MGSC Exam 1 Chp 1-6
A mission statement should include the following components:
Survival/growth/profitability, philosophy, self-concept, and public image
The strategic-management process represents a(n) ________, ________, and ________ approach for determining an enterprise's future direction.
logical; systematic; objective
In both the BCG and IE Matrices, the size of each circle represents the percentage of _______ contribution of each division, and pie slices reveal the percentage of _____ contributed of each division to the company.
revenues; operating profits
If a company has high customer loyalty (like Harley-Davidson does), what rating would be appropriate for that factor in a SPACE Matrix?
-1 on CP axis
What would be an appropriate SP axis number for Apple Inc.?
-6
An industry can be stable or unstable on SP, yet high or low on IP. The smartphone industry, for instance, would be unstable (_____) on SP yet high-growth on IP, whereas the canned food industry would be stable (_____) on SP yet low-growth on IP.
-6, -2
In an IFE Matrix, the weights of all factors included must add up to ______.
1.0
The weight column in an EFE Matrix must add up to what number?
1.0
The range of total weighted scores in a CPM Matrix is ______.
1.0 to 4.0
The recommended length of a mission statement is fewer than _____ words.
100
In Step 1 of developing an EFE Matrix, how many opportunities and threats should be included in the full and narrow lists, respectively?
100, 20
In an IFE Matrix, how much more important is a weight of 0.16 than a weight of 0.07?
129 percent
The time frame for long-term objectives and strategies should be consistent, usually from ______ to ______ years.
2, 5
In an EFE Matrix, the average total weighted score is:
2.5
How many key external factors should be included in an EFE Matrix?
20
Spending on digital advertising recently surpassed television advertising and is expected to reach nearly ______ billion dollars in 2020.
280
The strategy-formulation analytical framework consists of how many stages and how many matrices?
3 and 9
Regarding the AQCD criteria, strive to include all high quality factors in an external assessment for a firm. A high quality factor will meet ______ of the AQCD criteria; a low quality factor will meet ______ of the AQCD criteria.
3 or 4; 2 or fewer
In an EFE Matrix, how much more important is a rating of 4 than a rating of 3?
33%
In an EFE Matrix, how much more important is a weight of 0.20 than a weight of 0.15?
33%
If a corporation's profits are $120, and its three divisions have $30, $80, and $10 of profits respectively, and equal revenues, what percent is the pie slice in Division 3?
33.3
Any industry whose annual growth in sales exceeds ______ percent could be considered to have rapid growth.
5%
Most practitioners and academicians of strategic management feel that an effective statement should include ______ mission statement components.
9
Secondary buyouts occur when what happens?
A private equity firm buys a firm from another private equity firm
To the extent possible, internal strength/weakness factors should meet the four AQCD criteria. Two of these criteria are _____.
Actionable and comparative
When should a vision statement reveal the type of business in which the firm engages?
Always
The purpose of a mission statement is to declare all of these EXCEPT
An annual financial plan
To survive and prosper, a business must gain and sustain ______ major competitive advantages over rival firms.
At least several
Which of the following statements is FALSE? A. A mission statement needs to be broad to reconcile differences effectively among—and appeal to—an organization's diverse stakeholders. B. Apple Computer's mission statement should open the possibility for diversification by Apple into pesticides. Your answer is correct. C. Excess specificity in a mission statement would limit the potential of creative growth for the organization. D. A good mission statement allows for the generation and consideration of a range of feasible alternative objectives and strategies without unduly stifling management creativity. E. An overly general mission statement that does not exclude any strategy alternatives could be dysfunctional.
B. Apple Computer's mission statement should open the possibility for diversification by Apple into pesticides.
The CEO of LinkedIn is Jeff Weiner, a highly respected corporate leader. What does Weiner say is the most important philosophy of a great leader?
Be clear about the organization's vision.
Which statement FALSE? A. During the process of developing vision and mission statements, some organizations use discussion groups of managers to develop and modify existing statements. B. The process of developing a mission statement should create an "emotional bond" and "sense of mission" between the organization and its employees. C. An outside person with expertise in developing vision and mission statements who has unbiased views should always manage the statement-development process. Your answer is correct. D. Mission statements should include the 9 components. E. Vision statements should pass the 5 out of 5 test.
C. An outside person with expertise in developing vision and mission statements who has unbiased views should always manage the statement-development process.
Which of the following statements is FALSE? A. The ratings in a CPM refer to strengths and weaknesses, where 4 = major strength, 3 = minor strength, 2 = minor weakness, and 1 = major weakness. B. Regarding weights in a CPM or EFE Matrix, be mindful that 0.08 is mathematically 33 percent higher than 0.06, so even small differences can reveal important perceptions regarding the relative importance of various factors. C. You may assign the same rating to firms included in a CPM analysis if the firms are similar on the respective factor. Your answer is correct. D. Critical success factors in a CPM include both internal and external issues; therefore, the ratings refer to strengths and weaknesses, where 4 = major strength, 3 = minor strength, 2 = minor weakness, and 1 = major weakness. E. The weights and total weighted scores in both a CPM and an EFE have the same meaning.
C. You may assign the same rating to firms included in a CPM analysis if the firms are similar on the respective factor.
What are two major types of bankruptcy?
Chapter 7 and Chapter 11
According to Chapter 1, ______ may be the most important word in management.
Communication
An advantage of a strong dollar includes which of the following item(s)?
Companies importing goods have greater buying power because their dollars now go further overseas.
Uber has fewer fixed assets than the typical taxi fleet company. This type of benefit that a company such as Uber has is called a(n)
Competitive advantage
Strategic management is based on the idea that organizations should monitor internal and external trends _____.
Continually
All elements of the strategic planning process can change over time except one element that almost never changes. What is that element?
Core value statement
According to the chapter, a pitfall to watch for and avoid in strategic planning is:
Doing strategic planning only to satisfy accreditation or regulatory requirements
Which statement below is FALSE? A. Successful strategists let weakly supported ideas and proposals die through inaction. B. Successful strategists establish additional hurdles or tests for strongly supported ideas considered unacceptable but not openly opposed. C. Successful strategists keep a low political profile on unacceptable proposals and strive to let most negative decisions come from subordinates or a group consensus. D. Successful strategists commonly have the title chief executive officer or president. Your answer is not correct. E. Successful strategists are generally iridescent.
E. Successful strategists are generally iridescent.
______ is the act of strengthening employees' sense of effectiveness by encouraging them to participate in decision making and to exercise initiative and imagination, and then rewarding them for doing so.
Empowerment
The weights and total weighted scores in a Competitive Profile Matrix (CPM) have the same meaning as the weights and total weighted scores in a(n)
External Factor Evaluation (EFE)
T/F Allocating resources is one of the four basic activities (functions) performed by managers.
False
T/F An objective, logical, systematic, and non-intuitive approach for making major decisions in an organization is a way to describe the strategic-management process.
False
T/F Because a combination strategy bears no risk, many organizations pursue a combination of two or more strategies simultaneously.
False
T/F It is vital that strategists always consider all feasible alternatives that could benefit the firm.
False
T/F Once a firm acquires a competitive advantage, it is usually able to sustain it indefinitely.
False
T/F Once an effective strategy is designed, modification rarely required
False
T/F Strategy changes may be highly ineffective, but not counterproductive, if a supportive culture does not exist.
False
T/F The best approach for strategists is to carefully develop strategic plans themselves and then present them to operating managers to execute.
False
T/F The management function of organizing is included in human resource management.
False
T/F The most effective strategic management is ritualistic, predictable, and formal.
False
________ exemplifies the complexity of relationships among the functional areas of business.
Financial ratio analysis
Panera installing online ordering and delivery from their restaurants is an example of which type of strategy?
Forward integration
The Global Capsule in Chapter 5 says perhaps the best variable to monitor and to use to decide where to begin doing business is what factor?
Gross Domestic Product
________ is NOT a basic mission of a competitive intelligence program.
Identifying industry executives who could be hired by the firm
The bargaining power of consumers can be the most important force affecting competitive advantage. Consumers gain increasing bargaining power under the following circumstance:
If consumers are particularly important to the seller
In developing an IFE Matrix, what is an important guideline?
Include factors that are actionable, quantitative, comparative, and divisional (AQCD) to the extent possible.
External audit is sometimes called
Industry analysis
Which stage of the strategy-formulation framework includes the IFE Matrix?
Input stage
Which of the following is listed in the chapter as a reason often given for poor or no strategic planning in a firm?
Laziness
When an organization has pursued both a retrenchment strategy and a divestiture strategy and neither has been successful, then perhaps the best strategy is ______.
Liquidation
Which of the following is NOT one of the steps involved in constructing a SWOT Matrix?
List the firm's external weaknesses.
The old adage, "If it ain't broke, don't fix it" pertains to which of the following?
Managing by extrapolation
In terms of growing globally by adding new customers, what company does the global Capsule 3 suggest may be the fastest growing company?
Netflix
In developing an IFE Matrix, when can both internal and external factors be included?
Never
Nonprofit organizations are basically just like for-profit companies except for two major differences. What is one of the differences?
Nonprofits do not pay taxes or have shareholders.
______ is the process by which a person determines whether to attempt a task, works out the most effective way of reaching desired objectives, and prepares to overcome unexpected difficulties with adequate resources.
Planning
Guidelines, rules, and procedures established to support implementation efforts are called _____.
Policies
Which best expresses former Colgate CEO Reuben Mark's thoughts on vision?
Pushing one vision globally is essential.
In a BCG Matrix, ______ is defined as the ratio of a division's own market share (or revenues) in a particular industry to the market share (or revenues) held by the largest rival firm in that industry.
Relative market share position
According to Michael Porter, the nature of competitiveness in a given industry can be viewed as a composite of the forces. Which force is usually the most powerful?
Rivalry among competing firms
Which of the following four types of strategies are developed in a SWOT (Strengths-Weaknesses-Opportunities-Threats) Analysis?
SO, WO, ST and WT
In developing a SPACE Matrix, what term (axis) refers to the volatility of profits and revenues for firms in a given industry?
SP
Which statement is a limitation of the SWOT?
SWOT does not show how to achieve a competitive advantage, so it must not be an end in itself.
Target recently joined Best Buy in offering to match online prices of rival retailers. Both companies are seeking to combat ______ by shoppers who check out products in their stores but buy them on rival's websites.
Show rooming
In developing an IFE Matrix, do not allow more than 30 percent of the key factors to be financial ratios. Why?
Since financial ratios are generally the result of many factors, knowing what particular strategies should be considered based on financial ratios is difficult.
The term strategic planning is used synonymously in this text with what other term?
Strategic management
Building four new manufacturing plants in Europe is an example of a(n) ______.
Strategy
_____ is the science of planning and directing large-scale military operations, of maneuvering forces into the most advantageous position prior to actual engagement with the enemy.
Strategy
Because of the success of the iPad and the iPhone, Apple has tremendous brand recognition. Brand recognition is one of Apple's
Strengths
What is a major limitation of the BCG Matrix?
The BCG Matrix does not reflect whether various divisions or their industries are growing over time.
Hobby Lobby CEO David Green says, "The secret to being a great manager is to manage by the book." To what book is he referring?
The bible
Recent research by Rose and Cray examined the strategic-management process and concluded that perhaps the most important "activity" is what?
The feedback loop
An example of an economic variable is "value of the dollar"—which is currently high—compared with the Yen, Euro, and the Australian dollar. The high dollar results in what economic factor(s)?
The high dollar makes U.S. goods more expensive in overseas markets.
According to James Van Horne, the basic activities of finance/accounting consist of three decisions. What are the three?
The investment decision, the financing decision, and the dividend decision
There are four important differences between the BCG Matrix and the IE Matrix. Which statement below is NOT a difference between the two matrices?
The sizes of the circles and pie slices can vary.
A meta-analysis of 20 years of empirical research on mission statements came to what conclusion?
There is a positive relationship between mission statements and measures of financial organizational performance.
Unskilled leaders work out their conflicts in courtrooms and battlefields. Brilliant strategists rarely go to battle or to court. How do they usually achieve their objectives?
Through tactical positioning well in advance of any confrontation.
Which ratio is calculated by dividing profits before interest and taxes by total interest charges?
Times-interest-earned ratio
According to recent research by Cuddy, Fiske, and Glick, what ethics variable(s) is most important in doing business?
Trustworthiness
What source provides excellent online information and advice on approximately 1,700 stocks, more than 90 industries, the stock market, and the economy, including company income statements and balance sheets?
Value Line Investment Survey
Who said, "Perfection is not attainable. But if we chase perfection, we can catch excellence"?
Vince Lombardi, Head Coach Green Bay Packers (1959-67)
Which of the following illustrates the self-concept component of a mission statement?
We are committed to leapfrogging ongoing competition within 1,000 days by unleashing the constructive and creative abilities and energies of each of our employees.
Which of these basic questions should a vision statement answer?
What do we want to become?
Asking the question, ______ is synonymous with asking, "What is our mission?"
What is our business?
According to Drucker, the most important time to ask seriously, "What do we want to become?" and "What is our business?" is ______.
When a company has been successful
What is Rudin's Law?
When a crisis forces choosing among alternatives, most people choose the worst possible one.
According to the model used in this text, what should be answered when developing a strategic plan?
Where are we now, where do we want to go, and how are we going to get there?
In the Boston Consulting Group (BCG) Matrix, which element represents the industry growth rate in sales, measured in percentage terms?
Y-axis
Are the interpretations of the weights in a CPM and EFE Matrix the same?
Yes
In a QSPM analysis, would it ever be appropriate or useful for a company not to include a weight column at all, but rather total the AS columns to determine the relative attractiveness of six strategies?
Yes
In multidivisional organizations, should divisional units perform strategic-management tasks, including the development of their own statement of vision and mission?
Yes
Is the following statement TRUE? A benefit of developing a comprehensive mission statement is that divergent views among managers can be revealed and resolved through the process.
Yes
Strengths and weaknesses can be determined by elements of being rather than performance. For example, ______.
a strength may involve ownership of natural resources
The extent to which a manufacturing plant's output reaches its potential output is called ______, a key strategic variable.
capacity utilization
First mover advantages refers to the benefits a firm may achieve by entering a new market or developing a new product or service prior to rival firms. An advantage of being a first mover is ______.
carving out market share and a position that is easy to defend and costly for rival firms to overtake
In a BCG Matrix, divisions in Quadrant III (lower left) have a high relative market share position but compete in a low-growth industry. They are called ______.
cash cows
______ is the unique way an organization does business. It is the human dimension that creates solidarity and meaning, and it inspires commitment and productivity in an organization when strategy changes are made.
culture
Business analytics is sometimes also called
data mining
A firm can achieve sustained competitive advantage by _____.
effectively formulating, implementing, and evaluating strategies that capitalize on changes in trends and internal capabilities
Gaining ownership or increased control over distributors or retailers is called _____.
forward integration
To perform an external audit, a company first must
gather competitive intelligence and information about external trends.
The fact that Apple has no manufacturing facilities of its own
has enables it to remain financially lean
An excellent source of industry information, including industry profiles and trade statistics for many industries, is provided at what website?
http://globaledge.msu.edu/industries/
The chapter lists six reasons why many mergers and acquisitions fail, including which of the following?
inability to achieve synergy
The ________ decision is the allocation and reallocation of capital and resources to projects, products, assets, and divisions of an organization.
investment
Retrenchment would be an effective strategy when an organization
is plagued by inefficiency, low profitability, poor employee morale and pressure from stockholders to improve performance.
Official business failure calculations include
liquidations and court-mandated receiverships
When a domestic company first begins to export to India, it is an example of
market development.
What strategy seeks to increase market share for present products or services in present markets through greater marketing efforts?
market penetration
Empirical indicators, or characteristics of resources that enable a firm to implement strategies, include ______.
not easily substitutable
A pattern of behavior developed by an organization as it learns to cope with its problems of external adaptation and internal integration, and that has worked well enough to be considered valid and to be taught to new members as the correct way to perceive, think, and feel is called
organizational culture.
According to the chapter, the worst thing strategists can do is to develop strategic plans and then ____.
present the plans to operating managers to execute
The Robinson-Patman Act affects a company's
pricing
The "markets" component of mission statements refers to the_____.
regions in which the company operates
What is the name of the strategy that involves selling off land and buildings to raise needed cash, pruning product lines, closing marginal businesses, closing obsolete factories, automating processes, reducing the number of employees, and instituting expense control systems?
retrenchment
A fundamental strategy-evaluation activity includes_____.
reviewing external and internal factors that are the bases for current strategies, measuring performance, and taking corrective actions
The general public is especially interested in ________, whereas stockholders are more interested in ________.
social responsibility; profitability
VCA is the process whereby a firm determines the value (price minus cost) of each and all activities ______.
that went into producing and marketing a product
In 2018, global data analytics software is expected to reach ______ billion, a ______ percent increase from 2012.
$21.7; 64
Dale McConkey said, "Plans are less important than planning." What does this statement mean?
Communication, understanding, and commitment are vitally important in strategic planning.
Four companies—A, B, C, and D—have revenues of 1, 2, 3, and 4, respectively. Company C develops a BCG Matrix. What would the RMSP be for company C if all four firms have the same net income?
.75
Human resource (HR) management includes activities such as:
Disciplining, promoting, transferring, and demoting
Which of the following statements is TRUE? A. If a firm possesses many highly-weighted strengths, this is likely the result of effective strategies, so higher ratings in general are warranted for strengths. Your answer is correct. B. If a firm possesses many highly-weighted weaknesses, this is likely the result of effective strategies, so higher ratings in general are warranted for weaknesses. C. If a firm possesses many highly-weighted weaknesses, this is likely the result of effective strategies, so higher ratings in general are warranted for both strengths and weaknesses. D. If a firm possesses many highly-weighted weaknesses, this is likely the result of effective strategies, so higher ratings in general are warranted for strengths. E. If a firm possesses many highly-weighted strengths, this is likely the result of effective strategies, so higher ratings in general are warranted for strengths and weaknesses.
A. If a firm possesses many highly-weighted strengths, this is likely the result of effective strategies, so higher ratings in general are warranted for strengths.
Which of the following statements is FALSE? A. Value chain analysis and benchmarking are opposite ways to address the management of resources. This is the correct answer. B. Partnering is not yet taught at most business schools and is often viewed within companies as a financial issue rather than a strategic issue. C. Although evidence is mounting that firms should use partnering as a means for achieving strategies, most U.S. firms in many industries—such as financial services, forest products, metals, and retailing—still operate in a merge or acquire mode to obtain growth. D. In a global market tied together by the Internet, joint ventures, and partnerships, alliances are proving to be a more effective way to enhance corporate growth than mergers and acquisitions. E. Partnering has become a core competency, a strategic issue of high importance.
A. Value chain analysis and benchmarking are opposite ways to address the management of resources.
Which of the following statements is TRUE? A. When assigning weights and ratings in developing an IFE Matrix, focus on a narrow industry perspective. Your answer is correct. B. When assigning weights and ratings in developing an IFE Matrix, focus on all competitors in the industry. C. When assigning weights and ratings in developing and IFE Matrix, focus on a broad industry perspective. D. When assigning weights and ratings in developing an IFE Matrix, focus on a narrow industry perspective for strengths and a broad industry perspective for weaknesses. E. When assigning weights and ratings in developing an IFE Matrix, focus on the top three competitors in the industry.
A. When assigning weights and ratings in developing an IFE Matrix, focus on a narrow industry perspective.
Which of the following statements is TRUE? A. There is no one best mission statement for a particular organization. Your answer is correct. B. Mission statements should not be published for competitors to see. C. Mission statements should be employee-oriented first and foremost and shareholder-oriented secondarily. D. An effective mission statement paves the way for an effective vision statement. E. A single-division organization could have several mission statements for different purposes.
A. There is no one best mission statement for a particular organization.
Aspects of organizational culture listed in Table 4-4 include all but which of the following?
Analyze interest rate trends
A ________ integration strategy is used by firms to gain control or ownership of suppliers.
Backward
If an organization's present suppliers are especially expensive, unreliable, or incapable of meeting the firm's needs for parts, components, assemblies, or raw materials, what strategy is best?
Backward integration
According to Vern McGinnis, a mission statement should do what?
Be limited enough to exclude some ventures and broad enough to allow for creative growth
Which of the following is similar to the actuarial methods used by insurance companies to rate customers by the chance of positive or negative outcomes?
Business analytics
Which of the following statements is TRUE? A. Wild guesses should never be made in formulating strategies, but reasonable assumptions based on available information must oftentimes be made. B. Wild guesses should sometimes be made in formulating strategies, and reasonable assumptions based on available information must sometimes be made. C. Wild guesses should never be made in formulating strategies, but reasonable assumptions based on available information must always be made. Your answer is correct. D. Wild guesses should rarely be made in formulating strategies, but reasonable assumptions based on available information must usually be made. E. Wild guesses oftentimes must be made in formulating strategies, but reasonable assumptions based on available information must always be made.
C. Wild guesses should never be made in formulating strategies, but reasonable assumptions based on available information must always be made.
What characteristic(s) are included among the 5 out of 5 test for vision statements to be exemplary?
Clear and unique
According to Michael Porter, strategies allow organizations to gain competitive advantage from two different bases. What are the bases?
Cost leadership and differentiation
According to Porter, strategies allow organizations to gain competitive advantage from two different bases. What are the bases?
Cost leadership and differentiation
The following excerpt from a mission statement illustrates which of the nine essential components of a mission statement? "We believe our first responsibility is to the doctors, nurses, patients, mothers, and all others who use our products and services."
Customers
Which of the following statements is FALSE? A. Avoid assigning the same rating to firms included in a CPM analysis. B. The ratings in a CPM refer to strengths and weaknesses, where 4 = major strength, 3 = minor strength, 2 = minor weakness, and 1 = major weakness. C. Critical success factors in a CPM include both internal and external issues; therefore, the ratings refer to strengths and weaknesses, where 4 = major strength, 3 = minor strength, 2 = minor weakness, and 1 = major weakness. D. Regarding weights in a CPM or EFE Matrix, be mindful that 0.08 is mathematically 25 percent higher than 0.06, so even small differences can reveal important perceptions regarding the relative importance of various factors. Your answer is correct. E. The weights and total weighted scores in both a CPM and an EFE have the same meaning.
D. Regarding weights in a CPM or EFE Matrix, be mindful that 0.08 is mathematically 25 percent higher than 0.06, so even small differences can reveal important perceptions regarding the relative importance of various factors.
Availability of credit falls under the ________ forces category of external forces.
Organizational
Which of the following statements is TRUE? A. Regardless of the number of key opportunities and threats included in an EFE Matrix, the highest possible total weighted score for an organization is 8.0 and the lowest possible total weighted score is 1.0. B. Regardless of the number of key opportunities and threats included in an EFE Matrix, the highest possible total weighted score for an organization is 10.0 and the lowest possible total weighted score is 0.0. C. Regardless of the number of key opportunities and threats included in an EFE Matrix, the highest possible total weighted score for an organization is 4.0 and the lowest possible total weighted score is 0.0. D. Regardless of the number of key opportunities and threats included in an EFE Matrix, the highest possible total weighted score for an organization is 4.0 and the lowest possible total weighted score is 1.0. Your answer is correct. E. Opportunities and threats can be external or internal.
D. Regardless of the number of key opportunities and threats included in an EFE Matrix, the highest possible total weighted score for an organization is 4.0 and the lowest possible total weighted score is 1.0.
Which of the following statements is FALSE? A. Regarding weights in a CPM or EFE Matrix, be mindful that 0.08 is mathematically 33 percent higher than 0.06, so even small differences can reveal important perceptions regarding the relative importance of various factors. B. The ratings in a CPM refer to strengths and weaknesses, where 4 = major strength, 3 = minor strength, 2 = minor weakness, and 1 = major weakness. C. The weights and total weighted scores in both a CPM and an EFE have the same meaning. D. You may assign the same rating to firms included in a CPM analysis if the firms are similar on the respective factor. Your answer is correct. E. Critical success factors in a CPM include both internal and external issues; therefore, the ratings refer to strengths and weaknesses, where 4 = major strength, 3 = minor strength, 2 = minor weakness, and 1 = major weakness.
D. You may assign the same rating to firms included in a CPM analysis if the firms are similar on the respective factor.
Which statement below is FALSE? A. IFE ratings are company-based whereas weights are industry-based B. Always sequence factors in an IFE Matrix from highest to lowest weight. C. In an IFE Matrix, the number of factors has no effect on the range of total weighted scores because the weights always add up to 1.0. D. The average IFE Matrix score is 2.0. Your answer is correct. E. When a key internal factor is both a strength and a weakness, the factor may be included twice in the IFE Matrix with a weight and rating assigned to each statement
D. The average IFE Matrix score is 2.0.
.Regarding vision statements, which statement below is FALSE? A. Vision statements should be one sentence long. B. Vision statements should do more than identify the product/service a firm offers. C. Vision statements should be written from a customer perspective. D. Vision statements should answer the question "What is our mission?" Your answer is correct. E. Firms should develop a vision statement before a mission statement.
D. Vision statements should answer the question "What is our mission?"
Which of the following activities is included in strategy implementation?
Develop a strategy-supportive culture and create an effective organizational structure.
What is often considered the first step in strategic planning?
Developing a vision statement
What is the first step in the comprehensive strategic-management model?
Developing vision and mission statements
When comparing mission statements of rival firms, perhaps the most important component to examine is what?
Distinctive competence
The largest consumer-products company in the world, Procter & Gamble (P&G), is in the process of selling more than half of its brands (nearly 100) in order to focus on its core brands (about 80). What is this strategy called?
Divestiture
Which statement below is FALSE? A. Dividends are sometimes paid out even if the funds could be better reinvested in the business, and/or even if the firm has to obtain outside sources of capital to pay for the dividends. B. Dividends are sometimes paid out even when the firm has incurred a negative annual net income. C. The benefits of paying dividends to investors must be balanced against the benefits of internally retaining funds, and there is no set formula on how to balance this trade-off. D. Companies today are aggressively boosting their dividends paid to shareholders. E. Companies should pay dividends regardless of changes in their revenue.
E. Companies should pay dividends regardless of changes in their revenue.
Which statement below is FALSE? A. There is no limit to the number of strategies that can be evaluated or the number of sets of strategies that can be examined at once using the QSPM. B. The magnitude of the difference between the STAS in a given set of QSPM strategic alternatives indicates the relative desirability of one strategy over another. C. Work row by row in developing a QSPM. D. The QSPM weights are identical to those in the EFE Matrix and IFE Matrix. E. In a QSPM, the range for Total Attractiveness Scores is 1=not attractive, 2=somewhat attractive, 3=reasonably attractive, and 4=highly attractive.
E. In a QSPM, the range for Total Attractiveness Scores is 1=not attractive, 2=somewhat attractive, 3=reasonably attractive, and 4=highly attractive.
Which of the following statements is TRUE? A. When one firm receives a 3.20 overall rating and another receives a 2.80 in a CPM, it follows that the first firm is precisely 14.3% better than the second. B. Just because one firm receives a 3.20 overall rating and another receives a 2.80 in a CPM, it follows that the first firm is precisely 12.5% better than the second, and that the first firm is better in some areas. C. Just because one firm receives a 3.20 overall rating and another receives a 2.80 in a CPM, it does not necessarily follow that the first firm is precisely 14.3% better than the second, but it does suggest that the first firm is much better in many areas. D. Just because one firm receives a 3.20 overall rating and another receives a 2.80 in a CPM, it does not necessarily follow that the first firm is precisely 12.5% better than the second, but it does suggest that the first firm is better in some areas. E. Just because one firm receives a 3.20 overall rating and another receives a 2.80 in a CPM, it does not necessarily follow that the first firm is precisely 14.3% better than the second, but it does suggest that the first firm is better in some areas.
E. Just because one firm receives a 3.20 overall rating and another receives a 2.80 in a CPM, it does not necessarily follow that the first firm is precisely 14.3% better than the second, but it does suggest that the first firm is better in some areas.
Which statement below is FALSE? A. In a QSPM, never assign duplicate AS scores across a row. B. If you have more than one strategy in the QSPM, then let the AS scores range from 1 to "the number of strategies being compared." C. In a QSPM, if you assign an AS score to one strategy, then assign an AS score(s) to the other; in other words, if one strategy receives a dash, then all others must receive a dash in a given row. D. In a QSPM, an AS value of 4 is 33 percent more important than a 3. E. QSPM analysis should be performed after EPS/EBIT analysis.
E. QSPM analysis should be performed after EPS/EBIT analysis.
Which statement below is FALSE? A. Successful strategists do a lot of chatting and informal questioning to stay abreast of how things are progressing and to know when to intervene. B. Successful strategists lead strategy but do not dictate it. They give few orders, announce few decisions, depend heavily on informal questioning, and probe and clarify until a consensus emerges. C. Successful strategists ensure that all major power bases within an organization are represented in, or have access to, top management. D. Successful strategists may be small business owners or college presidents. E. Successful strategists are commonly difficult to get along with in social settings.
E. Successful strategists are commonly difficult to get along with in social settings.
Which of the following statements is FALSE? The resource-based view (RBV) approach to competitive advantage contends that internal resources are more important for a firm than external factors in achieving and sustaining competitive advantage. B. In contrast to the Industrial Organization (I/O) theory presented in the previous chapter, proponents of the RBV view/theory contend that organizational performance is primarily determined by internal resources. C. Resource-based view theory asserts that resources are actually what helps a firm exploit opportunities and neutralize threats. D. Empirical research by Neffke reveals that more than any other variable in the firm's value chain, it is the nature of a firm's human capital that impacts that firm's choice of diversification targets. Specifically, firms select acquisition targets that offer opportunities to leverage existing human resources. E. The resource-based view (RBV) approach to competitive advantage contends that internal resources are equally important for a firm as external factors in achieving and sustaining competitive advantage.
E. . The resource-based view (RBV) approach to competitive advantage contends that internal resources are equally important for a firm as external factors in achieving and sustaining competitive advantage.
Which statement is FALSE? A. Some companies develop mission statements simply because owners or top management believe it is fashionable to do so rather than out of any real commitment. B. Some strategists spend almost every moment of every day on administrative and tactical concerns, ignoring the importance of a clear mission. C. Managers at Johnson & Johnson (J&J) meet regularly with employees to review, reword, and reaffirm the firm's vision and mission. D. Firms establish their vision and mission before their objectives in doing strategic planning. E. Vision statements are more important than mission statements.
E. Vision statements are more important than mission statements.
Limitations of financial ratio analysis include all but which one of the following statements?
Financial ratios are estimates of financial condition.
Intensity of competition ________ in lower-return industries.
Is highest
______ is a popular strategy that occurs when two or more companies form a temporary partnership or consortium for the purpose of capitalizing on some opportunity.
Joint venture
Which of the following is the last step in developing an IFE Matrix?
Obtain total weighted score
Lorsch found that executives in successful companies are emotionally committed to the firm's culture, but he concluded that culture can inhibit strategic management in the following way:
Managers frequently miss the significance of changing external conditions because they are blinded by strongly held beliefs.
Going clockwise beginning with the top axis, what are the four axes of a SPACE Matrix?
FP, IP, SP, and CP
External forces can be divided into five broad categories and ten subareas EXCEPT in which of the following?
Marketing
The basic activities that comprise marketing include the following:
Marketing research and target market analysis
Which of the following best describes the vision, "To become the best retailing firm in the USA"?
Much too broad
Does including the word "customer" in a mission statement ensure the statement includes the customer component?
No
The Industrial Organization view of strategic planning advocates that external (industry) factors are more important than internal ones for gaining and sustaining competitive advantage. Do the authors agree?
No. Matching key external opportunities and threats with key internal strengths and weaknesses provides the basis for successful strategy formulation.
If included in a mission statement, the phrase, "We follow the golden rule in all that we do" would satisfy what component?
Philosophy
Which component of a mission statement addresses the basic beliefs, values, aspirations, and ethical priorities of the firm?
Philosophy
According to Michael Porter, the nature of competitiveness in a given industry includes what force?
Potential development of substitute products and bargaining power of consumers
Why are both profit and vision needed to motivate a workforce effectively?
Profit is viewed negatively by some stakeholders of a firm.
The ______ Matrix determines the relative attractiveness of various strategies based on the extent that key external and internal factors are capitalized on or improved.
QSPM
Which analytical tool determines the relative attractiveness of various strategies based on the extent to which key external and internal critical success factors are capitalized upon or improved?
Quantitative Strategic Planning Matrix (QSPM)
The AQCD test refers to the need for key external factors to exhibit what attributes?
Quantitative and divisional
Objectives should include which of the following characteristics?
Measurable, challenging, and hierarchical
What are the four basic activities that comprise management?
Planning, organizing, motivating, and controlling
What are the four types of strategies generated by a SWOT analysis?
SO, WO, ST, and WT
What strategy may be best under the following conditions? • The organization competes in a highly competitive or a no-growth industry, as indicated by low industry profit margins and returns. • The organization's present channels of distribution can be used to market new products to current customers. • New products have countercyclical sales patterns compared with an organization's present products. • The organization's basic industry is experiencing declining annual sales and profits.
Unrelated diversification
King and Cleland recommend that organizations carefully develop a written mission statement in order to reap which benefit?
To provide a basis for the allocation of resources
Generally, in war, the best policy is to take a state intact rather than to ruin it. Likewise, the best objective is to capture the enemy's army, regiment, company, or squad intact rather than destroy them. Winning 100 victories in 100 battles is not the epitome of skill. What is the epitome of skill?
To subdue the enemy without fighting
The two general types of diversification strategies are related diversification and unrelated diversification. When are businesses said to be related?
When their value chains possess competitively valuable cross-business strategic fits
What type of strategy aims to target a new market where competition is not yet present instead of going where many firms are already competing on price and the gains of one firm are often at the expense of another?
blue ocean
When a core competence evolves into a major competitive advantage, what is it called?
distinctive competence
Strengths that cannot be easily matched or imitated by competitors are called ______.
distinctive competencies
When an organization splits into two or more parts, this type of strategy is a _____.
divestiture
Which term refers to selling a division or part of an organization?
divestiture
