Strategies Final Quiz Questions

when the advantages of stable prices are not important.

Backward integration is effective in all of these cases EXCEPT

False

Bargaining power of consumers is usually the most powerful of porters five competitive forces

True

Be decreasing time span for which planning can be done with any degree of certainty is a reason strategy evaluation is more difficult today

False

Being long term in nature, strategy implementation affects Tappan middle managers but none of the lower level employees

True

Besides net profit from operations and the sale of assets, the two basic sources of funds for an ongoing enterprise are debt and equity

True

Boards of directors are composed mostly of outsiders who are becoming more involved in an organizations strategic management

True

Both IE and BCG matrixes are called portfolio matrices

False

Buying off the outstanding shares of your company from the open market to make the company private is work going public mean

True

Carefully developed, written mission statements, should ensure unanimity Of purpose within the organization

True

Carefully prepared statements of a vision and mission are widely recognized as the first step in strategic management

False

Changes in the organizations management, marketing, finance, R&D, and CIS Strengths and weaknesses should all be the focus of a revised EFE matrix in strategy evaluation

True

Changing a strategy to fit an existing culture is not as effective as changing a firms culture to fit a new strategy

False

Chapter 13 bankruptcy is similar to chapter 11, but available only to large corporations

Strategy formulation

Collecting and evaluating information on competitors is essential for successful

False

Companies are avoiding outsourcing more and more because it is more expensive than traditional methods and it does not allow a firm to concentrate on core competencies

False

Consistency, distinctiveness, advantage and feasibility are Richard Rumelt's Four criteria for evaluating a strategy

Trur

Contingency plans are alternative plans that can be put into affect if certain key affects do not occur as expected

True

Criteria for evaluating strategy should be measurable and easily verifiable

True

Discretionary income and the demand for discretionary goods declines as interest rates rise

False

Effective strategy formulation can usually guarantee successful strategy implementation

False

Employee wellness cannot be a part of sustainability

False

Environmental changes should not change a mission statement

True

Exchanging members of conflicting parties so that each can gain an appreciation of the others point of you exemplifies a confrontation approach

False

Firms can continue to get away with placing green terminologies on their products and labels because there are still no legal or generally accepted definitions of terms like organic, green, safe or earth friendly

False

Firms should strive to engage in social activities that have no economic benefits, to avoid their being viewed as public relations ploys

True

Firms with planning systems are more closely resembling strategic management theory generally exhibit superior long-term financial performance relative to their industry

True

Five major stakeholders that affect pricing decisions are consumers, governments, suppliers, distributors and competitors

True

Forward integration strategy is especially effective when the availability of quality distributors is so limited as to offer a competitive advantage to those firms that integrate forward

True

Future shock occurs when the typing speed of changes over power an individual or organizations ability and capacity to adapt

True

Good intuitive judgment is always needed to determine appropriate weights and readings in the input stage matrices

True

Hispanics are expected to become a larger minority group in the United States than African-Americans by 2021

False

History has proven that the lower the trust and confidence of people in the ethics of an institution or society, the greater its economic strength

True

Ideally, the rational type change strategy is the most desirable

False

It is OK for firms to create expectations that exceed the service the firm can or will offer if it will attract customers

True

JM Smuckers CO's acquisition of Proctor & Gamble's Folger's coffee business is an example of related diversification

True

Linkages between a firms culture and strategies often to determine success

True

Many people consider it unethical for a firm to be socially irresponsible

False

Market penetration can be defined as the subdividing of a market into distinct subsets of customers according to the needs and buying habits

True

Marketing research is the systematic gathering, recording and analyzing of data about problems relating to the marketing of goods and services

Trus

Measuring organizational performance includes comparing expected results to actual results, investigating deviations from plans, evaluating individual performance and examining progress being made towards meeting stated objectives

True

Mission statements provide managers with a unity of direction that transcends individual, parochial and transitory needs by promoting a sense of shared expectations among all levels and generations of employees

False

Monitoring departmental and corporate performance regarding ethical issues can cause firms to misalign Ethical and strategic decision making

True

More than a statement of specific details, a mission statement is a declaration of attitude and outlook

True

Most large companies have a band in the functional structure in favor of decentralization

False

Most quantitative evaluation criteria are geared to long-term objectives rather than annual objectives

False

Nonprofit organizations have less need for strategic management, as they are not interested in making a profit

True

A clear mission statement describes the values and priorities of an organization

False

A conservative rule of thumb for measuring the value of a firm is to establish a business worth to be 10 times the firms most current annual profit

True

A financial budget is a document that details how funds will be obtained and spent for a specified period of time

True

A good mission statement serves as a framework for evaluating both current and prospective activities

True

A leveraged buyout occurs when a firms management and other private investors using borrowed funds by out the firms shareholders

False

A low value of the dollar means lower exports in higher imports

True

A major effort in R&D may be very risky of technology is changing rapidly and the market is growing slowly

True

A mission statement should be broad enough to reconcile differences among an organizations various stakeholders

True

A mission statement should be limited enough to exclude some ventures and brought enough to allow for creative growth

True

A mission statement, sometimes called a create statement, can be defined as an enduring statement of purpose that distinguishes one organization from other similar enterprises

organizational culture

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

Trur

A projected financial analysis can be used to forecast the impact of various implementation decisions

True

A reason for concern over the dilution of a company stock is a possible hostile takeover

False

A recent Wall Street Journal article reported that 80% of all firms sampled had no restrictions on relationships between a supervisor and subordinate

True

A rising tide of consciousness about the importance of business ethics is sweeping the United States and the rest of the world

True

A strategy of seeking ownership or increase control of a firms suppliers is backward integration

False

A vision statement answers the question, what is our business? Where as a mission statement answers, what do we want to become?

Internal resources

According to I/O theorists, which of the following contributes LEAST to firm's performance?

True

Among the risks that still restrained firms from Initiating business with China are rampant corruption at the absence of a legal system

True

An appropriate strategy when an organization has excess production capacity is market development

False

An external audit focuses on identifying and evaluating trends and events within the control of management

True

An important question in Mission statement should answer is, what is our business?

True

An objective, logical, systematic approach for making major decisions in an organization is a way to describe the strategic management process

True

Analytical and intuitive thinking should complement each other

True

And effective bonus system should be based on two key factors annual objectives and long-term objectives

True

And effective mission statement generate the impression if firm is successful, has direction, and is worthy of time, support, and investment

True

And organizations present strategies, objectives and mission provide a basis for generating and evaluating feasible alternative strategies, coupled with the external and internal audit information

True

Annual objectives Are key components in the strategic management process because they dictate how resources will be allocated

True

Application of the strategic management process is typically more formal and larger and well established organizations

False

Approximately 36% of firms profitability can be explained by the industry, whereas 20% Of the variance and profitability is attribute it to the firms internal factors

True

True or false to exploit and create new and different opportunities for tomorrow are now the purposes of strategic management

True

Union pacific mission statement focuses on transportation rather than on railroads because good mission statements identify the utility of a firms product to its customers

True

Value chain analysis can enable a firm to better identify its own strengths and weaknesses especially as compared to competitors value chain analysis

True

Viewing businesses as star, cash cow, dog or a question mark Is an oversimplification

False

Well conceived and properly executed mission and vision statements do not need to be subject to revision

Mission Statement

What are enduring declarations of purpose that distinguish one business from other similar firms?

planning

What is the essential bridge between the present and the future that increases the likelihood of achieving desired results?

Functional structure

What type of organizational structure promotes specialization of labor and allows rapid decision making?

False

When additional debt is issued to finance implementation of strategy, ownership and control of the enterprise are diluted

True

When developing an organizational chart, it is not wise to recommend a dual title for just one executive

False

Whereas the mission statement answers the question what do we want to become? The vision statement answers the question what is our business?

Discouraging whistle-blowing

Which of the following is NOT a way that companies can help create an ethical culture in their organization?

They should use terms like "maximize," "minimize," and "as soon as possible."

Which of the following is NOT true about objectives?

"Try to serve more than one segment with the same strategy."

Which of these is NOT a rule of thumb when using product positioning as a strategy-implementation tool?

It should be coupled with analysis in decision-making.

Which statement best describes intuition?

False

While it is socially responsible to be a good steward of the natural environment, doing so will not enable a firm to gain competitive advantage

True

Whistleblowing refers to policies that require employees to report any unethical violations they discover or see in the firm

True

White knight is a term that refers to a firm that agrees to acquire another firm when the other firm is facing a hostile takeover by some company

All of the above (Mass production, mass distribution, and mass advertising are not always required, It allows a small firm to compete successfully with a large firm, It allows a firm to operate with limited resources, and Market segmentation decisions directly affect marketing mix variables.)

Why is market segmentation an important variable in strategy implementation?

False

With a divisional structure, it is possible that competition between divisions may become so intense that it leads to improve sharing of ideas and resources for the common good of the firm

True

With information technology, in some cases it is possible to do away with the workplace by allowing employees to work at home or anywhere, anytime

Yrue

With market segmentation, a firm can better operate with limited resources

False

With the matrix structure is common for functional resources to be duplicated

true

Primary responsibility for ensuring ethical behavior rests with middle and lower level managers, since they are in position to influence many employees

True

Product development is an appropriate strategy when an organization has successful products that are in maturity stages of the product life cycle

False

Proponents of the resource-based view argue that external factors are more important than internal factors for a firm in achieving and sustaining competitive advantage

False

Punctuality, in general, is revered in all cultures of the world

Trur

Re-engineering does not usually affect the organizational structure or chart, nor does it imply job loss or employee layoffs

False

Recently and increasing number of companies have been implementing less rigorous environmental policies

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

False

Research shows strategic management in small firms is more formal than in large firms, but large firms that engage in strategic management outperform those that do not

True

Resistance to change can be considered the single greatest threat to successful strategy implementation

False

Return on assets is the most widely used technique for determining whether debt, Stack or a combination of debt and stock is the best alternative for raising capital to implement strategies

Falss

SWOT Matrix is widely used as an organizational tool and, if used appropriately, does not have any significant weaknesses

Trur

Segmentation Often reveals that large, random fluctuations in demand actually consist of several small, predictable, and manageable patterns

True

Shifting focus from specific issues two more general ones may increase strategist options for gaining organizational commitment

False

Small organizations require a more elaborate and detailed strategy evaluation system because they are still evolving

True

Social policy concerns what responsibilities the firm has to employees, consumers, environmentalists, minorities, communities, shareholders, and other groups

False

Social responsibility refers to actions and organization takes that are legally required to protect or enhance the well-being of living things

False

Some strategists Agree with Ralph Nader, who asserts that organizations have no obligation to do anymore for society is legally required

True

Stakeholders affect and are affected by an organization strategic decisions

False

Star, question mark, Cash cow and dogs are the four quadrants exhibited by the space matrix

True

Strategic management is an attempt to organize qualitative and quantitative information in a way that allows effective decisions to be made under conditions of uncertainty

False

Strategic objectives include those associated with growth in revenues, growth in earnings, higher Dividends, larger profit margin's and improved cash flow

False

Strategist in governmental organizations operate with far more strategic autonomy than their counterparts in private firms

False

Strategy change may be highly effective and productive if a supportive culture does not exist

True

Strategy formulation requires coordination among a few individuals, but strategy implementation requires coordination among many

True

Strategy formulation, implementation and evaluation activities occur at three hierarchical Levels and a large diversified organization; corporate, divisional and functional

True

Strategy implementation is often considered to be the most difficult stage in the strategic management process because it requires personal discipline, commitment and sacrifice

True

Strengths and weaknesses are determined relative to competitors

underestimated; overestimated

Strengths of competitors in foreign lands are often ________, and weaknesses are often ________.

False

Strengths opportunities strategies are based on using a firms internal strengths to take advantage of external opportunities and threats

True

Strengths, weaknesses, opportunities and threats should continually be monitored for change because It is not really a question of whether these factors will change but rather when they will change and in what ways

True

Sustainability refers to the extent that an organizations operations and actions protect, mend, and preserve rather than harm or destroy the natural environment

True

The BCG matrix does not reflect whether or not various divisions or their industries are growing overtime

False

The BCG matrix requires more information about the divisions than the IE matrix

True

The IE Matrix can be divided into three major regions that have different strategy implications; grow and build, hold and maintain, and harvest or die best

True

The Internet is changing the very nature of many industries by altering product lifecycles and changing the historical trade off between production standardization and flexibility

False

The basic premise of the research-based view is that the mix, type, amount and nature of a firms internal resources should be considered first and foremost in devising strategies that can lead to sustainable competitive advantage

False

The best thing strategist can do is develop strategic plans themselves and then present them to operating managers to execute

False

The controlling function of management is synonymous to strategy formulation

False

The end of the fiscal year is the best time to do a strategy evaluation

False

The focus of restructuring is changing the way work is actually carried out

True

The foundation for development of a comprehensive mission statement is provided by a clear vision

Trus

The functions of information systems are growing in importance because organizations Are becoming more complex, decentralized and globally disbursed

True

The major overall benefit of the BCG matrix is that it draws attention to the cash flow, investment characteristics and needs of an organizations various divisions

True

The major reason for developing a business mission is to create customers, and one of the most crucial questions into finding a business mission is who is our customer?

True

The most effective differentiation basis are those that are hard or expensive for rivals to duplicate

True

The most important determinants of an organizations overall strategic position are considered to be the two internal Dimensions, financial strength (FS) and competitive advantage (CA), In the 2X ternal dimensions, industry strength (IS) and environmental stability (ES)

True

The next step after segmenting markets so a firm can target particular customer groups is defined out what customer groups one and expect

True

The only certain thing about the future of any organization is change

False

The overall aim of the balance scorecard is the balance financial objectives with strategic objectives

Asking managers to read selected articles about mission statements

The process of developing a vision and mission statement often includes which of these as the first activity?

True

The process of performing an internal audit, compared to the external audit, provides more opportunity for participants to understand how their jobs, departments and divisions fit into the whole organization

True

The process of strategic management is facilitated immensely is if the firms that have an effective information system

Trye

The purpose of matching key factors is to generate feasible alternative strategies

true

The size of the circle in a BCG matrix corresponds to the proportion of corporate revenue generated by that business unit

False

The strategic management process is static in an organization

True

The strategic management process should be completely open because participation and openness and hands understanding commitment and communication within the firm

conceptually the same as; more complex

The strategic-management process for multinational firms is ________ for purely domestic firms, and the process is ________ for international firms.

False

There are four basic types of diversification; concentric, conglomerate, forward and backward

False

There is no need for a mission statement in a small nonprofit organization

True

There is no one ideal strategy evaluation system for all organizations

False

Three areas, according to James Vanhorn, comprise the functions or basic decision areas of finance; the investment decision, the financing decision in the earnings decision

True

To achieve coordinated effort by defining task in authority relations is the purpose of organizing

False

To develop an exhaustive list of every possible factor that could influence the business is the aim of an external audit

True

To perform an external audit, a company first must gather competitive intelligence and information about social, cultural, demographics, environmental, economic, political, legal, governmental and technological trends

True

Today, managers and employees can be found personally liable if they ignore, conceal, or disregard a pollution problem

True

Too much emphasis on evaluating strategies may be expensive and counterproductive

False

Tourism oriented firms in the United States are hampered when the value of the dollar falls

True

the sarbanes-oxley act Put an end to the country club atmosphere of most boards and has shifted power from CEOs to directors

True

According to Michael Porter, five competitive forces create vital opportunities and threats to organizations: 1.) new entrants, 2.) substitute products or services, 3.) bargaining power of suppliers, 4.) bargaining power of buyers and 5.) rivalry among existing firms

True

According to Porter, strategies allow organizations to gain competitive advantage from three different bases; cost leadership, differentiation and integration

True

According to research, participation in strategy evaluation activities as one of the best ways to overcome individuals resistance to change

True

According to research, the most successful new product companies use in a research and development strategy that ties internal strength to External opportunities and is linked with corporate objectives

True

Adequate, timely feedback is important to effective strategy evaluation

False

After decades of debate and struggle, firms have finally definitively determine the appropriate social policies

it should be a paper process more than a people process.

All of the following are guidelines for effective strategic planning EXCEPT

the Matrix requires at least three years worth of data.

All of the following are limitations of the BCG Matrix EXCEPT

All of the following are reasons strategy evaluation is more difficult today EXCEPT

All of the following are reasons strategy evaluation is more difficult today EXCEPT

Preventing environmental harm

All of the following business actions are considered to be unethical EXCEPT

Do not offer me ideas, emotions, ambience, feelings, and benefits. Offer me things.

All of the following utility statements are relevant in developing a mission statement EXCEPT

forward integration

Amazon installing "Amazon Lockers" in grocery, 7-Eleven, and drugstores that accept packages for later pickup, in order to combat issues with missing deliveries or having packages stolen, is an example of which type of strategy?

True

America's largest employer, by far, is the nonprofit sector

False

Americans are on the move in a population shift to the north east and Midwest given the significant rise in population in the Sun Belt region

True

Do United States leads the world in promoting women and minorities into mid and top level managerial positions in business

True

Dumping banned or flawed products in foreign markets is considered to be an unethical business practices

True

In a BCG matrix pie slice indicates the proportion of corporate profits generated by that division

True

In a multi divisional organization, each division should develop a mission statement consistent with and supportive of the corporate mission

True

In a turbulent, high velocity market, elite change strategy is best whenever the firm has the resources to pursue this approach

True

In an EFE matrix, Opportunities often receive higher weights than threats, but threats to can receive highway to if they are especially severe or threatening

True

In appropriate strategy when an organizations present channels of distribution can be used to market new products to current customers and horizontal diversification

True

In low earning periods, too much debt in the capital structure of an organization can endanger stockholders returns and jeopardize company survival

True

In many respects, business strategy is like military strategy

False

In most industries, only minor costs of producing a product or service are incurred within operations, so production Does not have great value as a competitive weapon in a company's overall strategy

True

In order for a firm To achieve sustained competitive advantage, a firm must continually adapt to changes in external trends and events and effectively formulate, implement, and evaluate strategies that capitalize upon those factors

True

In order for a firm to achieve sustained competitive advantage, A firm must continually adapt to changes in external trends and events and effectively formulate, implement, and evaluate strategies that capitalize upon those factors

False

In order to be considered bribery, the gift offered must either be money or a physical item

True

In some foreign countries, paying bribes and kickbacks is acceptable

False

In strategy evaluation, a revised IFE Matrix should indicate how effective a firms strategies have been in response to key opportunities and threats

False

In terms of number of employees, restructuring usually involves increasing the size of the firm

A strong industry position

In the SPACE analysis, what does a (+6, +3) strategy profile portray?

False

In the United States, an amicable relationship is often mandatory before conducting business

False

In times of depressed stock prices, stock issuance is often proved the most suitable alternative for obtaining capital

False

Increased costs are a disadvantage of a good information system

middle- and lower-level managers, and even nonmanagers, should be involved in the strategic planning process.

Increased education and diversity of the workforce at all levels are reasons why

False

Increased education and diversity of the workforce at all levels are reasons why the top down approach should be favored in organizations

True

Increased efficiency, quality, productivity and job satisfaction can come from cross training of workers

True

Integrating ethical decision making into performance appraisal process is one way that firms can align ethical and strategic decision making

True

Internal R&D and contract R&D Are the two basic forms of R&D in organizations

True

Introducing present products into new geographic areas is market development

True

Intuitive judgments are almost always involved in deriving quantitative criteria

False

Once a firm acquires a competitive advantage, they are usually able to sustain be competitive advantage indefinitely

True

One of the benefits of having a clear mission and vision as promoting a sense of shared expectations among all managers and employees

True

One of the fundamental strategy evaluation activities is reviewing external and internal factors that are the basis for current strategies

False

Onepositive feature of QSPM Is that it does not require intuitive judgments and educated assumptions

False

Organizing is the corner stone of affective strategy formulation

True

Peoples anxieties are raised with the thought of change because they fear economic loss, inconvenience, uncertainty and a break in normal social pattern

True

Periodic ethics workshops can help sensitize people to workplace circumstances in which ethics issues may arise

True

Policies refer to specific guidelines, methods, procedures, rules, forms, and administrative practices establish to support and encourage work toward stated goals

True

Political forecasts can be the most important part of an external audit for firms that depend heavily on government contracts