Principles of Management Exam 2

The "most favored nation" trading status describes a condition in which a country grants other countries favorable trading treatment, such as the reduction of import duties.

true

The basic idea of a business that explains which customer needs will be met, how the functions and operations will be organized, and how money will flow in and out is called a business model.

true

The World Bank

provides low-interest loans to developing nations for improvements.

Those who manage the work on the front lines are most involved with what component of the planning process?

operational planning

The managerial tools for ________ include a SWOT analysis, forecasting, and VRIO analysis.

organizational assessment

Breyona, who owns an international investment firm that is headquartered in the United States, has witnessed the dangers of global economic interdependency. As she recently explained to her protégé, "In my opinion, ________ have been two negative effects of global economic interdependency for the United States."

other countries stealing U.S. technology and the loss of well-paying jobs in the United States

Airbus Inc., a company that builds airplanes, typically orders parts for its airplanes from other companies. ________ is the practice Airbus Inc. is using.

outsourcing

In a SWOT analysis, organizational strengths are

skills and capabilities that give a company advantages in executing its strategies.

________ is a trading bloc consisting of 27 trading partners in Europe.

European Union

A short-term goal usually spans ________ while a long-term goal typically spans ________.

12 months; 1 to 5 years

________ is another term for a defensive strategy.

A retrenchment strategy

Kumail initiated MBO in his company 12 months ago. Now, Kumail about to conduct his first-ever performance appraisals with his employees. Which of the following statements would you offer to Kumail as advice?

Be sure to reward employees who meet their objectives.

________ is the process by which a company compares its performance with that of high-performing organizations.

Benchmarking

According to Porter, the cost-focus and focused-differentiation strategies have what in common?

Both focus on narrow markets.

Pineapple Whip, a company that makes an ice cream-like treat using pineapple, sells its branding, production techniques, and proprietary flavors to other companies for a fee and a share of the profits. Pineapple Whip is engaged in

Franchising

Which of these is an example of a means-end chain?

Implementing a cleaning schedule to ensure all parts of the restaurant are deep cleaned each month is a means to earning the highest cleanliness rating during the next health inspection.

Which of the following satisfies the SMART goals criteria?

In the next quarter, our Tucson sales agent will increase sales by 10 percent.

Which of these describes the positive effects of a global economy?

Innovation and economies of scale allow services and products to be created more quickly and cheaply.

Over the last two years, an American clothing company has partnered with a manufacturer in China to make clothes at a cheaper cost. How is this mutually beneficial?

It is a strategic alliance in which companies from two different countries share the risks and rewards of a business endeavor. The alliance provides each company a partner with established operations in a country foreign to their own, which limits the risk for each company while also exposing them to the benefits (high consumer demand/spending in the US, low labor cost in China).

Manufacturing plants with low labor costs that give special privileges to their American owners in return for employing Mexican citizens are known as

Maquiladoras

Breyona keeps a close eye on her company's internal and external environments to identify better ways of doing business and to discover possible opportunities for new products. In which activity is Breyona engaged?

SWOT analysis

When thinking about interpersonal space, which country has the smallest average social distance?

United States

Which of these questions should be answered by your company's mission statement?

What are our major strengths and competitive advantages?

Executives, often referred to as the "C-Suite," should focus their decision making on which of the following?

What products and services shall we offer?

You have an idea for a company that sources fruits from local farms to make fresh juices that will be sold on a subscription-based service to households within a 100-mile radius. How will you know if your company has a sustainable advantage?

You will produce and deliver juice more effectively than competitors.

A company is licensing its products when it

allows a foreign company to pay it a fee to make or distribute the first company's product or service

Managers can use the VRIO framework to

analyze a firm's competitive potential.

Bruno knows that one of the reasons people do not return to his home appliance store is because of the slow service. How would a SWOT analysis classify the slow service at Bruno's store?

as a weakness

Zene is a chef and owner of a popular restaurant. Zene frequently visits competing restaurants to observe how they are doing things. He told one of his managers, "I eat dinner at a lot of restaurants because I want to know what is going on. I am always concerned that one of our competitors will surprise us with a new service or menu item, like ours but better." In which activity is Zene engaging?

assessing current reality

Countertrading is ________ goods for goods.

bartering

For organizational goal setting to be effective, goals must

be applied organizationwide.

The BCG matrix is a means of evaluating strategic business units based on their

business growth rates and share of the market

An organization's ________ expresses the need the firm will fill, the operations of the business, its components and functions, and the expected revenues and expenses.

business model

In the BCG matrix, Kroger would be in the category of ________ due to being the largest retailer in the relatively stable grocery market.

cash cows

Great systems of ________ are the hallmark of great civilizations.

communications

After reviewing her department's results, Laurel decided that she needed to cut more costs for the department to meet its profitability goal for the year. Eliminating the unplanned advertising expenses is one way to

correct deviations in the plan being carried out.

When organizations endeavor (1) to keep their costs (and hence the prices of their products or services) below those of competitors and (2) to target a wide market, they are utilizing a ________ strategy.

cost leadership

To maximize profitability and competitiveness, firms must

create alignment across all levels of strategy.

A local gymnastics studio offers dance, tumbling, trampolines, and competitive cheer training for kids of all ages. To recruit students for these lessons, the studio also hosts birthday parties, afterschool care, and swim lessons. These offerings interact to

create fit among the activities

Lillian moved from Iowa to New Zealand for work. Within a couple weeks, Lillian noticed that she needed much more sleep and was persistently feeling uncomfortable and disoriented because she was experiencing

culture shock

At the strategic level of planning, managers must pay attention to the environment outside the organization, be future oriented, and

deal with uncertain and competitive conditions

When the university's provost sets a major student retention goal, the cascading-goals process would occur if the

deans set retention objectives for their colleges and schools.

Over the course of 40 years, Bradley grew his company to six package shipping stores. With his retirement approaching and increased competition from national brands, he decided to reduce the number of locations to two. Bradley's closing of four locations represents a

defensive strategy.

During the Cold War, the United States had a(n) ________ with anyone importing Cuban cigars and sugar.

embargo

In order, the steps of the strategic-management process are

establish the mission, vision, and values statements; assess the current reality; formulate the grand strategy; implement the strategy; and maintain strategic control.

A major U.S.-based commercial construction firm has established operations in Belize. Wyatt has been managing the Belizean operations for several months, and is perplexed as to why the workers arrive late, take long lunches, and leave early on Wednesdays. He begins requiring employees to punch in and out on a time clock. Wyatt's decision to utilize a time clock, something common in U.S. workplaces, may signal that he is a(n) ________ manager.

ethnocentric

How often should a company revise its strategic plan?

every 1-2 years

Jalen, a geologist from Arkansas who works for Murphy Oil, has decided to transfer to one of Murphy Oil's offices in Saudi Arabia. Jalen will be a(n) ________ while living in Saudi Arabia.

expatriate

Executive Office Supply, a small family-owned company, sells high-priced desks, some as expensive as $10,000, to executives in its area. Very few companies have chosen to market this product, and Executive Office Supply has enjoyed record profits over the last 25 years. Because Executive Office Supply is a small, successful company, you would advise them not to utilize strategic planning.

false

Mariam, a teacher, is interested in helping children in other countries learn how to read. She has formed an international nonprofit organization, Read to the World, whose employees travel to South America to donate books and work in schools as tutors. Read to the World is an example of a multinational corporation.

false

NAFTA was a trading bloc consisting of the United States, Canada, Panama, and Mexico.

false

When Zappos.com says it aims "to simultaneously deliver happiness to customers, employees, vendors, shareholders, and the community," it is stating its code of ethics.

false

Duracell, a company well-known for manufacturing alkaline batteries, derives its strategic position from which source?

few needs, many customers

Operational planning should be completed by ________, and tactical planning is done by ________.

first-line managers; middle managers

Based on the text, many companies are interested in expanding globally in order to

gain access to supplies, new markets, and lower labor costs.

Bahir's ________ is to sell 80% of his old merchandise prior to ordering more inventory from the wholesaler.

goal

Growth, stability, and defensive strategies are common ________ strategies.

grand

A forecast is a

projection for the future

The United States limits the amount of cheese purchased from other countries; this is an example of a(n)

import quota

Sometimes a country's laws forbid foreigners from owning a business in the nation. In the presence of such laws, a(n) _____ is one way for an American company to have a presence in that foreign country.

joint venture

The GLOBE project is an ongoing cross-cultural investigation of nine cultural dimensions involved in ________ processes.

leadership and organizational

When managers apply the continuous feedback loop known as the planning/control cycle, which management functions are implied?

leading and organizing

The process for motivating employee performance in which the manager and employee jointly set objectives for the employee, the manager develops action plans, the manager and employee periodically review the employee's performance, and the manager makes a performance appraisal and rewards the employee according to the results achieved is known as

management by objectives

A(n) ________ links low-level goals, such as providing free estimates within 24 hours, to higher-level goals, such as decreasing the cost of customer acquisition.

means-end chain

Kickstarter, a global crowdfunding platform, states that its purpose as an organization is "to help bring creative projects to life." This is the company's

mission statement

The World Trade Organization (WTO)

monitors and enforces trade agreements.

Fresh Toppings is based in Sacramento, California and has restaurants in 25 countries. In the United States, Fresh Toppings would be viewed as which of the following?

multinational corporation

Michael Porter proposed that business-level strategies originate with the primary competitive forces in the firm's environment; these forces are the threats of

new entrants, substitute products or services, bargaining power of suppliers and buyers, and competitive rivalries.

________ can be another term used for a goal.

objective

Globalization is the trend

of the world economy toward becoming a more interdependent system

As factory supervisor, Miguel wants all 150 workers to complete a required training before the end of the fiscal year which is one month away. He sets a goal of training 15 workers each day. What is Miguel doing?

planning

Knowing the future is uncertain, Sofia should engage in ________ so her family's business will have a set of goals and tasks that should lead to desired outcomes.

planning

The three levels of ________ are strategic, tactical, and operational.

planning

To ensure that his plans are moving his company in the right direction, Joaquin can apply a

planning/control cycle

CorrectTalk is a company that provides security and communications technology to jails and prisons. Over the last several months, CorrectTalk's profits have dropped and the company seems to be moving in the wrong direction. The owner recognizes that he wrongly assumed that his clients would need more technology and that his installation teams frequently have internal conflict. These issues are a result of

poor planning

A SWOT analysis is a

search for the strengths, weaknesses, opportunities, and threats affecting an organization.

Managers can use an operating plan to

segment strategic goals into short-term targets.

In the BCG matrix, ________ are companies that have high growth and high market share, and are definite keepers.

stars

Which sequence of goals is consistent with "cascading" goals that begin at the top of the organization?

strategic goals > divisional goals > department goals > individual goals

After establishing values statement, what is the next step in planning?

strategic planning

The three key principles of ________ are the creation of a unique and valuable position, trade-offs in competing, and creating a "fit" among activities.

strategic positioning

The CEO of Alliance Manufacturing said to her new vice president of finance, "In the past, I had resistance to new ideas by employees who felt that our plans threatened their influence or their jobs. So, when you tell your collections department that we just hired a collection agency to handle bad debt, you may have to sell your collections manager and his associates on using the agency. You should emphasize the fact that nobody is going to be laid off." Selling middle and supervisory managers on changes to overcome their resistance is often a necessary part of

strategy implementation.

Managers who redo budgets, rethink processes, or revise policies are

taking corrective action, which will constitute a feedback loop.

Prior to 1990, the United States imposed a tax, known as a(n) ________, on automobiles imported from Mexico.

tariff

A nation's culture is

the shared set of beliefs, values, knowledge, and patterns of behavior common to its people.

An import quota is a(n) ________ that limits ________.

trade barrier; the numbers of a product that can be imported

The United States often engages in ________, which is the use of government regulations to limit the import of goods and services and to protect U.S. industries against foreign competition.

trade protectionism

With the holiday season approaching, Denelle reviews holiday sales from the last five years to determine how much inventory to purchase and how many employees to schedule during peak sales times. Denelle is conducting a

trend analysis

Jamir's Diner is a popular café that specializes in home-cooked meals, friendly service, and a menu that contains vegan and vegetarian dishes (menu items that no other restaurant in the area offers). Jamir's Diner is engaging in strategic positioning by offering the unique menu items of vegan and vegetarian dishes.

true

Mateo, a florist, recently learned about strategic management and wants to implement this process for his flower shop. Mateo should begin by establishing mission, vision, and values statements.

true