MGMT EXAM 2 STUDY GUIDE

7. The use of _____ in planning produces a false sense of certainty and is often cited as one of the major pitfalls in planning.

Assumptions

15. The ______ is a portfolio strategy that managers use to categorize their corporation's businesses by growth rate and relative market share. This strategy helps them decide how to invest corporate funds.

BCG Matrix

2. Planning works best when the goals and action plans at the ______ of the organization support the goals and action plans at the _____ of the organization.

Bottom and middle; top

19. _____ is the measure of the intensity of competitive behavior between two companies in an industry.

Character of the rivalry

8. When Coca-Cola discovered it had an unauthorized bottler selling Coke in the Columbian jungle, it used the rational decision making process to find a solution. What do you know about the stage in which Coke evaluated its possible courses of action?

Coke found this stage (Evaluate Each Alternative) to be the most time-consuming of all the stages

13. The highly fragmented chemical industry in Europe has experienced decreasing profits in an industry reluctance to change the way it conducts business, especially in how it competes against lower-priced U.S. imports. This is an example of:

Competitive Inertia

51. Hohner is a company that manufactures and markets harmonicas, a product with a steady demand rate. It is so successful at what it does that the company controls 85 percent of the world's harmonica industry. In terms of adaptive strategies, Hohner would most likely be categorized as a(n)_________.

Defender

47. The ______ is a decision-making method in which a panel of experts responds to questions and to each other until an agreement is reached on how a specific issue should be handled.

Delphi technique

58. Downsizing has thinned the ranks of hospital personnel. Hospital employees were adamantly resisting any more change. What method could hospital administrators use to manage this resistance?

Educate employees about the need for change Let the employees participate in implementing the change process Provide significant managerial support Let employees discuss and agree on who will do what after change occurs

21. When resistance to change is based on insufficient, incorrect, or misleading information, managers should use _______ as an approach to manage resistance.

Education and communication

24. Hewlett-Packard is currently exploring new products and markets through the development of digital imaging products in its plants in India, South Africa, and the United States. To jump-start this innovative process, Hewlett-Packard can ______ across all of its plants around the world.

Establish creative work environment

40. As a company that manufactures janitorial cleaning supplies tries to develop more environmentally -friendly products that can clean as well as its current ones, the company's manager must select among alternatives derived from oranges, parsley, lemon, or a combination of these ingredients. This is the ____ step in the rational decision-making model.

Evaluate each alternative

39. ____ occurs when a company sells domestically produced products to customers in foreign countries.

Exporting

14. When Clorox Corporation, the manufacturer of bleach and bleach-based cleaning products, acquired Kingsford Charcoal and Prime Choice brand steak sauce; it was an example of:

External growth

38. According to Hofstede's research on cultural dimensions, ____ cultures emphasize the importance of relationships, modesty, caring for the weak, and quality of life.

Feminine

34. Protectionism is the use of trade barriers to protect local companies and their workers from ______.

Foreign competition

72. Protectionism is the use of trade barriers to protect local companies and their workers from _____.

Foreign competition

28. Which of the following is NOT one of the components of creative work environments?

Group compensation

33. According to Hofstede, when people in a culture are oriented to the present and seek immediate gratification, that culture is described as _____.

Having short-term orientation

42. Groupthink occurs in _______.

Highly cohesive groups where there is a great deal of pressure to agree with each other

63. Patterns of innovation over time that can create sustainable competitive advantage are called _____.

Innovation Streams

6. How does a company benefit from planning?

Intensified effort, persistence, direction, and creation of task strategies

64. A ____ is a strategic alliance in which two existing companies collaborate to form a third, independent company.

Joint Venture

73. In Canada, two automobile companies have entered into a _____ to create CAMI Automotive. One firm's management runs the plant, which makes the other's cars. The agreement gives on access to the other's dealers to sell its brand of vehicles.

Joint Venture

25. A technology cycle occurs whenever there are major advances or changes in the ______ in a field of discipline.

Knowledge, tools, and techniques

67. Sodima is a French cooperative that owns the name, the trade secrets, and the patents on Yoplait yogurt. General Mills pays Sodima for the right to sell Yoplait yogurt in the United States. This is an example of ____.

Licensing

55. Under conditions of ______, a competitive attack by the stronger rival is more likely to produce sustained competitive advantage.

Low Resource Similarity

71. In terms of Hofstede's cultural differences, the people who are described as happy-go-lucky, are comfortable with an unstructured life and deal well with sudden changes have a _______.

Low degree of uncertainty avoidance

1. Who is primarily responsible for developing operational plans?

Lower-level managers

30. The Japanese government has proclaimed that its snow is different from that found in any other region of the world. As a result, all snow skis marketed in Japan must be manufactured in Japan. This is an example of a(n):

Nontariff Barrier

62. Which of the following approaches is aimed at changing large systems, small groups, or individuals?

Organizational Development

5. After earning $8 billion in profit, Royal Dutch/Shell decided to strive to double its profits within the next five years. Which classical management function would be instrumental in achieving this goal?

Planning

46. ____ are types of standing plans.

Policies and procedures

37. Starbucks is expanding its global operations into South America in spite of the real probability of civil wars and terrorist activities in many of the continent's nations. As Starbucks expands into South America, it must deal with _____.

Political uncertainty

65. The Japanese government continues to use the high tariffs to make sure local farmers can earn a living. The tariff on rice is an example of ____.

Protectionism

44. Neither Chile nor Peru has a mass-market café culture, but that fact has not stopped Starbucks from trying to determine what can be done to make its coffee houses successful in those markets. By recognizing that people in these two South American countries do not drink coffee like people in the United States and that they should change this habit, Starbucks has begun a _____ process with problem identification.

Rational decision making

53. In an attempt to stop declining profitability, ICI, a British chemical company, deleted petrochemical products from its production and concentrated on specialty chemicals, a less capital-intensive, less cyclical business. If ICI is successful in making the needed changes, it will more than likely implement a _____ strategy.

Recovery

11. The research on diversification in portfolio management indicates that the best approach is probably _______.

Related Diversification

59. Which of the following statements about resistance to change is true?

Resistance to change will always occur; it is inevitable

50. From a competitive standpoint, ______ means that the strategic actions your company takes can probably be matched by your direct competitors.

Resource Similarity

18. In an attempt to stop declining profitability, ICI, a British chemical company, deleted petrochemical products from its production and concentrated on specialty chemicals, a less capital-intensive, less cyclical business. What type of grand strategy was ICI using?

Retrenchment

17. According to strategic reference point theory, managers have two basic strategic alternatives. They are _______.

Risk-avoiding strategy and risk-seeking strategy

48. At a canning factory, new employees were instructed never to wear loose-fitting clothes when working around the canning machine. What kind of standing plan is described in this example?

Rules and regulations

3. _____ occurs when managers choose an alternative that is good enough, rather than the best possible alternative.

Satisficing

20. Unverferth Manufacturing makes agricultural equipment. It used finite element analysis (FEA) software to speed up the design cycle for its 12-row sub-soiler. Which aspect of the compression approach to innovation would the use of this software apply?

Shortening the time of individual steps

61. The use of milestones in the experiential approach to innovation _____.

Shortens the innovation process Provides structure to the general chaos that follows technological discontinuities Builds momentum by giving people a sense of accomplishment Lets an organization know when to take corrective action

4. _____ are a type of operational plan.

Single-use plans

29. The purpose of multifunctional teams is to ______.

Speed innovation through early identification of new ideas or problems that would typically not have been generated until much later

27. The goals of the compression approach to innovation are ______.

Speed, lower costs, and incremental change of a dominant design

52. Companies often choose a _____ strategy when their external environment doesn't change much or after they have struggled with periods of explosive growth.

Stability

54. Specialized Bicycle Components, Inc. introduced the first major production mountain bike in 1980. Two-thirds of its profits come from the sale of mountain bikes. Specialized bikes have a large share of a fast-growing market. According to the BCG matrix, specialized mountain bikes would be classified as _______.

Stars

45. Top management is responsible for developing long-term _____ that make clear how the company will serve customers and position itself against competitors in the next two to five years.

Strategic plans

9. A department store is experiencing greater than usual losses due to theft and management wants it stopped. Middle management decided to hire a security company to study the problem and develop the best plan for dealing with it. Middle management have implemented a(n) _____ plan.

Tactical

36. As Malta got ready for its admittance into the European Union (EU), the EU removed all taxes on the importation of goods manufactured in Malta. In other words, the EU abolished _____ for Malta-manufactured merchandise.

Tariffs

23. An innovation stream moves from one technology cycle to another through the process of _______.

Technological Substitution

60. _____ is the knowledge, tools, and techniques used to transform inputs into outputs.

Technology

57. Which of the following is a component of a creative work environment that encourages creativity?

The development of challenging work Organizational encouragement The granting of autonomy The removal of organizational impediments

68. One of the major questions that a company must typically answer about its future, once it has decided to go global is _______.

To what extent should the company standardize or adapt business procedures?

31. Several Arab countries boycott Coca-Cola products because the soft-drink company maintains product distributors in Israel. This boycott is an example of:

Trade barrier

10. Starbucks, the operator of Starbucks coffeehouses, also markets a line of compilation CDs and other non-coffee items. The making and marketing of the CDs and other non-coffee products would be an example of _______.

Unrelated Diversification

32. Ford Motor Company owns and operates a $1.9 billion manufacturing plant in Brazil. What method for organizing for global business has Ford used in this example?

Wholly Owned Affiliate

69. The trade agreement that represented the most significant change to the regulations governing global trade during the 1990s was _____.

World Trade Organization (WTO)

41. According to text, which of the following is a pitfall of planning?

A false sense of certainty based on faulty assumptions

70. When McDonald's entered into an agreement with a French entrepreneur who wanted to own and operate a McDonald's fast-food restaurant in Paris, McDonald's saw the new restaurant as an opportunity. Unfortunately, the restaurant in Paris was not maintained at the cleanliness standards prescribed by McDonald's (but acceptable to the cleanliness standards of the French). McDonald's brought legal action to have the restaurant closed. This example illustrates _______.

A problem with franchising in different cultures

66. ____ is used to assess how well managers and their families are likely to adjust to foreign cultures.

Adaptability Screening

49. In any organization, the ____ are less visible, internal decision-making routines, problem-solving processes, and organizational cultures that determine how efficiently inputs can be turning into outputs.

Core Capabilities

12. The term _____ refers to the overall organizational strategy that addresses the question "What business or businesses are we in or should we be in?"

Corporate-level strategy

35. The primary disadvantage of using wholly owned affiliates as the means of entering a foreign market is ______.

Costs

22. _____ are workplace cultures in which workers perceive that new ideas are welcomed, valued, and encouraged.

Creative work environments

74. Neither Chile nor Peru have a mass-market café culture, but that fact has not stopped Starbucks from engaging in ____ to determine how best to expand into those markets.

Decision Making

43. The ____ approach to decision-making is a method in which an individual or a subgroup is assigned the role of a critic.

Devil's Advocacy

26. ____ is the phase of a technology cycle characterized by technological substitution and design competition.

Discontinuous Change

16. Specialized Bicycle Components, Inc. introduced the first major production mountain bike in 1980. Two-thirds of its profits come from the sale of mountain bikes. It is recognized worldwide for its ability to design and produce superior mountain bikes. This ability is its ________.

Distinctive Competence

56. While the _____ are tangible, _____ are not.

Distinctive Competencies; Core Capabilities