Chapter 2 Quiz

To execute either a cost leadership or differentiation strategy, what is needed to begin the process? a. A concise statement of strategy that is clearly communicated within the organization. b. Incentives based on meeting quantitative targets. c. Strong marketing capability. d. Long tradition in the industry. e. Access to capital.

a. A concise statement of strategy that is clearly communicated within the organization.

Which of the following is a financial Critical Success Factor? a. All of the answer choices are financial Critical Success Factors b. Profitability c. Sales d. Liquidity e. Market Value

a. All of the answer choices are financial Critical Success Factors

Both cost leadership and differentiated firms can improve on execution through: a. Benchmarking and total quality management. b. Improved automation and a higher output of products. c. Emphasis on research and product development. d. Cost cutting and downsizing of personnel. e. None of these answer choices are correct.

a. Benchmarking and total quality management.

How do management accountants support the strategy and execution of differentiated firms? a. By gathering, analyzing, and reporting relevant information. b. By developing customer loyalty and brand recognition. c. By using market research to decide how a company should implement its strategy. d. By providing leadership to the firm. e. None of these answer choices are correct.

a. By gathering, analyzing, and reporting relevant information.

A firm has decided to use the balanced scorecard. Which of the following is not an advantage the company will gain by using the balanced scorecard? a. It provides a comprehensive financial overview of the firm. b. It can provide a basis for implementing strategic changes desired by the firm. c. It links the firm's Critical Success Factors to its strategy. d. It helps to coordinate activities in the firm. e. It helps the firm monitor progress to achievement of its strategic goals.

a. It provides a comprehensive financial overview of the firm.

It is becoming more common to see manufacturing firms use the value chain to take strategic steps to improve the overall profitability of the firm by: a. Moving to an emphasis on both the upstream and downstream activities in the value chain. b. Moving to an emphasis on downstream activities in the value chain. c. Moving to an emphasis on upstream activities in the value chain. d. Identifying most profitable customers. e. Placing greater emphasis on the value chain.

a. Moving to an emphasis on both the upstream and downstream activities in the value chain.

Which of the following would be a resource that a firm would analyze during the Strengths and Weaknesses step of the Strengths-Weaknesses-Opportunities-Threats (SWOT) analysis? a. Operations. b. Pressure from substitute products. c. Pressure from substitute products. d. Bargaining power of suppliers. e. Barriers to entry.

a. Operations.

The differentiation strategy requires all of the following resources, except: a. Products designed for ease of manufacture. b. Product engineering. c. Corporate reputation for quality or technology leadership. d. Strong marketing capability. e. Long tradition in the industry or unique skills.

a. Products designed for ease of manufacture.

The analysis tool acronym SWOT stands for: a. Strengths - Weaknesses - Opportunities - Threats. b. Strategies - Weaknesses - Observations - Threats. c. Strengths - Workability - Opportunities - Threats. d. Strategies - Weaknesses - Opportunities - Thinking. e. Strengths - Weaknesses - Observations - Threats.

a. Strengths - Weaknesses - Opportunities - Threats.

The cause and effect relationships among critical success factors are best captured in: a. The strategy map. b. Business analytics. c. The value chain. d. The balanced scorecard. e. Strengths-Weaknesses-Opportunities-Threats (SWOT) analysis.

a. The strategy map.

The five steps of strategic decision-making include all of the following steps except: a. Obtain information and conduct analyses. b. Determine the organization's critical success factors. c. Identify the alternative actions. d. Continue an on-going evaluation of the problem. e. Choose and implement the desired action.

b. Determine the organization's critical success factors.

All of the following are required resources for differentiation except: a. Corporate reputation for quality. b. Intense supervision of labor. c. Long tradition in the industry. d. Product engineering. e. Strong marketing capability.

b. Intense supervision of labor.

Which of the following is not a key benefit of the balanced scorecard (BSC)? a. It provides a means for tracking progress toward the achievement of strategic goals. b. It provides a baseline for how an organization's financial operations compare to competition within the industry. c. It provides a framework for the firm to achieve a desired organizational change in strategy. d. It provides an objective basis for determining each manager's compensation and advancement. e. It provides a means for implementing strategy.

b. It provides a baseline for how an organization's financial operations compare to competition within the industry.

Which of the following is not an effective way to implement the balanced scorecard? a. Obtain the support of top management. b. Make it so that the balanced scorecard cannot be modified so that the strategy can have time to take effect. c. Include processes for ensuring the accuracy and reliability of the information in the scorecard. d. Give managers and employees clear incentives linked to the scorecard. e. Ensure that the relevant portions of the scorecard are readily accessible to those responsible for the measures.

b. Make it so that the balanced scorecard cannot be modified so that the strategy can have time to take effect.

Which is not a concern for sustainability? a. Health. b. Profit. c. Labor. d. Safety. e. Climate change.

b. Profit.

Which of the following types of organizations can most benefit from value chain analysis? a. Service firms. b. Manufacturing firms. c. All types of organizations can benefit from value chain analysis. d. None of these types of organizations can benefit from value chain analysis. e. Not-for-profit organizations.

c. All types of organizations can benefit from value chain analysis.

After critical success factors have been identified, the next step in developing a competitive strategy is to develop relevant and reliable measure for these critical success factors. These measures are important to help the organization: a. Improve productivity in selected product areas. b. Make profit for any extended period. c. Monitor progress toward achieving strategic goals. d. Develop policies to enhance customer profitability. e. Increase sales above previous year(s).

c. Monitor progress toward achieving strategic goals.

Which of the following is not a category of the environmental component of sustainability indicators? a. Management indicators. b. Environmental condition indicators. c. Working condition indicators. d. All of the answers are a category of the environmental component of sustainability indicators. e. Operational indicators.

c. Working condition indicators.

The balanced scorecard can be made more effective by developing it at a detail level so that employees: a. Appreciate all the effort that goes into its preparation. b. Respect management for including them in its formulation. c. Do not feel left out. d. Can see how their actions contribute to the success of the firm. e. Can see how it is put together.

d. Can see how their actions contribute to the success of the firm.

A firm succeeds on its ability to deliver products to customers more quickly than rival companies in its industry. This skill is an example of the firm's: a. Production efficiency. b. Value-chain analysis. c. Cost control effectiveness. d. Core competency. e. Research effectiveness.

d. Core competency.

Which of the following perspectives of a Balanced Scorecard would most likely be the ultimate goal in a strategy map for a public company? a. Internal processes. b. Learning and innovation. c. Customer service. d. Financial performance. e. Employees and community.

d. Financial performance.

The main objective of value chain analysis is to identify stages of the value chain where the firm can: a. Justify increases in the price of the product or service. b. Outsource production to other producers. c. Improve efficiency. d. Increase value to the customer or reduce cost in some way. e. None of these answer choices are correct.

d. Increase value to the customer or reduce cost in some way.

Which of the following organizations presents awards to firms that excel at execution of strategy, based on criteria such as leadership, marketing, strategic planning, and process management? a. International Organization for Standardization. b. American Institute of Certified Public Accountants. c. Global Reporting Initiative. d. Malcolm Baldrige National Quality Program. e. World Resources Institute.

d. Malcolm Baldrige National Quality Program.

Which of the following would likely not be considered part of the value chain in a service firm? a. Inspection of product. b. Advertising. c. Employee training. d. Materials handling. e. Customer service.

d. Materials handling.

The role of the management accountant is to make sustainability indicators an integral part of which of the following? a. Product design. b. Purchasing. c. Management decision making. d. Product design, strategic planning, management decision making, and purchasing. e. Strategic planning.

d. Product design, strategic planning, management decision making, and purchasing.

Which of the following is not a reason why global companies choose to report on corporate responsibility? a. Ethical considerations. b. Market share. c. Risk management. d. Saves time. e. Innovation and learning.

d. Saves time.

Outdoor Company, maker of clothing and gear for outdoor enthusiasts, is very conscious of sustainability issues. The company chose not to produce a product because: a. The environmental impact of toxic waste was unacceptable. b. The cost of manufacturing the product exceeded its target cost. c. There was not sufficient demand for the product at the planned price. d. The environmental impact of producing the product in terms of carbon emissions and energy consumptions was unacceptable. e. The company could not justify adding another product when there were acceptable alternatives already in the company's product offerings.

d. The environmental impact of producing the product in terms of carbon emissions and energy consumptions was unacceptable.

Some of the indicators of a growing concern for sustainability include: a. The trend to economic nationalism. b. The increased use of value chain analysis. c. The immigration crisis in many countries. d. The increased concern about climate change. e. The increased use of the balanced scorecard.

d. The increased concern about climate change.

A strategy map is: a. A framework for the firm to achieve a desired organizational change in strategy while mapping the successes of other firms within the industry. b. A spreadsheet that lists the top goals and priorities of an organization and the steps needed to achieve them. c. A detailed flowchart outlining which firm managers are responsible for each implementation of a firm's strategy and when these implementations are to take place. d. None of these answer choices are correct. e. A cause and effect diagram of the relationships among the balanced scorecard perspectives to show how the achievement of critical success factors in each perspective affects the achievement of goals in other perspectives and the overall financial performance of the firm.

e. A cause and effect diagram of the relationships among the balanced scorecard perspectives to show how the achievement of critical success factors in each perspective affects the achievement of goals in other perspectives and the overall financial performance of the firm.

Which of the following is not one of the four perspectives of the balanced scorecard? a. Financial perspective. b. Customer perspective. c. Internal process perspective. d. Learning and growth perspective. e. Costs perspective.

e. Costs perspective.

During which step of value chain analysis will the company discover whether or not it has a cost advantage, and why? a. During the first step, when the value-chain activities are identified. b. In the third step, when the company adopts and implements the balanced scorecard. c. During the first step, when the cost driver(s) are identified. d. The entire purpose of value chain analysis is to determine if the company has a cost advantage; therefore, it occurs in all steps. e. During the second step, when the firm develops a competitive advantage by either reducing cost or adding value.

e. During the second step, when the firm develops a competitive advantage by either reducing cost or adding value.

A local pharmaceutical firm has just announced its discovery of a revolutionary new drug for dieting. However, due to its deteriorating relationship with its union, the unionized portions of the company's employees have threatened to strike. In addition, the company's stock has started to drop due to the firm's difficulty in paying off some of its debt. In this example, what was the firm's core competency(ies)? a. None of the answer choices are correct. b. Its financing activities. c. Its human resources abilities. d. Its operating activities. e. Its research and development.

e. Its research and development.

Which of the following is not a term used for a phase of the value chain? a. Upstream. b. Downstream. c. Downstream. d. All of the answer choices are terms used for a phase of the value chain. e. Sustainability.

e. Sustainability.

In order to remain competitive in the contemporary business environment, several firms have started training their employees to stop viewing problems as strictly functional - that is, as only a marketing problem, or an accounting problem, for example. What does this trend illustrate about strategic management? a. Strengths-Weaknesses-Opportunities-Threats (SWOT) analysis is designed to break down functional barriers. b. Functional barriers are an inherent part of a company's value chain. c. Management doesn't understand how a firm works in the real world. d. Firms are increasingly seeing the value of business analytics. e. There has been a renewed emphasis on integrative thinking and solving problem cross-functionally.

e. There has been a renewed emphasis on integrative thinking and solving problem cross-functionally.