MNGT 4725 - Final
In the BCG Matrix, a division with a high relative market share position in a low-growth industry can be described as a
Cash Cow
What type of strategies would you recommend when a firm's SPACE Matrix directional vector has the coordinates (-2, +3)?
Conservative
Which function of management includes all of those activities undertaken to ensure actual operations conform to planned operations?
Controlling
The critiqued mission statements of PepsiCo and Royal Caribbean; both lacked the following component(s).
Customer
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 these is NOT a SPACE Matrix quadrant?
D) Offensive
All of these are Richard Rumelt's criteria to evaluate a strategy EXCEPT
D) distinctiveness.
A change strategy that attempts to convince people that the change is to their personal advantage is
D) rational.
Which of these is a basic activity of strategy evaluation?
E) All of the above
What is NOT one of the basic ways a divisional structure can be organized?
E) By cost
A firm can usually serve two or more market segments with the same strategy.
F
On the x-axis of the IE Matrix, an IFE total weighted score of 2.5 represents a weak internal position.
F
One positive feature of QSPM is that it does not require intuitive judgments and educated assumptions.
F
Shifting focus from general issues to specific issues generally helps strategists gain commitment and achieve desired results.
F
The midpoint on the x-axis of a Boston Consulting Group (BCG) Matrix is typically set at 0.05.
F
The primary sources of capital are known as debt and EPS.
F
There are five component variables in the marketing mix: product, place, promotion, price, and people.
F
When completing the matching stage of the strategy-formulation framework, the SWOT Matrix needs to be completed before the SPACE Matrix.
F
Because activities are organized according to the way work is actually performed, a divisional structure by process is similar to the matrix structure.
False
ESOPs work well even in firms with fluctuating payrolls and profits.
False
Effective strategy formulation can usually guarantee successful strategy implementation.
False
Financial ratios are rarely used as criteria to evaluate strategies.
False
In strategy evaluation, a revised IFE Matrix should indicate how effective a firm's strategies have been in response to key opportunities and threats.
False
The focus of restructuring is changing the way work is actually carried out.
False
The test of an effective evaluation system is its complexity.
False
The work and family issue is strictly a women's issue.
False
With the matrix structure it is common for functional resources to be duplicated.
False
Which of the three finance/accounting decisions concerns determining the best capital structure for the firm and includes examining various methods by which the firm can raise capital?
Financing
What are educated assumptions about future trends and events called?
Forecasts
Amazon's start of rapid delivery services in some U.S. cities is an example of which type of strategy?
Forward integration
What category of ratios measures how effectively a firm can maintain its economic position in the growth of the economy and industry?
Growth
Firms located in which quadrant of the Grand Strategy Matrix are in an excellent strategic position?
I
________ is NOT a basic mission of a competitive intelligence program.
Identifying industry executives who could be hired by the firm
According to I/O theorists, which of the following contributes LEAST to firm's performance?
Internal resources
Which of these is a limitation of QSPM?
It requires intuitive informed judgements
Who are the world's longest-living people?
Japanese
According to Campbell and Yeung, what is/are most likely associated with behavior and the present?
Mission
Which of these is NOT a SPACE Matrix quadrant?
Offensive
Which component of a mission statement addresses the firm's distinctive competence or major competitive advantage?
Self-concept
Where is the largest seaport, in terms of ship container traffic processed annually?
Singapore
Forward integration would be an appropriate strategy for which of the following types of divisions in the Boston Consulting Group (BCG) Matrix
Star
Which of the following is NOT one of the nine recommended components of a mission statement?
Strategies
Culture includes the set of shared values, beliefs, attitudes, customs, norms, rites, rituals, personalities, heroes, and heroines that describe a firm.
T
Market penetration can be classified as either a conservative, aggressive, or competitive strategy when using the Strategic Position and Action Evaluation (SPACE) Matrix.
T
R&D issues include emphasis on product or process improvements.
T
ROne of the steps of the SWOT Matrix is to list the firm's key external opportunities.
T
Segmentation often reveals that large, random fluctuations in demand actually consist of several small, predictable, and manageable patterns.
T
According to Rumelt, consistency and feasibility are largely based on a firm's internal assessment.
True
Recruitment, promotion, and mentoring are ways to alter an organization's culture.
True
When developing an organizational chart, it is not wise to recommend a dual title for just one executive.
True
When the rational type change strategy is successful, strategy implementation can be relatively easy.
True
With a divisional structure by customer, an organization can effectively cater to the requirements of clearly defined customer groups.
True
Which type of statement should be created first and foremost?
Vision
Which question is NOT addressed in an effective mission statement?
What are the updated balances of leading accounts on the firm's balance sheet?
According to Drucker, what is the best time to ask "What do we want to become?" and "What is our business?"?
When the firm is successful
It is predicted that the United States will have no racial or ethnic majorities by the year
2075
In the context of a balance sheet, goodwill represents
A) a premium paid over the book value for an acquisition.
Changing a strategy to fit an existing culture
A) is usually less effective than changing a firm's culture to fit a new strategy.
All of the following are key questions that can reveal internal strengths and weaknesses in the management department EXCEPT
Are the organization's products positioned well against competing products?
International financial reporting standards (IFRS) comprise approximately ________ pages.
B) 5,000
What is the best divisional structure when a few major customers are of paramount importance and many different services are provided to these customers?
B) By customer
In the BCG Matrix, a division with a high relative market share position in a low-growth industry can be described as a
B) Cash Cow
Which of the following is in keeping with the current view of organizational change?
B) Organizational change is a continuous process.
What has been shown to permit quick response to change, prevent panic in crisis situations, and make managers more adaptable?
C) Contingency plans
What portion of the firms going public in 2014 were unprofitable?
D) Nearly three quarters
Which stage in the strategy-formulation framework focuses on generating feasible alternative strategies?
E) Matching
Forward integration would be an appropriate strategy for which of the following types of divisions in the Boston Consulting Group (BCG) Matrix?
E) Star
In 2012, how many Fortune 500 have women CEOs?
E) Twenty-two
A divisional structure by product is most effective when
E) all of the above
Policies
E) all of the above
Yahoo was one of the world's most admired companies, according to Fortune's 2014 evaluation.
False
Websites that sell products directly to consumers are examples of which type of strategy?
Forward integration
When an industry relies heavily on government contracts, which forecasts can be the most important part of an external audit?
Political
What marketing function includes test marketing?
Product/service planning
________ management deals with inputs, transformations, and outputs that vary across industries and markets.
Production/operations
Which best expresses former Colgate CEO Reuben Mark's thoughts on vision?
Pushing one vision globally is essential.
Who should perform an internal audit?
Representative managers and employees from throughout the firm
An EPS/EBIT chart can be constructed to determine the break-even point, where one financing alternative becomes more attractive than another.
T
An area on a perceptual map where there is a cluster of ideal points indicates a market segment.
T
Decisions about an initial public offering are better described as being finance and accounting matters than as marketing matters.
T
In general, the Internet makes market segmentation easier.
T
It is generally not recommended for companies with less than $10 million in sales to go public.
T
When a firm located in Quadrant I of the Grand Strategy Matrix is too heavily committed to a single product, related diversification may be appropriate to reduce the risks associated with a narrow product line.
T
Whenever two firms merge, it becomes especially important to evaluate and consider culture-strategy linkages.
T
Which section of the SWOT Matrix involves matching internal strengths with external opportunities?
The SO cell
Alvin Toffler argues that environments are becoming so dynamic and complex that they threaten people and organizations with future shock, in his thought-provoking books entitled Future Shock and The Third Wave.
True
Annual objectives are key components in the strategic-management process because they dictate how resources will be allocated.
True
Exchanging members of conflicting parties so each can gain an appreciation of the other's point of view exemplifies a confrontation approach.
True
Resistance to change can be considered the single greatest threat to successful strategy implementation.
True
The potential for creative growth in an organization can be limited by
a mission statement that is too specific.
Synergy
all of the above
Effective mission statements can vary in
all of the above (content, length, format, specificity)
The IFE Matrix should be ________ in multidivisional firms.
constructed for each division
A firm's strengths that cannot be easily matched or imitated by competitors are called
distinctive competencies
To perform an external audit, a company first must
gather competitive intelligence and information about external trends.
The United States' population is
getting older and less white.
The act of oversight and direction for an organization is referred to as
governance
Many economists say the current rash of trade constraints will make it ________ for global economic growth.
harder
All stakeholders
have claims and concerns about an organization, but these claims and concerns vary.
When the products being purchased are standard or undifferentiated, it results in ________ bargaining power of consumers.
higher
A weak dollar means
higher exports and lower imports.
Without assumptions, planning would be
impossible.
An effective mission statement should do all of the following EXCEPT
include monetary amounts, numbers, percentages and ratios.
According to McGinnis, a mission statement should be all of the following EXCEPT
it should be broad enough to include all ventures.
The recommended length of an effective mission statement is ________ words.
less than 150
Opportunity analysis is one of the basic functions of
marketing
Empirical indicators are resources that are either rare, hard to imitate, or
not easily substitutable.
The ideal length of a vision statement is
one sentence.
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.
The three all-encompassing internal resource categories used in the Resource-Based View are physical resources, human resources, and
organizational resources.
A(n) ________ with expertise in developing vision and mission statements and with unbiased views, can at times manage the process more effectively than an internal group or committee of managers.
outside facilitator
The Robinson-Patman Act affects a company's
pricing methods
Who does a planning horizon of two to five years apply to?
top-level management
Yum Brands owns
virtually all of its outside-U.S. restaurants.
A total weighted score of ________ in an External Factor Evaluation (EFE) Matrix indicates that an organization is responding in an outstanding way to existing opportunities and threats in its industry.
4.0
The world population is expected to grow to an estimated ________ billion in 2054.
9
Which stage of the strategy-formulation framework includes an IFE Matrix and the Competitive Profile Matrix?
A) Input
________ is a commonly used approach to determine R&D budget allocations.
All of the above
Which group would be classified as stakeholders?
All of the above (Employees, Governments, Suppliers, Creditors)
Which of these is a potential problem associated with using only quantitative criteria for selecting strategies?
B) Different accounting methods can provide different results on many quantitative criteria.
What is the most widely used technique for determining the best combination of debt and stock?
B) Earnings Per Share/Earnings Before Interest and Taxes Analysis
What type of organizational structure promotes specialization of labor and allows rapid decision making?
B) Functional structure
Strategy formulation
B) requires coordination among a few individuals.
R&D employees and managers perform all of the following tasks EXCEPT
C) researching resource availability.
What is the range for a firm's total weighted score in a Competitive Profile Matrix (CPM)?
1 to 4
What is the range for a firm's total weighted score in an External Factor Evaluation Matrix?
1 to 4
What is the cornerstone of effective strategy evaluation?
A) Adequate and timely feedback
Which approach for managing and resolving conflict involves ignoring the problem in hopes that the conflict will resolve itself?
A) Avoidance
What are the three categories of approaches for managing and resolving conflict?
A) Avoidance, defusion, and confrontation
When developing a mission statement, what is needed before people can focus on specific strategy formulation activities?
All of the above (Compromise, Eventual agreement, Negotiation)
Which question(s) is answered in an effective mission statement?
All of the above questions are answered in an effective mission statement. (-Geographically, where does the firm compete? -Are employees a valuable asset of the firm? -Is the firm committed to growth and financial soundness? -Who are the firm's customers?)
The process of developing a vision and mission statement often includes which of these as the first activity?
Asking managers to read selected articles about vision and mission statements
What type of strategies would you recommend when a firm's SPACE Matrix directional vector has the coordinates (-2, +3)?
B) Conservative
What term refers to the need for strategists to examine sets of trends, as well as individual trends, in evaluating strategies?
B) Consonance
________ includes the set of shared values, beliefs, attitudes, customs, norms, rites, rituals, personalities, heroes, and heroines that describe a firm.
B) Culture
Which of the following is NOT a guideline for an effective strategic planning process?
B) It should employ International Financial Reporting Standards (IFRS).
Which board of director's duty falls under the category of control and oversight over management?
C) Select the CEO
Which organizational structure has the disadvantage of ambiguous roles for senior executives?
C) Strategic business unit
Which of the following is NOT true about objectives?
C) They should use terms like "maximize," "minimize," and "as soon as possible."
Most quantitative criteria are geared to ________ objectives rather than to ________ objectives.
C) annual; long-term
Wellness programs
C) are becoming more prevalent as companies realize the benefits to the firm.
Establishing objectives is a
C) decentralized activity.
Conflict in an organization is
C) not always bad.
Strategy-evaluation activities should ideally be performed
C) on a continuous basis.
In 2013, ________ of CEO compensation was directly associated with the performance of the firm, rather than salary.
C) over 50 percent
Which chapter of the bankruptcy code applies to municipalities?
Chapter 9
How many cells are in a SWOT Matrix?
E) Nine
All the methods for determining a business' worth can be grouped into three basic approaches: what a firm earns, what a firm spends, and what a firm will bring in the market.
F
Increased costs are a disadvantage of a good information system.
F
One of the four recommended approaches for determining a firm's worth is to base the analysis on the selling price of a similar company.
F
Horizontal consistency is more important than vertical consistency in developing annual objectives.
False
IFRS standards comprise 25,000 pages, whereas GAAP standards comprise 5,000 pages.
False
In terms of number of employees, restructuring usually involves increasing the size of the firm.
False
A projected financial analysis can be used to forecast the impact of various implementation decisions.
T
An example of a marketing decision is whether or not to limit the share of business done with a single customer.
T
In recent times, which of the following has largely refrained from protectionist measures?
The United States
Which statement is TRUE?
The vision statement should be established before the mission statement.
What is the highest number of strategies that can be examined at one time wit the QSPM?
There is no limit
Most executives believe that some strategic information should remain confidential to top managers.
True
Most large companies have abandoned the functional structure in favor of decentralization.
True
People's anxieties are raised with the thought of change because they fear economic loss, inconvenience, uncertainty, and a break in normal social patterns.
True
Reengineering does not usually affect the organizational structure or chart, nor does it imply job loss or employee layoffs.
True
The most complex of all organizational structures is a matrix structure.
True
There is no one ideal strategy-evaluation system for all organizations.
True
Undesirable conduct such as distorting the records can be a result of overemphasis on achieving objectives.
True
Unlike strategy formulation, strategy implementation varies considerably among different types and sizes of organizations.
True
When attachments to a culture are severed in an organization's attempt to change direction, employees and managers often experience deep feelings of grief.
True
An overly general mission statement that ________ could be dysfunctional.
does not exclude any strategy alternatives
According to Drucker, a business' mission is the foundation for all of the following EXCEPT
employee wage rates.
The general public is especially interested in ________, whereas stockholders are more interested in ________.
social responsibility; profitability
The match an organization makes between its internal resources and skills and the opportunities and risks created by its external factors can be defined as
strategy
Distribution includes
warehousing
How would Hershey's current divisional structure most likely be classified?
A) By geographic area
In low-earning periods, too much ________ in the capital structure of an organization can endanger stockholders' return and jeopardize company survival.
A) debt
For companies located in Quadrant III of the Grand Strategy Matrix, the first strategy recommended is
A) extensive cost and asset reduction.
Successful strategists minimize their own political exposure on issues that are ________ and in circumstances where opposition from major power centers is likely.
A) highly controversial
A divisional structure by geographic area is most appropriate when
A) organizations have similar branch facilities located in widely dispersed areas.
Today, boards of directors are composed mostly of
A) outsiders.
A concern in matching managers with strategy is that jobs have relatively ________ responsibilities, while people are ________ in their personal development.
A) static; dynamic
Which company estimates wellness programs have cumulatively saved the company $250 million on health-care costs in the past decade?
B) Johnson & Johnson
Which variable would be considered part of the "product" element of the marketing mix?
B) Packaging
Which is NOT a required step in perceptual mapping?
B) Serve two segments with the same strategy.
All of the following are true EXCEPT
B) in 2015 the number of LinkedIn users was closer to the number of Facebook users than to the number of Twitter users.
Resistance to change can manifest itself through
E) all of the above
It is most effective to conduct strategy evaluation annually, at the end of the fiscal year.
False
Adequate and timely feedback is critical to effective strategy evaluation.
True
Strategies may be inconsistent if policy problems and issues continue to be brought to the top for resolution.
True
Which basic question should the vision statement answer?
What do we want to become?
Which of these basic questions should a vision statement answer?
What do we want to become?
According to Drucker, which question is synonymous with asking "What is our mission?"?
What is our business?
The first step in the controlling function of management is to
establish performance standards.
The times-interest-earned ratio would be classified as a(n)
leverage ratio.
Selling all of a company's assets, in parts, for their tangible worth is called
liquidation
When a domestic company first begins to export to India, it is an example of
market development
What category of ratios includes return on total assets and return on stockholders' equity?
profitability
A standardized set of behaviors used to manage anxieties is called a
ritual
Mergers and acquisitions are created for all of the following reasons EXCEPT to
shift company profits to the United Stated from countries with low corporate tax rates
Metaphors are
shorthand of words used to capture a vision or to reinforce old or new values.
Any object, act, event, quality, or relation used to convey meaning is known as a
symbol
The Boston Consulting Group (BCG) Matrix is designed specifically to enhance which type of firm's efforts to formulate strategies?
A) Companies with more than one division
Medium-sized firms tend to use which type of structure?
A) Divisional
Which of the following is NOT a current development or trend?
A) Efforts to repeal federal laws currently preventing businesses from using GPS devices to monitor employees
Firms located in which quadrant of the Grand Strategy Matrix are in an excellent strategic position?
A) I
Research suggests that which of the following is one of the best ways to overcome individuals' resistance to change in strategy evaluation?
A) Participation
In the Boston Consulting Group (BCG) Matrix, how would a division with a low relative market share position in a high growth industry be described?
A) Question Mark
What are the two external dimensions of the SPACE Matrix?
A) Stability position and industry position
What tends to become a more attractive financing technique when interest rates are high?
A) Stock issuance
What term is defined as the product of multiplying the weights by the Attractiveness Scores in each row of the QSPM?
A) Total Attractiveness Scores
________ is NOT a major factor that commonly prohibits effective resource allocation.
A) Underprotection of resources
Controls need to be ________ rather than ________.
A) action-oriented; information-oriented
The amount by which retained earnings changes is obtained by subtracting
A) any dividends to be paid for that year from net income
A benefit of using projected balance sheets and income statements is that
A) the impact of various implementation decisions can be forecasted.
What term is used to describe specific guidelines, methods, procedures, rules, forms and administrative practices established to support and encourage work toward stated goals?
B) Policies
What aims to balance long-term with short-term concerns, financial with nonfinancial concerns, and internal with external concerns?
B) The Balanced Scorecard approach
Which strategies aim at improving internal weaknesses by taking advantage of external opportunities?
B) WO
Corrective action should do all of the following EXCEPT
B) avoid external opportunities.
A disagreement between two or more parties on one or more issues is called a(n)
B) conflict.
The primary benefit sought from restructuring is
B) cost reduction.
Restructuring is also referred to as
B) delayering.
Just-in-time describes
B) delivering materials just as they are needed.
Success today
B) is no guarantee of success tomorrow.
Formal statements of organizational philosophy, charters, creeds, materials used for recruitment and selection, and socialization help an organization
B) link culture to strategy.
Competitive advantage normally is the result of superiority in resources, skills, or
B) position.
Evaluating the worth of a firm
B) requires both qualitative and quantitative skills.
With regard to the visible or hidden issue, most executives agree that
B) some strategic information should remain confidential to top managers.
Strategy analysis and choice largely involves making ________ decisions based on ________ information.
B) subjective; objective
All of the following statements regarding the recent trend in Japan of switching from seniority-based pay to performance-based approaches are true EXCEPT
B) the switch is boosting employee morale.
If suppliers are unreliable or too costly, which of these strategies may be appropriate?
Backward integration
Which word or phrase would most be best to use in written objective statements?
C) 10% increase
Which statement is NOT true?
C) Computer vulnerability has nearly been eradicated by recent innovations, and it is now possible to secure and safeguard all corporate communications, files, and business conducted over the Internet.
A revised ________ should indicate how effective a firm's strategies have been in response to key opportunities and threats.
C) EFE Matrix
What change strategy involves giving orders and enforcing those orders?
C) Force
Which organizational structure is the most widely used?
C) Functional
According to author Alvin Toffler, what occurs when the nature, types, and speed of changes overpower an individual's or organization's ability and capacity to adapt?
C) Future shock
If a firm incurs a loss during a particular year, or if the firm paid out more in dividends than it had in net income, what happens to the retained earnings (RE) amount?
C) It decreases.
Why is market segmentation an important variable in the strategy-implementation process?
C) It directly affects marketing mix variables.
Which of the following is a limitation associated with a SWOT Matrix?
C) It is a static assessment in time.
Which of these is true about strategy implementation?
C) It is primarily an operational process.
Which of these is a limitation of QSPM?
C) It requires intuitive informed judgments.
What is the most complex form of organizational structure?
C) Matrix
In preparing projected statements, to project cost of goods sold in the income statement, which of these methods is recommended?
C) Percentage-of-Sales Method
Which of the following variables is NOT directly affected by market segmentation?
C) Process
A firm uses information technology to reconfigure work, jobs, and processes. As a result, cost, quality, service, and speed are improved. What has the firm engaged in?
C) Reengineering
What action involves reconfiguring or redesigning work, jobs, and processes for the purpose of improving cost, quality, service, and speed?
C) Reengineering
The match an organization makes between its internal resources and skills and the opportunities and risks created by its external factors can be defined as
C) strategy.
If you discover during the course of strategy evaluation that major changes have occurred in the firm's internal strategic position, you should
C) take corrective actions.
The Family Farmer Bankruptcy Act of 1986 created which of the major types of bankruptcy?
Chapter 12
Why do changes in company strategy often require changes in the way an organization is structured?
D) All of the above
Which item is included in net worth?
D) All of the above are included in net worth.
Which of the following is NOT a key attribute that serves as one of the evaluative criteria for Fortune's "America's Most Admired Companies"?
D) Amount of physical resources
________ plans can be defined as alternative plans that can be put into effect if certain key events do not occur as expected.
D) Contingency
Which approach for managing and resolving conflict involves playing down differences between conflicting parties, while accentuating similarities and common interests?
D) Defusion
What pay strategy requires employees or departments to establish performance targets, which, if exceeded, result in bonuses for all members?
D) Gain sharing
According to the Grand Strategy Matrix, organizations in which quadrant have a strong competitive position but are in a slow-growth industry?
D) IV
Which of the following is true regarding the design of a firm's strategy-evaluation system?
D) It should be determined based on the unique aspects of a company.
What is a central strategy-implementation technique that allows an organization to examine the expected results of various strategy implementation decisions?
D) Projected financial statement analysis
Which term is best defined as a central management activity that allows for strategy execution?
D) Resource allocation
Aspects of an existing culture that are antagonistic to a proposed strategy should be
D) changed.
All of the following are examples of offerings at companies to promote a corporate wellness culture EXCEPT
D) free health insurance for employees who exercise regularly.
When developing an organizational chart, you should
D) have division presidents report to a chief operating officer.
Subdividing a market into distinct subsets of customers according to their needs and buying habits is known as
D) market segmentation.
Increased education and diversity of the workforce at all levels are reasons why
D) middle-level and lower-level managers, and even non-managers, should be involved in the strategic planning process
Multidimensional scaling is used in
D) perceptual mapping.
All of the following are ways and means for altering an organization's culture EXCEPT
D) retrenchment.
All of the following are reasons strategy evaluation is more difficult today EXCEPT
D) the increasing time span for which planning can be done with any degree of certainty.
Glass ceiling refers to
D) the invisible barrier in many firms that bars women and minorities from top-level management positions.
________ become(s) ________ only when evaluated, filtered, condensed, analyzed, and organized for a specific purpose, problem, individual, or time.
Data; information
What is the first step in the comprehensive strategic-management model?
Developing vision and mission statements
Procter & Gamble's (P&G) sale of many of its brands in order to focus on its core brands is an example of which type of strategy?
Divestiture
Which term refers to selling a division or part of an organization?
Divestiture
Which of the following is NOT a characteristic that describes the most competitive companies in
Divestiture is essential to growth.
Which level of strategy is most likely NOT present in small firms?
Divisional
All of the following utility statements are relevant in developing a mission statement EXCEPT
Do not offer me ideas, emotions, ambience, feelings, and benefits. Offer me things.
Which of the following is NOT a key question that can reveal internal strengths and weaknesses of the marketing department?
Does the firm have good liquidity?
Who is referred to as "the father of modern management"?
Drucker
Which of the following is a corrective action a company might take to correct unfavorable variances?
E) All of the above
Which of the following is a management issue central to strategy implementation?
E) All of the above
Which of these is NOT a rule for using product positioning as a strategy-implementation tool?
E) All of these are rules for using product positioning as a strategy-implementation tool.
Which of these involves comparing a firm against the best firms in the industry on a wide variety of performance-related criteria?
E) Benchmarking
Which approach for managing and resolving conflict involves exchanging members of conflicting parties so that each can gain an appreciation of the other's point of view?
E) Confrontation
Which of these is NOT one of the tests used to determine whether a performance-pay plan will benefit an organization?
E) Does the plan reduce management layers?
Which of the following analytical tools consists of a nine-cell matrix?
E) Internal-External (IE) Matrix
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?
E) Quantitative Strategic Planning Matrix (QSPM)
Which term is primarily concerned with shareholder well-being rather than employee well-being?
E) Restructuring
Considerable time and effort should be devoted to assuring objectives are well conceived because they represent the basis for
E) all of the above
All of the following are reasons to be completely open as opposed to secretive with the strategy process EXCEPT
E) openness limits rival firms from imitating or duplicating the firm's strategies.
Which of the following were NOT mentioned as an example of cultural products?
Emotions
The weights and total weighted scores in a Competitive Profile Matrix (CPM) have the same meaning the weights and total weighted scores in a
External Factor Evaluation (EFE).
Which of these examples of a mission statement focus area does NOT identify the utility of the firm's products to its customers?
ExxonMobil focuses on oil and gas rather than energy.
A firm should pursue defensive strategies if the coordinates of a SPACE directional vector are (+2, +3).
F
As a balance sheet entry, goodwill represents the favor a business has acquired through its environmentally conscious and socially responsible actions.
F
Four common corporate Valuation methods are the Net Worth Method, the Net Income Method, the Gross Income Method, and the Outstanding Shares Method.
F
If the rate of market growth and technical progress is rapid, then in-house R&D is the preferred solution.
F
It is vital that strategists always consider all feasible alternatives that could benefit the firm.
F
Market penetration can be defined as the subdividing of a market into distinct subsets of customers according to needs and buying habits.
F
Matching competition and positioning factors would allow factories to produce desirable levels without extra shifts, overtime, or subcontracting.
F
The effects of the Sarbanes-Oxley Act include increased inflation of financial projections.
F
The first stage of the strategy-formulation framework is the input stage, and it is directly followed by the decision stage.
F
The online community of customers is more expensive to reach than traditional focus groups and surveys.
F
The trend in the United States is toward larger boards of directors, with an average of 18 members being the norm.
F
To be a price leader or a price follower is a decision that may require finance/accounting policies.
F
Too much debt in the capital structure of an organization can endanger stockholders' returns and jeopardize company survival, particularly in periods of high earnings.
F
Total attractiveness scores are defined as the sum of the attractiveness scores in a given column of the QSPM and are computed in the second step of the Quantitative Strategic Planning Matrix (QSPM).
F
Trying to achieve optimal results with an unpopular strategy is always better than achieving satisfactory results with a popular strategy.
F
When additional stock is issued to finance implementation of strategy, the existing stockholders' ownership and control of the enterprise are strengthened.
F
A bottom-up flow of communication is essential for developing bottom-up support.
False
A functional structure can be effective at eliminating short-term and narrow thinking.
False
A rational change strategy means giving orders and enforcing those orders.
False
Avoidance, defusion, and confrontation are the classifications for the various types of conflict that can arise in organizations.
False
Holding a meeting at which conflicting parties present their views and work through their differences is part of the defusion technique of managing conflict.
False
In Japan, performance rather than seniority has traditionally been the key factor in determining pay.
False
In the context of conflict management and resolution, ignoring the problem in the hopes that the conflict will resolve itself is classified as a defusion technique.
False
JIT significantly increases the costs of implementing strategies.
False
Measuring organizational performance requires making changes to reposition a firm competitively for the future.
False
Organizational change today should be viewed as a project or event rather than as a continuous project.
False
Organizations should prepare contingency plans just for unfavorable events.
False
Production processes typically constitute less than 50 percent of a firm's total assets.
False
Public accounting firms usually avoid strategy-evaluation services.
False
Six Sigma is generally equally successful in retail firms and manufacturing firms.
False
Strategies clarify what can and cannot be done in pursuit of an organization's objectives.
False
Strategists should strive to preserve, emphasize, and build upon aspects of an existing culture that are antagonistic to a proposed strategy.
False
Strategy evaluation is becoming increasingly easier with the passage of time, given technological advances.
False
Strategy formulation is the managing of forces during the action, whereas strategy implementation is the positioning of forces before the action.
False
Tasks and activities are grouped together by business function in a divisional organizational structure.
False
The advantage of the educative change strategy is that implementation is quick and relatively easy.
False
The rational change strategy is one that presents information to convince people of the need for change.
False
To enhance effectiveness, R. T. Lenz recommends keeping the strategic management process routine.
False
Well-run organizations are able to completely avoid conflict.
False
When developing an organizational chart, the title president should be reserved for the top executive of the firm.
False
While open-mindedness is generally considered to be a good trait, it endangers effective strategic management.
False
With a divisional structure, it is possible that competition between divisions may become so intense that it leads to improved sharing of ideas and resources for the common good of the firm.
False
________ exemplifies the complexity of relationships among the functional areas of business.
Financial ratio analysis
According to the comprehensive strategic-management model, which step immediately follows the establishment of long-term objectives?
Generating, evaluating, and selecting strategies
What refers to a strategy of seeking ownership of, or increased control over a firm's competitors?
Horizontal integration
Although a firm positioned in Quadrant _____ of the Grand Strategy Matrix is in a growing industry, it is unable to compete effectively and needs to determine why the firm's current approach is ineffective and how to best change to improve competitiveness.
II
Which of the following is the first step in developing an IFE Matrix?
Identifying the organization's strengths and weaknesses
________ ties all business functions together and provides the basis for all managerial decisions.
Information
Which strategy would be effective when the stockholders of a firm can minimize their losses by selling the organization's assets?
Liquidation
What category of ratios measures a firm's ability to meet maturing short-term obligations?
Liquidity
Which of the following is NOT one of the steps involved in constructing a SWOT Matrix?
List the firm's external weaknesses
What principle is based on the belief that the true measure of a really good strategist is the ability to solve problems?
Managing by crisis
Gap's opening of its first five stores in China is an example of which type of strategy?
Market development
According to the Grand Strategy Matrix, which strategy is recommended for a firm with rapid market growth and a strong competitive position?
Market penetration
Which component of a mission statement addresses the basic beliefs, values, aspirations, and ethical priorities of the firm?
Philosophy
What is the essential bridge between the present and the future that increases the likelihood of achieving desired results?
Planning
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)
Which matrix is included in the decision stage of the strategy formulation framework?
Quantitative Strategic Planning Matrix (QSPM)
Which strategy-formulation technique reveals the relative attractiveness of alternative strategies and thus provides an objective basis for selecting specific strategies?
Quantitative Strategic Planning Matrix (QSPM)
Which strategy is effective when new, but unrelated, products could be offered at highly competitive prices?
Related diversification
According to Porter, what is usually the most powerful of the five competitive forces?
Rivalry among competing firms
In recent times, ________ perhaps has instituted the most protectionist measures by raising tariffs on most imports and subsidizing its own exports.
Russia
All of the following are mentioned as places where vision and mission statements can often be found EXCEPT
SEC reports.
What is the term for a historical narrative describing the unique accomplishments of a group and its leaders?
Saga
Which board of director's duty falls under the category of control and oversight over management?
Select the CEO
An organization's present strategies, objectives, vision, and mission, coupled with the external and internal audit information, provide a basis for generating and evaluating feasible alternative strategies.
T
Both the Internal-External (IE) and Boston Consulting Group (BCG) Matrices are called portfolio matrices.
T
Conservative strategies in a SPACE Matrix most often include product development, market development, market penetration, and related diversification.
T
One major R&D approach is to be an innovative imitator of successful products.
T
Perceptual mapping entails developing schematic representations that reflect how your products or services compare to competitors' on dimensions most important to success in the industry.
T
RThe most important determinants of an organization's overall strategic position are considered to be the two internal dimensions, financial position (FP) and competitive position (CP), and the two external dimensions, industry position (IP) and stability position (SP).
T
Relative market share position is given on the x-axis of the Boston Consulting Group (BCG) Matrix.
T
Stars, Question Marks, Cash Cows, and Dogs are the four quadrants exhibited by the Boston Consulting Group (BCG) Matrix.
T
Strengths-opportunities strategies are based on using a firm's internal strengths to take advantage of external opportunities.
T
The BCG Matrix does not reflect whether or not various divisions or their industries are growing over time.
T
The Sarbanes-Oxley Act put an end to the "country-club" atmosphere of most boards and has shifted power from CEOs to directors.
T
The Strengths-Weaknesses-Opportunities-Threats (SWOT) Matrix, the Strategic Position and Action Evaluation (SPACE) Matrix, the Boston Consulting Group (BCG) Matrix, the Internal-External (IE) Matrix, and the Grand Strategy Matrix are included in stage two of the strategy-formulation framework.
T
The cash account is used as the plug figure in projected balance sheets.
T
The major benefit of the Boston Consulting Group (BCG) Matrix is that it draws attention to the cash flow, investment characteristics, and needs of an organization's various divisions.
T
The most common bases for segmenting markets are geographic and demographic.
T
The percentage-of-sales method should be used for projecting the cost of goods sold in the income statements.
T
The pie slice in a BCG Matrix corresponds to the proportion of corporate revenue generated by that business unit.
T
To objectively evaluate feasible alternative strategies identified in Stage 2, the Quantitative Strategic Planning Matrix (QSPM) uses input information derived from Stage 1.
T
In general, what happens to American goods in overseas markets when there is a strong dollar?
They are more expensive.
Which ratio is calculated by dividing profits before interest and taxes by total interest charges?
Times-interest-earned ratio
According to Roger Schroeder, which basic function within production/operations deals with aggregate planning and scheduling?
Transportation
A dual bonus system based on both annual objectives and long-term objectives is becoming common.
True
A force change strategy is plagued by low commitment and high resistance.
True
A frequently used tool in strategy evaluation is the audit.
True
A recent study reports that nearly 90 percent of employers today offer some kind of wellness incentives or prizes to employees who "get healthier."
True
According to Linneman and Chandran, identifying both good and bad events that could jeopardize strategies should be the first step in contingency planning.
True
According to research, participation in strategy-evaluation activities is one of the best ways to overcome resistance to change.
True
Believing it will make it easier for investors to compare firms across countries and make it easier to raise capital globally, most large accounting firms and multinational firms favor the switch from GAAP to IFRS.
True
Besides reducing worker alienation and stimulating productivity, ESOPs allow firms other benefits, such as substantial tax savings.
True
Changing a strategy to fit an existing culture is not as effective as changing a firm's culture to fit a new strategy.
True
Contingency plans should be as simple as possible.
True
Four types of resources that can be used to achieve desired objectives are financial, physical, human, and technological.
True
In developing an organizational chart, avoid having a particular person reporting to more than one person above them in the chain of command.
True
Intuitive judgments are almost always involved in deriving quantitative criteria.
True
It is always easier to say you are going to do something (strategy formulation) than to actually do it (strategy implementation).
True
Medium-sized firms tend to be divisionally structured, whereas large firms tend to use an SBU (strategic business unit) or matrix structure.
True
Policies refer to specific guidelines, methods, procedures, rules, forms, and administrative practices established to support and encourage work toward stated goals.
True
Regardless of the size of the organization, a certain amount of "management by wandering around" at all levels is essential to effective strategy evaluation.
True
Restructuring in many firms has made a manager's job an invisible, thankless role.
True
Restructuring is also called rightsizing.
True
Strategists should strive to create a work environment in which change is recognized as necessary and beneficial so that individuals can more easily adapt to change.
True
Strategy formulation requires coordination among a few individuals, but strategy implementation requires coordination among many.
True
Strategy-evaluation activities must be meaningful, that is, they should specifically relate to a firm's objectives.
True
Taking corrective actions does not necessarily mean that existing strategies will be abandoned, or even that new strategies must be formulated.
True
The Balanced Scorecard approach addresses the question "How satisfied are the firm's customers?"
True
The United States leads the world in promoting women and minorities into mid- and top-level managerial positions in business.
True
When measuring organizational performance, a comparison should be made between expected results and actual results.
True
Which strategies aim at improving internal weaknesses by taking advantage of external opportunities?
WO
Which strategies are defensive tactics directed at reducing internal weaknesses and avoiding external threats?
WT
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.
What question is asked in conjunction with the philosophy component of a mission statement?
What are the basic beliefs, values, aspirations, and ethical priorities of the firm?
All of the following are political, governmental, and legal variables that can represent key opportunities or threats to organizations EXCEPT
population changes by race, age, sex, and level of affluence.
In order to appeal to diverse stakeholders, an effective mission statement should be
reconciliatory.
After a draft mission statement has been developed, it is important to
request modifications, additions, and deletions.
Effective and carefully planned mission statements
require infrequent major changes, but are always subject to revision.
All of the following are basic functions of marketing EXCEPT
value chain analysis
The process whereby a firm determines the costs associated with organizational activities from purchasing raw materials to manufacturing products to marketing those products is called
value chain analysis.
Life-directing attitudes that serve as behavioral guidelines are called
values
Backward integration is effective in all of these cases EXCEPT
when the advantages of stable prices are not particularly important
A good mission statement has
a customer orientation.
When the private equity (PE) firm Clayton, Dubilier & Rice Bridal from the PE firm Leonard Green & Partner LP this is was an example of
a secondary buyout
External audits attempt to identify key variables that offer ________ responses.
actionable
An effective information management system ________ information in such a way that it answers important operating and strategic questions.
all of the above
The purpose of a mission statement is to declare all of these EXCEPT
an annual financial plan.
In the process of developing a mission statement, it is important to involve
as many managers as possible.
All of the following are principles of good organizational governance, as established by BusinessWeek, EXCEPT
at least three directors are current or former company executives
Which ratio would be considered an activity ratio?
average collection period
All stakeholders' claims on an organization ________ pursued with equal emphasis.
cannot be
________, perhaps the most important word in management, is a major component in motivation.
communication
A systematic and ethical process for gathering and analyzing information about the competition's activities and general trends to further a business' own goals is called
competitive intelligence.
All of the following are basic duties of management EXCEPT
consolidating
Selling includes all of these marketing activities EXCEPT
customer analysis
Staffing involves all of these activities EXCEPT
customer analysis
________ can reveal the demographic characteristics of an organization's customers.
customer profiling
The initial step to implementing value chain analysis is
dividing a firm's operations into specific activities or business processes.
Organizational resources include all of the following EXCEPT
employee training
Whenever new firms can easily enter a particular industry, the intensity of competitiveness among firms tends to
increase.
Competition in virtually all industries is
intense.
The ________ decision is the allocation and reallocation of capital and resources to projects, products, assets, and divisions of an organization.
investment
Intensity of competition ________ in lower-return industries.
is highest
In developing a mission statement, arousing emotion
is important.
An effective mission statement does all of the following EXCEPT
it is static in orientation.
As indicated in the strategic-management model, a clear ________ is needed before alternative strategies can be formulated and implemented.
mission statement
The Industrial Organization (I/O) approach to competitive advantage advocates that external factors are ________ internal factors in a firm achieving competitive advantage.
more important than
Which of the following is the process of influencing people to accomplish specific objectives?
motivating
In most industries, the major costs of producing a product or service are incurred within
operations
Which function of management includes areas such as job design, job specification, job analysis, and unity of command?
organizing
Which function of management is concerned with span of control and chain of command?
organizing
Which management function includes breaking tasks into jobs, combining jobs to form departments, and delegating authority?
organizing
When companies are hired by other companies to take over functional operations such as human resources, information systems, payroll, accounting, or customer service, this is called
outsourcing
Which of the following does the text call an up-front investment in success?
planning
One aspect of ads in a recession is that they
take more direct aim at competitors.
The historical trend of people moving from ________ has dramatically slowed.
the Northeast to the Sunbelt
A pasta manufacturer's purchase of some pet food brands is an example of
unrelated diversification
Good mission statements identify the ________ of a firm's products to its customers.
utility