Capstone Chap.1 ~ Chap. 3
4) External audits attempt to identify key variables that offer highly intuitive responses
B
24) What is the range for a firm's total weighted score in a Competitive Profile Matrix (CPM)? A) 0 to 4 B) 0 to 5 C) 1 to 4 D) 1 to 5 E) 0 to 10
C
13) According to Porter, what is usually the most powerful of the five competitive forces? A) Potential development of substitute products B) Bargaining power of suppliers C) Bargaining power of consumers D) Rivalry among competing firms E) Potential entry of new competitors
D
19) The potential for creative growth in an organization can be limited by A) an overemphasis on stakeholders. B) not enough emphasis on stakeholders. C) a mission statement that is too general. D) a mission statement that is too specific. E) a mission statement that is too dynamic.
D
22) In order to appeal to diverse stakeholders, an effective mission statement should be A) inflammatory. B) provocative. C) contentious. D) reconciliatory. E) dysfunctional.
D
22) The weights and total weighted scores in a Competitive Profile Matrix (CPM) have the same meaning the weights and total weighted scores in a A) Comprehensive Profile Analysis (CPA). B) Dynamic Trends Analytical Framework. C) Porter's Five Forces Model. D) External Factor Evaluation (EFE). E) Evaluative Forces Matrix (EFM).
D
6) According to I/O theorists, which of the following contributes LEAST to firm's performance? A) Economies of scale B) Barriers to market entry C) Product differentiation D) Internal resources E) Level of competitiveness
D
10) 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. A) external group B) external auditor C) outside process analyst D) internal auditor E) outside facilitator
E
10) The most effective strategic management is ritualistic, predictable, and formal.
False
17) Many organizations mistakenly spend more time and effort on the implementation of a plan, than on the formulation of the plan itself.
False
19) Management by intuition can be defined as operating from the "I've-already-made-up-mymind-don't-bother-me-with-the-facts mode."
False
16) Strategy implementation is often considered to be the most difficult stage in the strategic management process.
True
33) According to Greenley, some of the benefits of strategic management are increased discipline, enhanced communication, and more effective allocation of time and resources.
True
37) Making many intuitive decisions that conflict with the formal plan is a pitfall in strategic planning.
True
9) To be effective, strategic-management must be a process that familiarizes managers and employees with the key strategic issues facing an organization and the feasible alternatives for resolving those issues.
True
11) According to Campbell and Yeung, what is/are most likely associated with behavior and the present? A) Mission B) Values C) Long-term objectives D) Vision E) Possibilities
A
12) During what stage of strategic management are a firm's specific internal strengths and weaknesses determined? A) Formulation B) Implementation C) Evaluation D) Feedback E) Goal-setting
A
13) According to Campbell and Yeung, the process of developing a mission statement should create an "emotional bond" and "sense of mission" between the organization and its employees.
A
13) What types of skills are especially critical for successful strategy implementation? A) Interpersonal B) Marketing C) Technical D) Conceptual E) Visionary
A
15) In which phase of strategic management are long-term objectives especially important? A) Formulation B) Control C) Evaluation D) Implementation E) Management
A
15) Raising the question "What is our business" may cause a realization of fundamental disagreement among individuals who have worked together for a long time and who think they know each other.
A
16) All stakeholders' claims on an organization ________ pursued with equal emphasis. A) cannot be B) should always be C) are required to be D) must ideally be E) can usually be
A
17) All stakeholders A) have claims and concerns about an organization, but these claims and concerns vary. B) have the same claims and concerns about an organization. C) have ownership rights in an organization. D) have the same voting rights in an organization. E) have environmental concerns as their top priority.
A
18) What is the first step in designing an External Factor Evaluation (EFE) Matrix? A) Identifying key external factors B) Summing the weighted score for each competitor C) Calculating the sales of each competitor D) Drawing the horizontal and vertical lines for the matrix E) Determining four competitors
A
20) An overly general mission statement that ________ could be dysfunctional. A) does not exclude any strategy alternatives B) encourages management creativity C) excludes all diversification D) endorses the consideration of feasible potential strategies E) allows for the generation and consideration of a range of alternative objectives
A
21) Generally, external opportunities and threats are A) uncontrollable by a single organization. B) unable to have a significant impact on an organization. C) not worth monitoring and evaluating. D) key functions in strategy implementation. E) key functions in strategy exploitation.
A
21) One difference between a Competitive Profile Matrix (CPM) and an External Factor Evaluation (EFE) is that A) CPM includes both internal and external issues. B) the weights and total weighted scores have different meanings. C) CPM ratings range from 1 to 10. D) CPM is performed only for the company, whereas EFE is performed for both the company and its competitors. E) CPM is only used in small firms.
A
24) According to McGinnis, a mission statement should be all of the following EXCEPT A) it should be broad enough to include all ventures. B) it should be stated in clear terms. C) it should distinguish an organization from all others. D) it should define what an organization is. E) it should serve as a framework for evaluating both current and prospective activities.
A
29) The Internet has transferred power from ________ to ________. A) businesses; individuals B) governments; businesses C) individuals; businesses D) businesses; governments E) individuals; governments
A
3) External audits attempt to identify key variables that offer ________ responses. A) actionable B) authoritative C) profitable D) strategic E) terminal
A
31) Which of the following is NOT one of the nine recommended components of a mission statement? A) Strategies B) Self-concept C) Employees D) Markets E) Customers
A
35) All of these are pitfalls an organization should avoid in strategic planning EXCEPT A) using plans as a standard for measuring performance. B) using strategic planning to gain control over decisions and resources. C) failing to involve key employees in all phases of planning. D) too hastily moving from mission development to strategy formulation. E) being so formal in planning that flexibility and creativity are stifled.
A
8) A mission statement can sometimes be called a statement of philosophy
A
9) A characteristic that describes the most competitive companies is adopting the adage, "Whether it's broke or not, fix it"; in other words, continually strive to improve everything about the firm.
A
10) Erosion of the U.S. manufacturing base is reflected in the sharp increase in labor union membership in the last decade.
B
14) According to Drucker, what is the best time to ask "What do we want to become?" and "What is our business?"? A) When a firm is in decline B) When the firm is successful C) When the firm is in financial trouble D) When the firm is in legal trouble E) When the firm encounters competition
B
14) If suppliers are unreliable or too costly, which of these strategies may be appropriate? A) Horizontal integration B) Backward integration C) Market penetration D) Forward integration E) Concentric diversification
B
17) 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. A) 1.0 B) 4.0 C) 5.0 D) 10.0 E) 100.0
B
18) A good mission statement has A) an employee orientation. B) a customer orientation. C) a shareholder orientation. D) an environmental orientation. E) a profit orientation.
B
2) Which type of statement should be created first and foremost? A) Creed B) Vision C) Objectives D) Mission E) Competitive advantage
B
27) According to George Steiner, vagueness has no place in a good mission statement.
B
28) A mission statement is excessively broad if it represents an attempt to reconcile differences among an organization's various stakeholders.
B
30) Which component of a mission statement addresses the basic beliefs, values, aspirations, and ethical priorities of the firm? A) Technology B) Philosophy C) Concern for public image D) Customers E) Self-concept
B
5) If an organization chooses to have both a mission and a vision, the mission statement should be established first
B
1) The goal of strategic management is to A) achieve competitive advantage. B) maintain competitive advantage. C) achieve and maintain competitive advantage. D) eliminate competitive advantage. E) eliminate and abolish competitive advantage.
C
1) To perform an external audit, a company first must A) get an approval from the Securities and Exchange Commission. B) perform an internal audit. C) gather competitive intelligence and information about external trends. D) hire a consultant to develop a comprehensive strategic plan. E) all of the above
C
11) Intensity of competition ________ in lower-return industries. A) is lowest B) is nonexistent C) is highest D) is not important E) fluctuates
C
11) Sometimes ________ is used to refer to strategic formulation, implementation and evaluation, with ________ referring only to strategic formulation. A) strategic planning; strategic management B) strategic planning; strategic processing C) strategic management; strategic planning D) strategic management; strategic processing E) strategic implementation; strategic focus
C
12) What is NOT one of Michael Porter's five competitive forces? A) Potential entry of new competitors B) Rivalry among competing firms C) Bargaining power of unions D) Bargaining power of suppliers E) Bargaining power of consumers
C
14) In which phase of strategic management are annual objectives are especially important? A) Reduction B) Formulation C) Implementation D) Evaluation E) Policy
C
16) ________ is NOT a basic mission of a competitive intelligence program. A) Providing a general understanding of an industry B) Providing a general understanding of a company's competitors C) Identifying industry executives who could be hired by the firm D) Identifying areas in which competitors are vulnerable and assessing the impact strategic actions would have on competitors E) Identifying potential moves a competitor might make that would endanger a firm's position in the market
C
18) Which statement best describes intuition? A) It alone should be used in decision-making. B) It represents a minor factor in decision-making integrated with analysis. C) It should be coupled with analysis in decision-making. D) It is better than analysis in decision-making. E) It is management by ignorance.
C
19) What is the range for a firm's total weighted score in an External Factor Evaluation Matrix? A) 0 to 4 B) 0 to 5 C) 1 to 4 D) 1 to 5 E) 0 to 10
C
2) Collecting and evaluating information on competitors is essential for successful A) internal analysis. B) strategy evaluation. C) strategy formulation. D) strategy implementation. E) strategy correction.
C
22) The act of strengthening employees' sense of effectiveness by encouraging and rewarding them for participating in decision-making and exercising initiative and imagination is referred to as A) authoritarianism. B) proaction. C) empowerment. D) transformation. E) delegation.
C
23) In developing a mission statement, arousing emotion A) is not a benefit. B) is futile. C) is important. D) should be avoided if possible. E) is counterproductive
C
23) The critical success factors in a Competitive Profile Matrix and EFE Matrix include A) internal but not external issues. B) external but not internal issues. C) both internal and external issues. D) neither internal or external issues. E) only non-quantifiable data.
C
25) How do line managers become "owners" of the strategy? A) By attending top manager meetings ) By executing plans formulated by other people C) By involvement in the strategic-management process D) By becoming a shareholder of the firm E) By buying off top managers
C
25) The recommended length of an effective mission statement is ________ words. A) approximately 25 B) no more than 100 C) less than 150 D) at least 300 E) more than 500
C
26) What question is asked in conjunction with the philosophy component of a mission statement? A) What are the firm's major products or services? B) Is the firm committed to growth and financial soundness? C) What are the basic beliefs, values, aspirations, and ethical priorities of the firm? D) Is the firm responsive to social, community, and environmental concerns? E) Are employees a valuable asset of the firm?
C
3) The ideal length of a vision statement is A) one page. B) several paragraphs. C) one sentence. D) several sentences. E) as long as is necessary to convey the message.
C
4) The strategic-management process represents a(n) ________, ________, and ________ approach for determining an enterprise's future direction. A) logical; systematic; subjective B) intuitive; disorganized; subjective C) logical; systematic; objective D) intuitive; disorganized; objective E) inconsistent; systematic; subjective
C
4) Which basic question should the vision statement answer? A) What is our business? B) How can we improve ourselves? C) What do we want to become? D) Who are our stakeholders? E) How can we increase profitability?
C
5) The Industrial Organization (I/O) approach to competitive advantage advocates that external factors are ________ internal factors in a firm achieving competitive advantage. A) less important than B) equally important as C) more important than D) more common than E) less common than
C
5) The strategic-management process A) occurs once a year. B) is a semiannual process. C) is a continuous process. D) applies mostly to companies with sales greater than $100 million. E) applies mostly to small businesses.
C
6) Who is referred to as "the father of modern management"? A) Cleland B) Campbell C) Drucker D) McGinnis E) Yeung
C
7) Many economists say the current rash of trade constraints will make it ________ for global economic growth. A) easier B) impossible C) harder D) more likely E) less time-consuming
C
1) Which statement is TRUE? A) Companies must choose between having a mission statement or a vision statement. B) A company can't have a mission statement unless it has a vision statement. C) A vision statement cannot be established until a company has developed its mission statement. D) The vision statement should be established before the mission statement. E) Companies are required by law to have both mission and vision statements.
D
29) In mass retailing, big-box companies like Walmart, Best Buy, and Sears are A) gaining competitive advantage over smaller stores. B) participating in a dramatic shift to becoming bigger. C) increasing the square-footage of their retail locations. D) finding that less brick and mortar is better. E) noticing a sharp decline in online purchases.
D
There is a dramatic shift in mass retailing to A) "trading up" and taking customers from more exclusive stores. B) selling only the most expensive merchandise. C) opening dramatically larger supercenters. D) operating stores with less square footage. E) cutting back on their online presence.
D
34) Once a firm acquires a competitive advantage, it is usually able to sustain it indefinitely.
False
6) Optimizing for tomorrow the trends of today is the purpose of strategic management.
False
7) U.S. firms are not being aggressively challenged in the computer industry.
False
8) By occasionally monitoring external events, companies should be able to identify when change is required.
False
15) A ________ integration strategy is used by firms to gain control or ownership of suppliers. A) backward B) forward C) horizontal D) vertical E) vortexed
A
38) Terms such as objectives, mission, strengths, and weaknesses were first formulated to address problems A) on the battlefield. B) in the boardroom. C) on the trading floor. D) in the military hierarchy. E) in interpersonal relationships.
A
7) According to Drucker, which question is synonymous with asking "What is our mission?"? A) What is our business? B) How can we improve ourselves? C) What do we want to become? D) Who are our stakeholders? E) How can we increase profitability?
A
36) Which of the following is NOT a pitfall an organization should avoid in strategic planning? A) Failing to communicate the plan to employees B) Involving all managers rather than delegating planning to a "planner" C) Top managers not actively supporting the strategic-planning process D) Doing strategic planning only to satisfy accreditation or regulatory requirements E) Failing to create a collaborative climate supportive of change
B
39) Military strategy is based on an assumption of ________, whereas business strategy is based on an assumption of ________. A) conflict; cooperation B) conflict; competition C) cooperation; conflict D) competition; conflict E) cooperation; competition
B
20) When using External Factor Evaluation (EFE) Matrix, what is done after multiplying each factor's weight by its rating to determine a weighted score? A) Identifying key external factors B) Summing the weighted score for each competitor C) Summing the weighted scores for each variable to determine the total weighted score for the organization D) Drawing the horizontal and vertical lines for the matrix E) Determining the preferred strategic factor
C
26) Annually, ________ businesses in the United States fail. A) exactly 100 B) less than 1,000 C) about 10,000 D) more than 100,000 E) almost 10 million
D
3) What can be defined as the art and science of formulating, implementing and evaluating crossfunctional decisions that enable an organization to achieve its objectives? A) Strategy formulation B) Strategy evaluation C) Strategy implementation D) Strategic management E) Strategic leading
D
2) Strategic management focuses on integrating management, ________, and information systems to achieve organizational success. A) marketing B) finance and accounting C) production and operations D) research and development E) all of the above
E
21) The general public is especially interested in ________, whereas stockholders are more interested in ________. A) environmental concerns; social responsibility B) social responsibility; the treatment of employees C) the treatment of employees; environmental concerns D) profitability; social responsibility E) social responsibility; profitability
E
29) Which component of a mission statement addresses the firm's distinctive competence or major competitive advantage? A) Technology B) Philosophy C) Concern for public image D) Customers E) Self-concept
E
8) A weak dollar means A) lower exports and higher imports. B) lower exports and lower imports. C) lower exports and no effect on imports. D) higher exports and higher imports. E) higher exports and lower imports
E
9) After a draft mission statement has been developed, it is important to A) ask managers to read several articles about mission statements as background information. B) vote on the mission statement. C) ask managers to prepare a mission statement for the organization. D) ask managers to seek support for the mission statement from their subordinates. E) request modifications, additions, and deletions.
E
20) An objective, logical, systematic, & non intuitive approach for making major decisions in an organization is a way to describe the strategic-management process.
False
23) Because the position of Chief Executive Officer (CEO) has assumed much responsibility for strategic management in the last five years, the number of firms with the position of Chief Strategy Officer (CSO) has diminished drastically during this period.
False
24) Annual objectives are especially important in strategy formulation.
False