GEB4891 MIDTERM REVIEW CH. 1-6 (Chapter 4)
54) Four common approaches to determine R&D budget allocations are
1) finance as many project proposals as possible; 2) use a percentage-of-sales method; 3) budget for R&D about what competitors spend; or 4) decide how many successful new products are needed and work backwards to estimate the required R&D investment. : TRUE
106) According to Roger Schroeder, which basic function within production/operations deals with aggregate planning and scheduling? A) Capacity B) Inventory C) Workforce D) Transportation E) Quality
A
117) The IFE Matrix should be ________ in multidivisional firms. A) constructed for each division B) all-inclusive C) constructed only for the major divisions D) developed before the EFE Matrix E) revised monthly
A
66) Organizational resources include all of the following EXCEPT A) employee training B) firm structure C) planning processes D) information systems E) copyrights
A
72) Life-directing attitudes that serve as behavioral guidelines are called A) values. B) rites. C) beliefs. D) metaphors. E) legends.
A
77) Which of the following does the text call an up-front investment in success? A) Planning B) Organizing C) Motivating D) Staffing E) Controlling
A
79) Who does a planning horizon of two to five years apply to? A) Top-level management B) General management C) Middle-level management D) Lower-level management E) All levels of management
A
89) Opportunity analysis is one of the basic functions of A) marketing. B) finance/accounting. C) computer information systems. D) production/operations. E) research and development.
A
62) A firm's strengths that cannot be easily matched or imitated by competitors are called A) internal audits. B) distinctive competencies. C) external audits. D) interrelated properties. E) internal properties.
B
69) Which of the following were NOT mentioned as an example of cultural products? A) Rites B) Emotions C) Rituals D) Sagas E) Symbols
B
71) What is the term for a historical narrative describing the unique accomplishments of a group and its leaders? A) Rite B) Saga C) Story D) Myth E) Folktale
B
74) Metaphors are A) several rites connected together. B) shorthand of words used to capture a vision or to reinforce old or new values. C) narratives based on TRUE events. D) fictional stories. E) any objects, acts, events, qualities, or relations used to convey meaning.
B
75) What is the essential bridge between the present and the future that increases the likelihood of achieving desired results? A) Motivating B) Planning C) Controlling D) Staffing E) Organizing
B
101) What category of ratios includes return on total assets and return on stockholders' equity? A) Leverage B) Activity C) Profitability D) Growth E) Liquidity
C
103) Which ratio would be considered an activity ratio? A) Debt-to-equity B) Net profit margin C) Average collection period D) Earnings per share E) Current ratio
C
109) Where is the largest seaport, in terms of ship container traffic processed annually? A) Hong Kong B) Shanghai C) Singapore D) Los Angeles E) New York
C
111) ________ ties all business functions together and provides the basis for all managerial decisions. A) Management B) Marketing C) Information D) Technology E) Workforce
C
113) ________ become(s) ________ only when evaluated, filtered, condensed, analyzed, and organized for a specific purpose, problem, individual, or time. A) Information; data B) Information; material C) Data; information D) Data; competitive advantages E) Competitive advantages; material
C
116) Which of the following is the first step in developing an IFE Matrix? A) Determining the organization's structure B) Summing the weighted scores for each variable C) Identifying the organization's strengths and weaknesses D) Identifying the organization's functions of business E) Assigning a weight to each factor
C
96) Distribution includes A) customer analysis. B) pricing. C) warehousing. D) advertising. E) test marketing.
C
99) 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? A) Investment B) Dividend C) Financing D) Capital budgeting E) Implementation
C
107) ________ management deals with inputs, transformations, and outputs that vary across industries and markets. A) Marketing B) Financial C) Research and development D) Production/operations E) Information systems
D
108) In most industries, the major costs of producing a product or service are incurred within A) marketing. B) management. C) research and development. D) operations. E) management information systems.
D
67) Empirical indicators are resources that are either rare, hard to imitate, or A) expensive. B) inexpensive. C) easily substitutable. D) not easily substitutable. E) inefficient.
D
10) For a resource to be valuable, it must be either rare, hard to imitate, or not easily sustainable.
TRUE
11) Linkages between a firm's culture and strategies often determine success.
TRUE
2) 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
22) The controlling function of management is especially important for effective strategy evaluation.
TRUE
23) The purpose of organizing is to achieve coordinated effort by defining task and authority relationships.
TRUE
24) Motivation is one explanation why some people work hard and others do not.
TRUE
28) A form of customer analysis is administering customer surveys.
TRUE
3) An internal audit task force of managers could be charged with determining a specific number (usually 10 to 20) of the most important strengths and weaknesses.
TRUE
30) A new trend with regard to advertising products or services on the Internet is to base advertising rates solely on sales rates.
TRUE
31) During the 2011 Super Bowl, a 30-second advertisement cost between $2.8 and $3 million.
TRUE
33) One aspect of ads in a recession is that they generally take more direct aim at competitors.
TRUE
35) Five major stakeholders that affect pricing decisions are consumers, governments, suppliers, distributors, and competitors.
TRUE
38) Marketing research is the systematic gathering, recording and analyzing, of data about problems relating to the marketing of goods and services.
TRUE
39) A cost/benefit analysis is an appraisal of the costs, benefits, and risks associated with marketing decisions.
TRUE
42) Dividend decisions concern issues such as the percentage of earnings paid to stockholders, the stability of dividends paid over time, and the repurchase or issuance of stock.
TRUE
43) The idea that paying dividends results in a higher stock price is a myth.
TRUE
44) S&P expects that more than 50 percent of S&P 500 firms will raise their dividend payout in 2011.
TRUE
45) Activity ratios measure how effectively a firm is using its resources.
TRUE
49) A limitation of financial ratios is the fact that they are based on accounting data.
TRUE
5) The basic premise of the research-based view is that the mix, type, amount, and nature of a firm's internal resources should be considered first and foremost in devising strategies that can lead to sustainable competitive advantage.
TRUE
53) Increased efficiency, quality, productivity, and job satisfaction can come from cross-training workers.
TRUE
55) Internal R&D and contract R&D are the two basic forms of R&D in organizations.
TRUE
56) The heart of an information system is a database containing the kinds of records and data important to managers.
TRUE
57) Value chain analysis can enable a firm to better identify its own strengths and weaknesses especially as compared to competitors' value chain analyses.
TRUE
59) Benchmarking is an analytical tool used to determine whether a firm's value chain activities are competitive compared to rivals.
TRUE
6) The subtle, elusive and largely unconscious forces that shape the workplace are captured by the organizational culture.
TRUE
60) Constructing an Internal Factor Evaluation Matrix is a summary step when conducting an internal strategic-management audit.
TRUE
61) The Internal Factor Evaluation Matrix should include from 10 to 20 internal factors.
TRUE
7) Cultural products include values, beliefs, stories, and language.
TRUE
9) A ritual is a standardized, detailed set of techniques and behaviors used to manage anxieties.
TRUE
34) Test marketing is used more frequently by industrial companies than consumer goods companies.
FALSE
36) Most producers today sell their goods directly to consumers.
FALSE
37) Distribution becomes especially important when a firm is striving to implement a product development or backward integration strategy.
FALSE
90) ________ can reveal the demographic characteristics of an organization's customers. A) Customer profiling B) Test marketing C) Market development D) The vision statement E) Telemarketing
A
91) All of the following are basic functions of marketing EXCEPT A) value chain analysis B) customer analysis C) product and service planning D) pricing E) distribution
A
93) One aspect of ads in a recession is that they A) take more direct aim at competitors. B) do not mention competitors. C) allude to competitors in a positive light. D) are less combative. E) none of the above
A
95) The Robinson-Patman Act affects a company's A) pricing. B) product/service planning. C) customer analysis. D) marketing research. E) distribution.
A
98) The ________ decision is the allocation and reallocation of capital and resources to projects, products, assets, and divisions of an organization. A) investment B) dividend C) financing D) restructuring E) benchmark
A
100) What category of ratios measures a firm's ability to meet maturing short-term obligations? A) Profitability B) Liquidity C) Leverage D) Activity E) Growth
B
78) Which function of management includes areas such as job design, job specification, job analysis, and unity of command? A) Planning B) Organizing C) Motivating D) Staffing E) Controlling
B
82) Which function of management is concerned with span of control and chain of command? A) Planning B) Organizing C) Controlling D) Staffing E) Motivating
B
83) Which of the following is the process of influencing people to accomplish specific objectives? A) Staffing B) Motivating C) Planning D) Controlling E) Organizing
B
63) Who should perform an internal audit? A) A private auditing firm B) The organization's accounting department C) Representative managers and employees from throughout the firm D) A small team of top-level managers E) The chief executive officer
C
64) ________ exemplifies the complexity of relationships among the functional areas of business. A) Government auditing B) External auditing C) Financial ratio analysis D) Environmental scanning E) Distribution strategy
C
65) The three all-encompassing internal resource categories used in the Resource-Based View are physical resources, human resources, and A) financial resources. B) shareholder resources. C) organizational resources. D) non-renewable resources. E) technological resources.
C
76) All of the following are basic duties of management EXCEPT A) staffing B) planning C) consolidating D) organizing E) motivating
C
81) Which management function includes breaking tasks into jobs, combining jobs to form departments, and delegating authority? A) Motivating B) Staffing C) Organizing D) Controlling E) Planning
C
85) Staffing involves all of these activities EXCEPT A) recruiting B) transferring C) customer analysis D) managing union relations E) training and developing
C
88) All of the following are key questions that can reveal internal strengths and weaknesses in the management department EXCEPT A) Is the organization's structure appropriate? B) Are reward and control mechanisms effective? C) Are the organization's products positioned well against competing products? D) Does the firm use strategic-management concepts? E) Do managers delegate authority well?
C
92) Selling includes all of these marketing activities EXCEPT A) advertising B) dealer relations C) customer analysis D) publicity E) sales promotion
C
87) The first step in the controlling function of management is to A) take corrective actions. B) restrict the number of breaks employees take. C) evaluate expense reports. D) establish performance standards. E) measure individual and organizational performance.
D
94) What marketing function includes test marketing? A) Selling products/services B) Pricing C) Customer analysis D) Product/service planning E) Distribution
D
80) Synergy A) is the 2 + 2 equals 5 effect. B) can result in powerful competitive advantages. C) can be developed by an organization through planning. D) exists when everyone pulls together as a team that knows what it wants to achieve. E) all of the above
E
84) ________, perhaps the most important word in management, is a major component in motivation. A) Forecasting B) Organizational structure C) Recruiting D) Management development E) Communication
E
86) Which function of management includes all of those activities undertaken to ensure actual operations conform to planned operations? A) Planning B) Organizing C) Motivating D) Staffing E) Controlling
E
97) Which of the following is NOT a key question that can reveal internal strengths and weaknesses of the marketing department? A) Does the firm have an effective sales organization? B) Is our product quality good? C) Are markets segmented effectively? D) Are the firm's products and services priced appropriately? E) Does the firm have good liquidity?
E
4) 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
41) Financial ratios are not applicable to nonprofit organizations.
FALSE
46) Leverage ratios measure a firm's ability to meet maturing short-term obligations.
FALSE
47) The total assets turnover ratio is calculated by dividing sales by fixed assets.
FALSE
48) Financial ratio analysis really should not go beyond the actual calculation and interpretation of ratios.
FALSE
50) Capacity decisions concern distances from raw materials to production sites to customers.
FALSE
51) In most industries, only minor costs of producing a product or service are incurred within operations, so production/operations does not have great value as a competitive weapon in a company's overall strategy.
FALSE
52) Honda Motor, long considered the industry's fastest producer, fills a buyer's new car order in just 5 days.
FALSE
58) Although a useful step in the strategic management process, value chain analysis does little to help a firm monitor whether its prices and costs are competitive.
FALSE
8) Metaphors are handed-down narratives of some wonderful event that are based on history but have been embellished with fictional detail.
FALSE
13) The RBV theory asserts that it is advantageous for a firm to pursue a strategy that is not currently being implemented by any competing firm.
TRUE
14) An organization's culture compares to an individual's personality in the sense that no two organizations have the same culture and no two individuals have the same personality.
TRUE
16) Established companies are coming to realize that their next generation of potential customers spends more time online than watching TV.
TRUE
19) The only certain thing about the future of any organization is change.
TRUE
27) There are seven basic functions of marketing
customer analysis, selling products/services, product and service planning, pricing, distribution, marketing research, and opportunity analysis. : TRUE
40) According to James Van Horne the basic decision areas of finance are
the investment decision, the financing decision, and the dividend decision. : TRUE
105) The times-interest-earned ratio would be classified as a(n) A) activity ratio. B) leverage ratio. C) profitability ratio. D) liquidity ratio. E) growth ratio.
B
114) 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 A) the resource-based approach. B) value chain analysis. C) strategic cost analysis. D) the internal factor evaluation matrix. E) cost-benefit analysis.
B
68) 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 A) dysfunctional behavior. B) groupthink. C) behavior modification. D) organizational culture. E) internal audit effect.
D
70) A standardized set of behaviors used to manage anxieties is called a A) folktale. B) rite. C) metaphor. D) ritual. E) value.
D
73) Any object, act, event, quality, or relation used to convey meaning is known as a A) myth. B) rite. C) value. D) symbol. E) metaphor.
D
102) What category of ratios measures how effectively a firm can maintain its economic position in the growth of the economy and industry? A) Profitability B) Liquidity C) Leverage D) Activity E) Growth
E
104) Which ratio is calculated by dividing profits before interest and taxes by total interest charges? A) Inventory turnover B) Fixed assets turnover C) Total assets turnover D) Debt-to-equity ratio E) Times-interest-earned ratio
E
110) ________ is a commonly used approach to determine R&D budget allocations. A) Financing as many project proposals as possible B) Using the percentage of sales method C) Budgeting for R&D about what competitors spend D) Deciding how many successful new products are needed E) All of the above
E
112) An effective information management system ________ information in such a way that it s important operating and strategic questions. A) collects B) codes C) stores D) synthesizes E) all of the above
E
115) The initial step to implementing value chain analysis is A) attaching a cost to each discrete activity. B) establishing costs in terms of time. C) establishing costs in terms of money. D) converting the cost data into information by looking for competitive cost strengths and weaknesses. E) dividing a firm's operations into specific activities or business processes.
E
1) Opportunities are a firm's distinctive competencies that cannot be easily matched or imitated by competitors.
FALSE
12) Resources that are common are never considered valuable.
FALSE
15) At Google the culture is very rigid, while in contrast the culture at Proctor & Gamble is very informal.
FALSE
17) While interesting, organizational culture does not significantly affect business decisions.
FALSE
18) Allocating resources is one of the five basic activities (functions) performed by managers.
FALSE
20) Organizing is the cornerstone of effective strategy formulation.
FALSE
21) Planning should be performed mostly by middle management and then presented to top management for analysis and approval.
FALSE
25) The management function of organizing is included in human resource management.
FALSE
26) The controlling function of management is synonymous with strategy formulation.
FALSE
29) Successful strategy formulation generally rests upon the ability of an organization to sell some product or service.
FALSE
32) Total advertising expenditures in the U.S. in 2011 is expected to be down 2.5 percent from the prior year.
FALSE