MGMT 478 - EXAM ONE

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In an IFE​ Matrix, the weights of all factors included must add up to​ ______.

1.0

The weight column in an EFE Matrix must add up to what​ number?

1.0

The range of total weighted scores in a CPM Matrix is​ ______.

1.0 to 4.0

The recommended length of a mission statement is fewer than​ _____ words.

100

In an IFE​ Matrix, how much more important is a weight of 0.16 than a weight of​ 0.07?

129 percent

In an EFE​ Matrix, the average total weighted score​ is:

2.5

How many key external factors should be included in an EFE​ Matrix?

20

Spending on digital advertising recently surpassed television advertising and is expected to reach nearly​ ______ billion dollars in 2020.

280

Regarding the AQCD​ criteria, strive to include all high quality factors in an external assessment for a firm. A high quality factor will meet​ ______ of the AQCD​ criteria; a low quality factor will meet​ ______ of the AQCD criteria.

3 or​ 4; 2 or fewer

Most practitioners and academicians of strategic management feel that an effective statement should include​ ______ mission statement components.

9

When should a vision statement reveal the type of business in which the firm​ engages?

Always

Which statement​ FALSE?

An outside person with expertise in developing vision and mission statements who has unbiased views should always manage the​ statement-development process.

Aspects of organizational culture listed in Table​ 4-4 include all but which of the​ following?

Analyze interest rate trends

Which of the following statements is​ FALSE?

Apple​ Computer's mission statement should open the possibility for diversification by Apple into pesticides.

Which question is NOT answered in an effective mission​ statement?

Are the​ firm's profits​ adequate?

The CEO of LinkedIn is Jeff​ Weiner, a highly respected corporate leader. What does Weiner say is the most important philosophy of a great​ leader?

Be clear about the​ organization's vision.

According to Vern​ McGinnis, a mission statement should do​ what?

Be limited enough to exclude some ventures and broad enough to allow for creative growth

​_________ is a business technique that involves using software to mine huge volumes of data to help executives make decisions.

Business analytics

What​ characteristic(s) are included among the 5 out of 5 test for vision statements to be​ exemplary?

Clear and unique

An advantage of a strong dollar includes which of the following​ item(s)?

Companies importing goods have greater buying power because their dollars now go further overseas.

Which statement below is​ FALSE?

Companies should pay dividends regardless of changes in their revenue.

All elements of the strategic planning process can change over time except one element that almost never changes. What is that​ element?

Core value statement

Which of the following activities is included in strategy​ implementation?

Develop a​ strategy-supportive culture and create an effective organizational structure.

What is often considered the first step in strategic​ planning?

Developing a vision statement

When comparing mission statements of rival​ firms, perhaps the most important component to examine is​ what?

Distinctive competence

According to the​ chapter, a pitfall to watch for and avoid in strategic planning​ is:

Doing strategic planning only to satisfy accreditation or regulatory requirements

TRUE

During the process of developing vision and mission​ statements, some organizations use discussion groups of managers to develop and modify existing statements. The process of developing a mission statement should create an​ "emotional bond" and​ "sense of​ mission" between the organization and its employees.' Mission statements should include the 9 components. Vision statements should pass the 5 out of 5 test.

​______ is the act of strengthening​ employees' sense of effectiveness by encouraging them to participate in decision making and to exercise initiative and​ imagination, and then rewarding them for doing so.

Empowerment

External audits attempt to identify key variables that offer highly intuitive responses.

False

The most effective strategic management is​ ritualistic, predictable, and formal.

False

Limitations of financial ratio analysis include all but which one of the following​ statements?

Financial ratios are estimates of financial condition.

What is the first step in designing an External Factor Evaluation​ (EFE) Matrix?

Identifying key external factors

Which of the following statements is​ TRUE?

If a firm possesses many​ highly-weighted strengths, this is likely the result of effective​ strategies, so higher ratings in general are warranted for strengths.

The bargaining power of consumers can be the most important force affecting competitive advantage. Consumers gain increasing bargaining power under the following​ circumstance:

If consumers are particularly important to the seller

In developing an IFE​ Matrix, what is an important​ guideline?

Include factors that are​ actionable, quantitative,​ comparative, and divisional​ (AQCD) to the extent possible.

Which statement best describes​ intuition?

It should be coupled with analysis in decision making.

Which of the following statements is​ TRUE?

Just because one firm receives a 3.20 overall rating and another receives a 2.80 in a​ CPM, it does not necessarily follow that the first firm is precisely​ 14.3% better than the​ second, but it does suggest that the first firm is better in some areas.

FALSE

Just because one firm receives a 3.20 overall rating and another receives a 2.80 in a​ CPM, it does not necessarily follow that the first firm is precisely​ 14.3% better than the​ second, but it does suggest that the first firm is much better in many areas. Just because one firm receives a 3.20 overall rating and another receives a 2.80 in a​ CPM, it does not necessarily follow that the first firm is precisely​ 12.5% better than the​ second, but it does suggest that the first firm is better in some areas. When one firm receives a 3.20 overall rating and another receives a 2.80 in a​ CPM, it follows that the first firm is precisely​ 14.3% better than the second. Just because one firm receives a 3.20 overall rating and another receives a 2.80 in a​ CPM, it follows that the first firm is precisely​ 12.5% better than the​ second, and that the first firm is better in some areas.

Which of the following is listed in the chapter as a reason often given for poor or no strategic planning in a​ firm?

Laziness

Lorsch found that executives in successful companies are emotionally committed to the​ firm's culture, but he concluded that culture can inhibit strategic management in the following​ way:

Managers frequently miss the significance of changing external conditions because they are blinded by strongly held beliefs.

External forces can be divided into five broad categories and ten subareas EXCEPT in which of the​ following?

Marketing

The basic activities that comprise marketing include the​ following:

Marketing research and target market analysis

Which of the following best describes the​ vision, "To become the best retailing firm in the​ USA"?

Much too broad

In terms of growing globally by adding new​ customers, what company does the global Capsule 3 suggest may be the fastest growing​ company?

Netflix

In developing an IFE​ Matrix, when can both internal and external factors be​ included?

Never

Does including the word​ "customer" in a mission statement ensure the statement includes the customer​ component?

No

The Industrial Organization view of strategic planning advocates that external​ (industry) factors are more important than internal ones for gaining and sustaining competitive advantage. Do the authors​ agree?

No. Matching key external opportunities and threats with key internal strengths and weaknesses provides the basis for successful strategy formulation.

​___________ captures the​ subtle, elusive, and largely unconscious forces that shape a workplace.

Organizational culture

If included in a mission​ statement, the​ phrase, "We follow the golden rule in all that we​ do" would satisfy what​ component?

Philosophy

​______ is the process by which a person determines whether to attempt a​ task, works out the most effective way of reaching desired​ objectives, and prepares to overcome unexpected difficulties with adequate resources.

Planning

According to Michael​ Porter, the nature of competitiveness in a given industry includes what​ force?

Potential development of substitute products and bargaining power of consumers

Why are both profit and vision needed to motivate a workforce​ effectively?

Profit is viewed negatively by some stakeholders of a firm.

The AQCD test refers to the need for key external factors to exhibit what​ attributes?

Quantitative and divisional

Which of the following statements is​ FALSE?

Regarding weights in a CPM or EFE​ Matrix, be mindful that 0.08 is mathematically 25 percent higher than​ 0.06, so even small differences can reveal important perceptions regarding the relative importance of various factors.

TRUE

Regarding weights in a CPM or EFE​ Matrix, be mindful that 0.08 is mathematically 33 percent higher than​ 0.06, so even small differences can reveal important perceptions regarding the relative importance of various factors. Critical success factors in a CPM include both internal and external​ issues; therefore, the ratings refer to strengths and​ weaknesses, where 4​ = major​ strength, 3​ = minor​ strength, 2​ = minor​ weakness, and 1​ = major weakness. The weights and total weighted scores in both a CPM and an EFE have the same meaning. The ratings in a CPM refer to strengths and​ weaknesses, where 4​ = major​ strength, 3​ = minor​ strength, 2​ = minor​ weakness, and 1​ = major weakness.

Which of the following statements is​ TRUE?

Regardless of the number of key opportunities and threats included in an EFE​ Matrix, the highest possible total weighted score for an organization is 4.0 and the lowest possible total weighted score is 1.0.

FALSE

Regardless of the number of key opportunities and threats included in an EFE​ Matrix, the highest possible total weighted score for an organization is 8.0 and the lowest possible total weighted score is 1.0. Regardless of the number of key opportunities and threats included in an EFE​ Matrix, the highest possible total weighted score for an organization is 10.0 and the lowest possible total weighted score is 0.0. Regardless of the number of key opportunities and threats included in an EFE​ Matrix, the highest possible total weighted score for an organization is 4.0 and the lowest possible total weighted score is 0.0. Opportunities and threats can be external or internal.

According to Michael​ Porter, the nature of competitiveness in a given industry can be viewed as a composite of the forces. Which force is usually the most​ powerful?

Rivalry among competing firms

In developing an IFE​ Matrix, do not allow more than 30 percent of the key factors to be financial ratios.​ Why?

Since financial ratios are generally the result of many​ factors, knowing what particular strategies should be considered based on financial ratios is difficult.

TRUE

Some companies develop mission statements simply because owners or top management believe it is fashionable to do so rather than out of any real commitment. Firms establish their vision and mission before their objectives in doing strategic planning. Managers at Johnson​ & Johnson​ (J&J) meet regularly with employees to​ review, reword, and reaffirm the​ firm's vision and mission. Some strategists spend almost every moment of every day on administrative and tactical​ concerns, ignoring the importance of a clear mission.

The term strategic planning is used synonymously in this text with what other​ term?

Strategic management

​_____ is the science of planning and directing​ large-scale military​ operations, of maneuvering forces into the most advantageous position prior to actual engagement with the enemy.

Strategy

Which statement below is​ FALSE?

The average IFE Matrix score is 2.0.

TRUE

The benefits of paying dividends to investors must be balanced against the benefits of internally retaining​ funds, and there is no set formula on how to balance this​ trade-off. Companies today are aggressively boosting their dividends paid to shareholders. Dividends are sometimes paid out even if the funds could be better reinvested in the​ business, and/or even if the firm has to obtain outside sources of capital to pay for the dividends. Dividends are sometimes paid out even when the firm has incurred a negative annual net income.

Recent research by Rose and Cray examined the​ strategic-management process and concluded that perhaps the most important​ "activity" is​ what?

The feedback loop

An example of an economic variable is​ "value of the ​dollar"—which is currently high—compared with the​ Yen, Euro, and the Australian dollar. The high dollar results in what economic​ factor(s)?

The high dollar makes U.S. goods more expensive in overseas markets.

According to James Van​ Horne, the basic activities of​ finance/accounting consist of three decisions. What are the​ three?

The investment​ decision, the financing​ decision, and the dividend decision

TRUE

The ratings in a CPM refer to strengths and​ weaknesses, where 4​ = major​ strength, 3​ = minor​ strength, 2​ = minor​ weakness, and 1​ = major weakness. The weights and total weighted scores in both a CPM and an EFE have the same meaning. Critical success factors in a CPM include both internal and external​ issues; therefore, the ratings refer to strengths and​ weaknesses, where 4​ = major​ strength, 3​ = minor​ strength, 2​ = minor​ weakness, and 1​ = major weakness. Avoid assigning the same rating to firms included in a CPM analysis.

A​ meta-analysis of 20 years of empirical research on mission statements came to what​ conclusion?

There is a positive relationship between mission statements and measures of financial organizational performance.

Which of the following statements is​ TRUE?

There is no one best mission statement for a particular organization.

In​ general, what happens to American goods in overseas markets when there is a strong​ dollar?

They are more expensive.

Which of the following statements is​ FALSE?

The​ resource-based view​ (RBV) approach to competitive advantage contends that internal resources are equally important for a firm as external factors in achieving and sustaining competitive advantage.

TRUE

The​ resource-based view​ (RBV) approach to competitive advantage contends that internal resources are more important for a firm than external factors in achieving and sustaining competitive advantage. In contrast to the Industrial Organization​ (I/O) theory presented in the previous​ chapter, proponents of the RBV​ view/theory contend that organizational performance is primarily determined by internal resources. ​Resource-based view theory asserts that resources are actually what helps a firm exploit opportunities and neutralize threats. Empirical research by Neffke reveals that more than any other variable in the​ firm's value​ chain, it is the nature of a​ firm's human capital that impacts that​ firm's choice of diversification targets.​ Specifically, firms select acquisition targets that offer opportunities to leverage existing human resources.

Unskilled leaders work out their conflicts in courtrooms and battlefields. Brilliant strategists rarely go to battle or to court. How do they usually achieve their​ objectives?

Through tactical positioning well in advance of any confrontation

King and Cleland recommend that organizations carefully develop a written mission statement in order to reap which​ benefit?

To provide a basis for the allocation of resources

​Generally, in​ war, the best policy is to take a state intact rather than to ruin it.​ Likewise, the best objective is to capture the​ enemy's army,​ regiment, company, or squad intact rather than destroy them. Winning 100 victories in 100 battles is not the epitome of skill. What is the epitome of​ skill?

To subdue the enemy without fighting

Which of the following is NOT a reason given for poor or no strategic planning in an​ organization?

Trust of management makes it unnecessary

What source provides excellent online information and advice on approximately​ 1,700 stocks, more than 90​ industries, the stock​ market, and the​ economy, including company income statements and balance​ sheets?

Value Line Investment Survey

Who​ said, "Perfection is not attainable. But if we chase​ perfection, we can catch​ excellence"?

Vince​ Lombardi, Head Coach Green Bay Packers ​(1959-​67)

Which statement is​ FALSE?

Vision statements are more important than mission statements.

Regarding vision​ statements, which statement below is​ FALSE?

Vision statements should answer the question​ "What is our​ mission?"

Which of the following illustrates the​ self-concept component of a mission​ statement?

We are committed to leapfrogging ongoing competition within​ 1,000 days by unleashing the constructive and creative abilities and energies of each of our employees.

Asking the​ question, ______ is synonymous with​ asking, "What is our​ mission?"

What is our​ business?

TRUE

When a key internal factor is both a strength and a​ weakness, the factor may be included twice in the IFE Matrix with a weight and rating assigned to each statement. IFE ratings are​ company-based whereas weights are​ industry-based In an IFE​ Matrix, the number of factors has no effect on the range of total weighted scores because the weights always add up to 1.0. Always sequence factors in an IFE Matrix from highest to lowest weight.

Which of the following statements is​ TRUE?

When assigning weights and ratings in developing an IFE​ Matrix, focus on a narrow industry perspective.

According to​ Drucker, what is the best time to​ ask, "What do we want to​ become?" and​ "What is our​ business?"

When the firm is successful

According to the model used in this​ text, what should be answered when developing a strategic​ plan?

Where are we​ now, where do we want to​ go, and how are we going to get​ there?

Which of the following statements is​ TRUE?

Wild guesses should never be made in formulating​ strategies, but reasonable assumptions based on available information must always be made.

FALSE

Wild guesses should never be made in formulating​ strategies, but reasonable assumptions based on available information must oftentimes be made. Wild guesses should rarely be made in formulating​ strategies, but reasonable assumptions based on available information must usually be made. Wild guesses should sometimes be made in formulating​ strategies, and reasonable assumptions based on available information must sometimes be made. Wild guesses oftentimes must be made in formulating​ strategies, but reasonable assumptions based on available information must always be made.

Are the interpretations of the weights in a CPM and EFE Matrix the​ same?

Yes

Is the following statement​ TRUE? A benefit of developing a comprehensive mission statement is that divergent views among managers can be revealed and resolved through the process.

Yes

Which of the following statements is​ FALSE?

You may assign the same rating to firms included in a CPM analysis if the firms are similar on the respective factor.

The potential for creative growth in an organization can be limited by

a mission statement that is too specific.

Strengths and weaknesses can be determined by elements of being rather than performance. For​ example, ______.

a strength may involve ownership of natural resources

To the extent​ possible, internal​ strength/weakness factors should meet the four AQCD criteria. Two of these criteria are​ _____.

actionable and comparative

To survive and​ prosper, a business must gain and sustain​ ______ major competitive advantages over rival firms.

at least several

The extent to which a manufacturing​ plant's output reaches its potential output is called​ ______, a key strategic variable.

capacity utilization

According to Chapter​ 1, ______ may be the most important word in management.

communication

Strategic management is based on the idea that organizations should monitor internal and external trends​ _____.

continually

The mission statement should reflect the anticipation of​ __________

customers.

The initial step in developing an IFE Matrix is

developing a full and narrow list of key internal factors.

Strengths that cannot be easily matched or imitated by competitors are called​ ______.

distinctive competencies

A firm can achieve sustained competitive advantage by​ _____.

effectively​ formulating, implementing, and evaluating strategies that capitalize on changes in trends and internal capabilities

A weak dollar means

higher exports and lower imports.

An excellent source of industry​ information, including industry profiles and trade statistics for many​ industries, is provided at what​ website?

http://globaledge.msu.edu/industries/

Whenever new firms can easily enter a particular​ industry, the intensity of competitiveness among firms tends to

increase

The​ strategic-management process

is a continuous process.

The​ times-interest-earned ratio would be classified as​ a(n)

leverage ratio.

Official business failure calculations include​ _____.

liquidations and​ court-mandated receiverships

Empirical​ indicators, or characteristics of resources that enable a firm to implement​ strategies, include​ ______.

not easily substitutable

Which function of management is concerned with span of control and chain of​ command?

organizing

​Guidelines, rules, and procedures established to support implementation efforts are called​ _____.

policies

According to the​ chapter, the worst thing strategists can do is to develop strategic plans and then​ ____.

present the plans to operating managers to execute

In order to appeal to diverse​ stakeholders, an effective mission statement should be

reconciliatory.

The​ "markets" component of mission statements refers to​ the_____.

regions in which the company operates

A fundamental​ strategy-evaluation activity​ includes_____.

reviewing external and internal factors that are the bases for current​ strategies, measuring​ performance, and taking corrective actions

Target recently joined Best Buy in offering to match online prices of rival retailers. Both companies are seeking to combat​ ______ by shoppers who check out products in their stores but buy them on​ rival's websites.

showrooming

Building four new manufacturing plants in Europe is an example of​ a(n) ______.

strategy

Because of the success of the iPad and the​ iPhone, Apple has tremendous brand recognition. Brand recognition is one of​ Apple's

strengths

According to recent research by​ Cuddy, Fiske, and​ Glick, what ethics​ variable(s) is most important in doing​ business?

trustworthiness

Distribution includes

warehousing.

According to​ Drucker, the most important time to ask​ seriously, "What do we want to​ become?" and​ "What is our​ business?" is​ ______.

when a company has been successful

In multidivisional​ organizations, should divisional units perform​ strategic-management tasks, including the development of their own statement of vision and​ mission?

yes

In​ 2018, global data analytics software is expected to reach​ ______ billion, a​ ______ percent increase from 2012.

​$21.7; 64

In Step 1 of developing an EFE​ Matrix, how many opportunities and threats should be included in the full and narrow​ lists, respectively?

​100, 20

In an EFE​ Matrix, how much more important is a rating of 4 than a rating of​ 3?

​33%

In an EFE​ Matrix, how much more important is a weight of 0.20 than a weight of​ 0.15?

​33%

Dale McConkey​ said, "Plans are less important than​ planning." What does this statement​ mean?

​Communication, understanding, and commitment are vitally important in strategic planning.

Human resource​ (HR) management includes activities such​ as:

​Disciplining, promoting,​ transferring, and demoting

Standard​ & Poor's NetAdvantage does not provide online access to

​Mergent's (formerly​ Moody's/FISOnline) Manuals.

What are the four basic activities that comprise​ management?

​Planning, organizing,​ motivating, and controlling

Which of the following four types of strategies are developed in a SWOT​ (Strengths-Weaknesses-Opportunities-Threats) Analysis?

​SO, WO,​ ST, WT

A mission statement should include the following​ components:

​Survival/growth/profitability, philosophy,​ self-concept, and public image

Which of the following is NOT a type of strategy developed from a SWOT​ analysis?

​Threats/Opportunities


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