigations.

b. dysfunctional behavior.

16. Corrective actions are not needed when a. changes have occurred in the firm's internal strategic position. b. external and internal factors have not significantly changed. c. the firm is not progressing satisfactorily toward achieving stated objectives. d. competitive factors are on the rise. e. the industry is slowing down

b. external and internal factors have not significantly changed.

10. Competitive advantage normally is the result of superiority in resources, skills and a. employees. b. position. c. consistency. d. feasibility. e. governance

b. position

44. What permits quick response to change, prevents panic in crisis situations, and makes managers more adaptable. a. Auditing b. Implementing a balanced scorecard c. Contingency planning d. Taking corrective actions e. Measuring performance

c. Contingency planning

19. A revised __________ should indicate how effective a firm's strategies have been in response to key opportunities and threats. a. IFE matrix b. mission c. EFE matrix d. vision e. CPM matrix

c. EFE matrix

28. What occurs when the nature, types and speed of changes overpower an individual's or organization's ability and capacity to adapt? a. Corporate downfall b. Corrective actions c. Future shock d. Corporate agility e. Measuring performance

c. Future shock

37. What is not a characteristic of an effective evaluation system? a. Economical b. Timely c. Information-oriented d. Meaningful e. Provide a true picture of what is happening

c. Information-oriented

26. Most quantitative criteria are geared to objectives rather than objectives. a. top-management; employee b. short-term; annual c. annual; long-term d. environmental; community e. profit; social

c. annual; long-term

21. Ineffectiveness and/or inefficiencies indicate the need for a. layoffs. b. consultants. c. some form of correction action. d. reductions in pay. e. more synergy.

c. some form of correction action.

1. Which of these is/are a basic activity of strategy evaluation? a. Reviewing the underlying internal and external factors that represent the bases of current strategies b. Measuring organizational performance c. Taking corrective actions d. All of the above. e. Both b and c

d. All of the above.

36. Which of these is not a key attribute in Fortune's strategy evaluation research on "America's Most Admired Companies"? a. Quality of management b. Innovation c. Long-term investment value d. Amount of physical resources e. Use of corporate assets

d. Amount of physical resources

42. What activity is defined as having alternative plans that can be put into effect if certain key events do not occur as expected? a. Corporate agility b. Scenario planning c. Strategy evaluation d. Contingency planning e. Forecasting

d. Contingency planning

43. Which of the following statements about contingency plans is not true? a. Contingency plans should be as simple as possible. b. Only high-priority areas require the insurance of contingency plans. c. Contingency plans should be developed for favorable and unfavorable events. d. Develop contingency plans for all contingent events. e. Contingency plans minimize the impact of potential threats.

d. Develop contingency plans for all contingent events.

40. What factor determines the final design of a firm's strategy-evaluation and control system? a. Opportunities b. Threats c. External characteristics d. The organization's characteristics e. The competition's characteristics

d. The organization's characteristics

4. All of these are Richard Rumelt's criteria to evaluate a strategy except: a. advantage. b. consistency. c. feasibility. d. distinctiveness. e. consonance

d. distinctiveness

47. Product design, manufacturing, transportation, customer use, packaging, product disposal and corporate rewards should reflect_______________ considerations to develop constructive relations with employees, consumers, suppliers and distributors. a. profit b. union c. top-management d. environmental e. customer

d. environmental

24. Strategy evaluation is based on a. empirical data. b. qualitative criteria. c. objective data. d. qualitative and quantitative criteria. e. intuition.

d. qualitative and quantitative criteria.

41. Familiarity with local environments usually makes gathering and evaluating information much easier for organizations than for ones. a. non-profit; for-profit b. for-profit; non-profit c. large; small d. small; large e. foreign; domestic

d. small; large

6. All of the following are reasons strategy evaluation is more difficult today except: a. a dramatic increase in the environment's complexity. b. the increasing number of variables. c. the increase in the number of both domestic and world events affecting organizations. d. the decreasing difficulty of predicting the future with accuracy. e. the rapid rate of obsolescence of even the best plans.

d. the decreasing difficulty of predicting the future with accuracy.

27. What corrective actions should a firm take during strategy evaluation? a. Revising the business mission b. Issuing stock c. Revising objectives d. Selling a division e. All of the above

e. All of the above

13. If success for one organizational department means failure for another department, then strategies may be a. synergistic. b. advantageous. c. inconsonant d. failures. e. inconsistent.

e. inconsistent

49. All of the following are reasons to be completely open with the strategy process except: a. managers, employees and other stakeholders can readily contribute to the process. b. investors, creditors and other stakeholders have greater basis for supporting a firm that is open. c. visibility promotes democracy whereas secrecy promotes autocracy. d. participation and openness enhances understanding, commitment and communication within the firm. e. openness limits rival firms from imitating or duplicating the firm's strategies.

e. openness limits rival firms from imitating or duplicating the firm's strategies.

25. Financial ratios are used to compare a firm's performance over different time periods, compare the firm's performance to industry averages, and compare a firm's performance with a. overall business standards. b. the performance of international firms. c. the performance of suppliers. d. non-financial ratios. e. the performance of competitors

e. the performance of competitors

35. In the important publication used to evaluate a firm's strategy, the Fortune 50 includes all of the following except: a. the top retailers. b. the top transportation companies. c. the top utilities. d. the top banks. e. the top hospitals

e. the top hospitals.