Knowledge Checks

In the process of interpersonal communication, the sender's translation of ideas to words is known as (A) encoding (B) decoding (C) feedback (D) empathy

(A) encoding

are able to exercise the greatest degree of discretion in the (A) promulgation of internal policies (B) settlement of legal disputes (C) restructuring of outstanding loans (D) compliance with federal regulations

(A) promulgation of internal policies

The long-run trend in international trade as formalized in the North American Free Trade Agreement (NAFTA) and the General Agreement on Tariffs and Trade (GATT) agreements is the (A) reduction of trade barriers of all types (B) movement of trade barriers from tariffs to quotas (C) development of trade barriers for countries and firms outside the agreements (D) reduction of trade between trading blocs and improvement of trade within trading blocs

(A) reduction of trade barriers of all types

In marketing research, a firm might consider using secondary data over primary data because (A) secondary data are usually cheaper (B) secondary data are usually more accurate (C) primary data are usually nonspecific (D) primary data are likely to be outdated

(A) secondary data are usually cheaper

On May 31, Company O's general ledger shows a cash balance of $5,123. The May 31 bank statement shows a balance of $4,905. Other information is available as follows. 1. A May 31 deposit of $300 does not appear on the bank statement; but a $3 service charge does. 2. A customer's $40 insufficient funds (nsf) check has been returned with the bank statement. 3. Outstanding checks of $10, $15, and $100 are identified on May 31. What is the correct cash balance on May 31 ? (A) $4,905 (B) $5,080 (C) $5,166 (D) $5,205

(B) $5,080

In marketing, postpurchase evaluation of the alternatives in order to support the buyer's choice is often used to reduce (A) perceived risk (B) cognitive dissonance (C) consumer anxiety (D) brand stereotyping

(B) cognitive dissonance

14. Within the context of the Capital Asset Pricing Model (CAPM), the risk measure known as beta is often computed by regressing the return of the company's stock against the (A) return on the company's bonds (B) return on the stock market (C) change in the gross domestic product (D) change in the consumer price index

(B) return on the stock market

Dreamland Pillow Company sells the "Old Softy" model for $20 each. One pillow requires two pounds of raw material and one hour of direct labor for manufacture. Raw material costs $3 per pound and direct production labor is paid $4 per hour. Fixed supervisory costs are $2,000 per month and Dreamland rents its factory on a five-year lease for $4,000 per month. All costs are considered costs of production. Another firm has offered to produce "Old Softy" pillows and sell them to Dreamland for $12 each. Dreamland cannot avoid the factory lease payments, but can avoid all labor costs if it does not produce these pillows. Under these conditions, how many "Old Softy" pillows must Dreamland sell to earn monthly gross profits of $1,000 ? (A) 417 (B) 500 (C) 625 (D) 875

(C) 625

Which of the following statements about a systems flowchart is true? (A) It is used in systems design to define and describe each piece of data. (B) It is a method of writing programs using only three basic constructs: sequence, selection, and repetition. (C) It documents the sequence of processing steps that take place in an information system. (D) It documents the logical design of an information system.

(C) It documents the sequence of processing steps that take place in an information system.

Goods such as magazines and candy that are purchased with a minimum of shopping effort by consumers are defined as (A) durable goods (B) shopping goods (C) convenience goods (D) specialty goods

(C) convenience goods

A project consists of 150 jobs. The expected completion time for each job is given in days. The project has three critical paths with two jobs in common, J and K. In order to finish the project one day early, the completion time should be reduced one day for (A) each of the 150 jobs (B) each of the jobs on the three critical paths (C) either Job J or Job K (D) both Job J and Job K

(C) either Job J or Job K

The term "net working capital" refers to (A) inventories, receivables, and short-term notes and investments (B) assets divided by liabilities (C) short-term assets less short-term liabilities (D) net assets left over

(C) short-term assets less short-term liabilities

Dreamland Pillow Company sells the "Old Softy" model for $20 each. One pillow requires two pounds of raw material and one hour of direct labor for manufacture. Raw material costs $3 per pound and direct production labor is paid $4 per hour. Fixed supervisory costs are $2,000 per month and Dreamland rents its factory on a five-year lease for $4,000 per month. All costs are considered costs of production. How many pillows must Dreamland produce and sell each month to earn a monthly gross profit of $1,000 ? (A) 300 (B) 350 (C) 600 (D) 700

(D) 700

All of the following are true of the Federal Reserve system in the United States EXCEPT: (A) It is divided into twelve Federal Reserve districts. (B) It holds deposits (or reserves) of member banks. (C) It provides facilities for check clearance. (D) It includes all commercial banks as members.

(D) It includes all commercial banks as members.

Which of the following statements about the tort of negligence is true? (A) It cannot be used as a basis for liability for defective products. (B) It is a strict liability tort with no defenses. (C) It requires proof of some intentional conduct. (D) It requires proof of breach of a statutory or common-law duty.

(D) It requires proof of breach of a statutory or common-law duty.

Which of the following statements is true of corporate strategy? A) A corporate strategy must be able to create synergies across business units that are quite different. B) Formulating a corporate strategy involves general managers answering questions relating to how to compete in order to achieve superior performance. C) Deciding whether to adopt a differentiation or a cost-leadership strategy is part of formulating the corporate strategy. D) The objective of corporate-level strategy is to ensure that the sum of the values of individual business units is greater than the overall corporate value.

A) A corporate strategy must be able to create synergies across business units that are quite different.

Tommy wants to open his own food truck but doesn't know anything about business. He needs help determining who his competition is, how he should craft his strategy to compete and how he'll implement his strategy to achieve a competitive advantage. He's hired you to help him get started. As a result, you know that you will probably use the A) AFI strategy framework. B) Six Sigma tool. C) Stakeholder Impact analysis. D) business model analysis.

A) AFI strategy framework.

Understanding the Resource Allocation Process (RAP) will have large effects on shaping a firm's realized strategy. Which of the following is an example of such an allocation of resources? A) Intel's rule to "maximize margin-per-wafer-start" B) Teach For America's mission statement C) Merck's voluntary withdrawal of Vioxx from the market D)Starbucks' launch of iced drinks

A) Intel's rule to "maximize margin-per-wafer-start"

When the strong dictatorial rule in Arlington unexpectedly collapsed due to the shocking death of the royal family in an explosion, the nation's economy experienced drastic changes. The laws became more restrictive, the country lost many locally produced resources and products, and the distribution of wealth became inequitable. The unexpected event that led to these changes can best be described as a(n) ________ event. A) black swan B) miracle C) wild card D) extinction

A) black swan

All of the following are external stakeholders except which of the following? A) competitors B) creditors C) customers D) alliance partners

A) competitors

The management of Venture Manufacturing showed a commitment to ________ by increasing the salary of many female employees to meet its goal of having equal pay for women and men who perform comparable work. A) organizational core values B) upper-echelons theory C) product-oriented vision D) scenario planning

A) organizational core values

Which of the following strategies does Tesla need to implement or achieve to gain a competitive advantage? A) reinvest profits to build successively better electric automobiles B) imitate the features of the most popular SUVs on the market C) substitute less-expensive components to keep costs low D) sell advertising space on their cars' digital displays

A) reinvest profits to build successively better electric automobiles

Which of the following is a customer-oriented vision? A) to enable businesses to improve their employee communications B) to be the best automobile company in the world C) to be the most progressive insurance company D) to manufacture innovative products through continuous learning

A) to enable businesses to improve their employee communications

Jill is interested in the concept of strategy and decides to create her own. As a result, Jill says that her strategy is to focus on growth and marketing to achieve competitive advantage. How would you evaluate Jill's statement? A) Jill should reevaluate her statement because it fails to mention human resources and finance. B) Jill should reevaluate her statement because it fails to meet the principles of what a strategy should be. C) Jill's strategy makes sense and she should move forward with it. D) Jill's strategy reveals a clear strategic position and tradeoff, so she should proceed.

B) Jill should reevaluate her statement because it fails to meet the principles of what a strategy should be.

Underperformance relative to other firms in the same industry or the industry average results in a(n) ________ for a firm. A) sustainable competitive advantage B) competitive disadvantage C) increased power distance D) diseconomies of scope

B) competitive disadvantage

Which of the following is typically an economic responsibility of a firm? A) donating resources, in terms of money and time, toward community development B) paying adequate returns to the firm's stockholders on the capital invested by them C) sourcing raw materials from highly developed countries D)helping a nation increase its import of goods and services

B) paying adequate returns to the firm's stockholders on the capital invested by them

The former CEO of Sam's Club, a division with its own profit-and-loss responsibility, Rosalind Brewer, reported to Walmart's CEO, C. Douglas McMillon, who as corporate executive oversees Walmart's entire operations. Sam's Club, therefore, is a ________ of Walmart. A) corporate partner B) strategic business unit C) house brand manufacturer D) branch office

B) strategic business unit

BuyNow Inc. is an e-commerce retail firm that sells a variety of merchandise online. Through services like cash on delivery, easy return, and online tracking, the company has created more customer value than its competitors (brick-and-mortar businesses) at the same price. Also, the company's costs are substantially lower than its competitors because of minimal investments in operation and administration. In this scenario, BuyNow Inc. has most likely been able to provide superior value and cost control through A) strategic profiling. B) strategic positioning. C) strategic parity. D) strategic liquidation.

B) strategic positioning.

Which of the following stages in the AFI strategy framework involves designing a business, corporate, and global strategy? A) strategy implementation B) strategy formulation C) strategy analysis D) strategy control

B) strategy formulation

Which of the following is an example of competitive parity? A) A firm provides wall clocks that its consumers value more than other wall clocks. B) A firm sells wall clocks at a lower price than its competitors. C) A firm produces a similar number of wall clocks at a similar cost as its competitors. D) A firm manufactures higher-quality wall clocks than its competitors.

C) A firm produces a similar number of wall clocks at a similar cost as its competitors.

Organizational values help individuals make choices that are A) legal but unethical. B) ethical but ineffective in achieving long-term success. C) both ethical and effective in advancing a company's goals. D) both illegal and effective.

C) both ethical and effective in advancing a company's goals.

Strategies developed at the departmental level, such as the accounting, human resources, production, and marketing departments, within a strategic business unit are referred to as ________ strategies. A) corporate B) business C) functional D) grand

C) functional

Dora's Supplies manufactures medical devices. The firm's profitability depends on several variables that are subject to occasional change, including the cost of parts and labor, changes in medical practices, and the price of oil used in both manufacturing and shipping. To account for the potential impact of changes to any of these variables, Dora's Supplies managers should implement a(n) ________ approach. A) strategic business units B) upper-echelon C) scenario planning D) top-down strategic planning

C) scenario planning

How is competitive advantage different from competitive parity?

Competitive advantage is where a company achieves above average results and possibly even surpasses it's competition. Competitive parity is where a company achieves standard or average results in comparison to it's competitors.

Organizational values help people make choices that are ethical and company-goal-oriented. These values answer which strategic management question? A) What is the best way to compete in the industry? B) What do we want to accomplish as a company? C) What are we about as a firm compared to our competitors? D) How do we accomplish our goals in the organization?

D) How do we accomplish our goals in the organization?

Brandon is part of a sales team. He effectively coordinates his tasks with others in the team and willingly contributes to their efforts in achieving the team's objectives. Thus, Brandon is in ________ of the Level-5 leadership pyramid. A) Level 3 B) Level 4 C) Level 5 D) Level 2

D) Level 2

Writer Button Inc. and Horner Inc. are two companies that have been manufacturing typewriters for almost 30 years. Due to the reduced demand for typewriters today, both companies' average return on invested capital is approximately -5 percent. The current industry average is 2 percent. In this scenario, Writer Button Inc. and Horner Inc. most likely have A) strategic alliance with each other. B) economies of scope instead of economies of scale. C) competitive advantage over other firms in their industry. D) competitive parity with each other.

D) competitive parity with each other.

Homestyle is a company that manufactures and sells home furniture. It sources its materials from another country to keep costs low. An assembly line worker in one of its manufacturing centers noticed that there was increasing concern regarding the potential toxicity of the flame-resistant materials used in the furniture. In response, she compiled a list of nontoxic flame-resistant materials that the company could use. When her manager learned about this, he presented the prospect and got it approved from the top management team. This is an example of the A) top-down strategic planning approach. B) scenario planning process. C) reverse engineering process. D) planned emergence approach.

D) planned emergence approach.

Dimitre Corp. has been able to gain and sustain a competitive advantage due to its strong relationship with its employees, customers, suppliers, and local communities. The company believes in lifetime employment and ensures that its employees grow along with the company. Investors are more than satisfied with the returns on their investments. Also, 3 percent of the company's profit is spent on community development. With initiatives like these, customers feel privileged to associate themselves with Dimitre products. This scenario best illustrates the implementation of a A) strategic analysis. B) black swan event. C) wild card event. D) stakeholder strategy.

D) stakeholder strategy.