MGSC Exam 1 Chp 1-6

A mission statement should include the following​ components:

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

The​ strategic-management process represents​ a(n) ________,​ ________, and​ ________ approach for determining an​ enterprise's future direction.

​logical; systematic; objective

In both the BCG and IE​ Matrices, the size of each circle represents the percentage of​ _______ contribution of each​ division, and pie slices reveal the percentage of​ _____ contributed of each division to the company.

​revenues; operating profits

If a company has high customer loyalty​ (like Harley-Davidson​ does), what rating would be appropriate for that factor in a SPACE​ Matrix?

-1 on CP axis

What would be an appropriate SP axis number for Apple​ Inc.?

-6

An industry can be stable or unstable on​ SP, yet high or low on IP. The smartphone​ industry, for​ instance, would be unstable​ (_____) on SP yet​ high-growth on​ IP, whereas the canned food industry would be stable​ (_____) on SP yet​ low-growth on IP.

-6, -2

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

129 percent

The time frame for​ long-term objectives and strategies should be​ consistent, usually from​ ______ to​ ______ years.

2, 5

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

The​ strategy-formulation analytical framework consists of how many stages and how many​ matrices?

3 and 9

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

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%

If a​ corporation's profits are​ $120, and its three divisions have​ $30, $80, and​ $10 of profits​ respectively, and equal​ revenues, what percent is the pie slice in Division​ 3?

33.3

Any industry whose annual growth in sales exceeds​ ______ percent could be considered to have rapid growth.

5%

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

9

Secondary buyouts occur when what​ happens?

A private equity firm buys a firm from another private equity firm

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

Actionable and comparative

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

Always

The purpose of a mission statement is to declare all of these EXCEPT

An annual financial plan

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

At least several

Which of the following statements is​ FALSE? A. A mission statement needs to be broad to reconcile differences effectively among—and appeal to—an ​organization's diverse stakeholders. B. Apple​ Computer's mission statement should open the possibility for diversification by Apple into pesticides. Your answer is correct. C. Excess specificity in a mission statement would limit the potential of creative growth for the organization. D. A good mission statement allows for the generation and consideration of a range of feasible alternative objectives and strategies without unduly stifling management creativity. E. An overly general mission statement that does not exclude any strategy alternatives could be dysfunctional.

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

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.

Which statement​ FALSE? A. During the process of developing vision and mission​ statements, some organizations use discussion groups of managers to develop and modify existing statements. B. The process of developing a mission statement should create an​ "emotional bond" and​ "sense of​ mission" between the organization and its employees. C. An outside person with expertise in developing vision and mission statements who has unbiased views should always manage the​ statement-development process. Your answer is correct. D. Mission statements should include the 9 components. E. Vision statements should pass the 5 out of 5 test.

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

Which of the following statements is​ FALSE? A. The ratings in a CPM refer to strengths and​ weaknesses, where 4​ = major​ strength, 3​ = minor​ strength, 2​ = minor​ weakness, and 1​ = major weakness. B. 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. C. You may assign the same rating to firms included in a CPM analysis if the firms are similar on the respective factor. Your answer is correct. D. 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. E. The weights and total weighted scores in both a CPM and an EFE have the same meaning.

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

What are two major types of​ bankruptcy?

Chapter 7 and Chapter 11

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

Communication

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.

Uber has fewer fixed assets than the typical taxi fleet company. This type of benefit that a company such as Uber has is called​ a(n)

Competitive advantage

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

Continually

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

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

Which statement below is​ FALSE? A. Successful strategists let weakly supported ideas and proposals die through inaction. B. Successful strategists establish additional hurdles or tests for strongly supported ideas considered unacceptable but not openly opposed. C. Successful strategists keep a low political profile on unacceptable proposals and strive to let most negative decisions come from subordinates or a group consensus. D. Successful strategists commonly have the title chief executive officer or president. Your answer is not correct. E. Successful strategists are generally iridescent.

E. Successful strategists are generally iridescent.

​______ 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

The weights and total weighted scores in a Competitive Profile Matrix​ (CPM) have the same meaning as the weights and total weighted scores in​ a(n)

External Factor Evaluation (EFE)

T/F Allocating resources is one of the four basic activities​ (functions) performed by managers.

False

T/F An​ objective, logical,​ systematic, and​ non-intuitive approach for making major decisions in an organization is a way to describe the​ strategic-management process.

False

T/F Because a combination strategy bears no​ risk, many organizations pursue a combination of two or more strategies simultaneously.

False

T/F It is vital that strategists always consider all feasible alternatives that could benefit the firm.

False

T/F Once a firm acquires a competitive​ advantage, it is usually able to sustain it indefinitely.

False

T/F Once an effective strategy is designed, modification rarely required

False

T/F Strategy changes may be highly​ ineffective, but not​ counterproductive, if a supportive culture does not exist.

False

T/F The best approach for strategists is to carefully develop strategic plans themselves and then present them to operating managers to execute.

False

T/F The management function of organizing is included in human resource management.

False

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

False

​________ exemplifies the complexity of relationships among the functional areas of business.

Financial ratio analysis

Panera installing online ordering and delivery from their restaurants is an example of which type of​ strategy?

Forward integration

The Global Capsule in Chapter 5 says perhaps the best variable to monitor and to use to decide where to begin doing business is what​ factor?

Gross Domestic Product

​________ is NOT a basic mission of a competitive intelligence program.

Identifying industry executives who could be hired by the firm

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.

External audit is sometimes called

Industry analysis

Which stage of the​ strategy-formulation framework includes the IFE​ Matrix?

Input stage

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

Laziness

When an organization has pursued both a retrenchment strategy and a divestiture strategy and neither has been​ successful, then perhaps the best strategy is​ ______.

Liquidation

Which of the following is NOT one of the steps involved in constructing a SWOT​ Matrix?

List the​ firm's external weaknesses.

The old​ adage, "If it​ ain't broke,​ don't fix​ it" pertains to which of the​ following?

Managing by extrapolation

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

Nonprofit organizations are basically just like​ for-profit companies except for two major differences. What is one of the​ differences?

Nonprofits do not pay taxes or have shareholders.

​______ 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

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

Policies

Which best expresses former Colgate CEO Reuben​ Mark's thoughts on​ vision?

Pushing one vision globally is essential.

In a BCG​ Matrix, ______ is defined as the ratio of a​ division's own market share​ (or revenues) in a particular industry to the market share​ (or revenues) held by the largest rival firm in that industry.

Relative market share position

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

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

SO, WO, ST and WT

In developing a SPACE​ Matrix, what term​ (axis) refers to the volatility of profits and revenues for firms in a given​ industry?

SP

Which statement is a limitation of the​ SWOT?

SWOT does not show how to achieve a competitive​ advantage, so it must not be an end in itself.

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.

Show rooming

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.

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

Strategic management

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

Strategy

​_____ 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

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

Strengths

What is a major limitation of the BCG​ Matrix?

The BCG Matrix does not reflect whether various divisions or their industries are growing over time.

Hobby Lobby CEO David Green​ says, "The secret to being a great manager is to manage by the​ book." To what book is he​ referring?

The bible

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

There are four important differences between the BCG Matrix and the IE Matrix. Which statement below is NOT a difference between the two​ matrices?

The sizes of the circles and pie slices can vary.

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.

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.

Which ratio is calculated by dividing profits before interest and taxes by total interest​ charges?

Times-interest-earned ratio

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

Trustworthiness

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 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.

Which of these basic questions should a vision statement​ answer?

What do we want to become?

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

What is our business?

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

What is​ Rudin's Law?

When a crisis forces choosing among​ alternatives, most people choose the worst​ possible one.

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?

In the Boston Consulting Group​ (BCG) Matrix, which element represents the industry growth rate in​ sales, measured in percentage​ terms?

Y-axis

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

Yes

In a QSPM​ analysis, would it ever be appropriate or useful for a company not to include a weight column at​ all, but rather total the AS columns to determine the relative attractiveness of six​ strategies?

Yes

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

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

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

a strength may involve ownership of natural resources

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

capacity utilization

First mover advantages refers to the benefits a firm may achieve by entering a new market or developing a new product or service prior to rival firms. An advantage of being a first mover is​ ______.

carving out market share and a position that is easy to defend and costly for rival firms to overtake

In a BCG​ Matrix, divisions in Quadrant III​ (lower left) have a high relative market share position but compete in a​ low-growth industry. They are called​ ______.

cash cows

​______ is the unique way an organization does business. It is the human dimension that creates solidarity and​ meaning, and it inspires commitment and productivity in an organization when strategy changes are made.

culture

Business analytics is sometimes also called

data mining

A firm can achieve sustained competitive advantage by​ _____.

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

Gaining ownership or increased control over distributors or retailers is called​ _____.

forward integration

To perform an external​ audit, a company first must

gather competitive intelligence and information about external trends.

The fact that Apple has no manufacturing facilities of its own

has enables it to remain financially lean

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/

The chapter lists six reasons why many mergers and acquisitions​ fail, including which of the​ following?

inability to achieve synergy

The​ ________ decision is the allocation and reallocation of capital and resources to​ projects, products,​ assets, and divisions of an organization.

investment

Retrenchment would be an effective strategy when an organization

is plagued by​ inefficiency, low​ profitability, poor employee morale and pressure from stockholders to improve performance.

Official business failure calculations include

liquidations and court-mandated receiverships

When a domestic company first begins to export to​ India, it is an example of

market development.

What strategy seeks to increase market share for present products or services in present markets through greater marketing​ efforts?

market penetration

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

not easily substitutable

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

organizational culture.

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

The​ Robinson-Patman Act affects a​ company's

pricing

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

regions in which the company operates

What is the name of the strategy that involves selling off land and buildings to raise needed​ cash, pruning product​ lines, closing marginal​ businesses, closing obsolete​ factories, automating​ processes, reducing the number of​ employees, and instituting expense control​ systems?

retrenchment

A fundamental​ strategy-evaluation activity​ includes_____.

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

The general public is especially interested in​ ________, whereas stockholders are more interested in​ ________.

social​ responsibility; profitability

VCA is the process whereby a firm determines the value​ (price minus​ cost) of each and all activities​ ______.

that went into producing and marketing a product

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

​$21.7; 64

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

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

Four companies—​A, ​B, C, and D—have revenues of​ 1, 2,​ 3, and​ 4, respectively. Company C develops a BCG Matrix. What would the RMSP be for company C if all four firms have the same net​ income?

.75

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

​Disciplining, promoting,​ transferring, and demoting

Which of the following statements is​ TRUE? A. 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. Your answer is correct. B. If a firm possesses many​ highly-weighted weaknesses, this is likely the result of effective​ strategies, so higher ratings in general are warranted for weaknesses. C. If a firm possesses many​ highly-weighted weaknesses, this is likely the result of effective​ strategies, so higher ratings in general are warranted for both strengths and weaknesses. D. If a firm possesses many​ highly-weighted weaknesses, this is likely the result of effective​ strategies, so higher ratings in general are warranted for strengths. E. 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 and weaknesses.

A. 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.

Which of the following statements is​ FALSE? A. Value chain analysis and benchmarking are opposite ways to address the management of resources. This is the correct answer. B. Partnering is not yet taught at most business schools and is often viewed within companies as a financial issue rather than a strategic issue. C. Although evidence is mounting that firms should use partnering as a means for achieving​ strategies, most U.S. firms in many industries—such as financial​ services, forest​ products, metals, and retailing—still operate in a merge or acquire mode to obtain growth. D. In a global market tied together by the​ Internet, joint​ ventures, and​ partnerships, alliances are proving to be a more effective way to enhance corporate growth than mergers and acquisitions. E. Partnering has become a core​ competency, a strategic issue of high importance.

A. Value chain analysis and benchmarking are opposite ways to address the management of resources.

Which of the following statements is​ TRUE? A. When assigning weights and ratings in developing an IFE​ Matrix, focus on a narrow industry perspective. Your answer is correct. B. When assigning weights and ratings in developing an IFE​ Matrix, focus on all competitors in the industry. C. When assigning weights and ratings in developing and IFE​ Matrix, focus on a broad industry perspective. D. When assigning weights and ratings in developing an IFE​ Matrix, focus on a narrow industry perspective for strengths and a broad industry perspective for weaknesses. E. When assigning weights and ratings in developing an IFE​ Matrix, focus on the top three competitors in the industry.

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

Which of the following statements is​ TRUE? A. There is no one best mission statement for a particular organization. Your answer is correct. B. Mission statements should not be published for competitors to see. C. Mission statements should be​ employee-oriented first and foremost and​ shareholder-oriented secondarily. D. An effective mission statement paves the way for an effective vision statement. E. A​ single-division organization could have several mission statements for different purposes.

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

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

Analyze interest rate trends

A​ ________ integration strategy is used by firms to gain control or ownership of suppliers.

Backward

If an​ organization's present suppliers are especially​ expensive, unreliable, or incapable of meeting the​ firm's needs for​ parts, components,​ assemblies, or raw​ materials, what strategy is​ best?

Backward integration

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

Which of the following is similar to the actuarial methods used by insurance companies to rate customers by the chance of positive or negative​ outcomes?

Business analytics

Which of the following statements is​ TRUE? A. Wild guesses should never be made in formulating​ strategies, but reasonable assumptions based on available information must oftentimes be made. B. Wild guesses should sometimes be made in formulating​ strategies, and reasonable assumptions based on available information must sometimes be made. C. Wild guesses should never be made in formulating​ strategies, but reasonable assumptions based on available information must always be made. Your answer is correct. D. Wild guesses should rarely be made in formulating​ strategies, but reasonable assumptions based on available information must usually be made. E. Wild guesses oftentimes must be made in formulating​ strategies, but reasonable assumptions based on available information must always be made.

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

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

Clear and unique

According to Michael​ Porter, strategies allow organizations to gain competitive advantage from two different bases. What are the​ bases?

Cost leadership and differentiation

According to​ Porter, strategies allow organizations to gain competitive advantage from two different bases. What are the​ bases?

Cost leadership and differentiation

The following excerpt from a mission statement illustrates which of the nine essential components of a mission​ statement? ​"We believe our first responsibility is to the​ doctors, nurses,​ patients, mothers, and all others who use our products and​ services."

Customers

Which of the following statements is​ FALSE? A. Avoid assigning the same rating to firms included in a CPM analysis. B. The ratings in a CPM refer to strengths and​ weaknesses, where 4​ = major​ strength, 3​ = minor​ strength, 2​ = minor​ weakness, and 1​ = major weakness. C. 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. D. 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. Your answer is correct. E. The weights and total weighted scores in both a CPM and an EFE have the same meaning.

D. 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.

Availability of credit falls under the​ ________ forces category of external forces.

Organizational

Which of the following statements is​ TRUE? A. 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. B. 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. C. 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. D. 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. Your answer is correct. E. Opportunities and threats can be external or internal.

D. 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.

Which of the following statements is​ FALSE? A. 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. B. The ratings in a CPM refer to strengths and​ weaknesses, where 4​ = major​ strength, 3​ = minor​ strength, 2​ = minor​ weakness, and 1​ = major weakness. C. The weights and total weighted scores in both a CPM and an EFE have the same meaning. D. You may assign the same rating to firms included in a CPM analysis if the firms are similar on the respective factor. Your answer is correct. E. 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.

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

Which statement below is​ FALSE? A. IFE ratings are​ company-based whereas weights are​ industry-based B. Always sequence factors in an IFE Matrix from highest to lowest weight. C. 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. D. The average IFE Matrix score is 2.0. Your answer is correct. E. 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

D. The average IFE Matrix score is 2.0.

.Regarding vision​ statements, which statement below is​ FALSE? A. Vision statements should be one sentence long. B. Vision statements should do more than identify the​ product/service a firm offers. C. Vision statements should be written from a customer perspective. D. Vision statements should answer the question​ "What is our​ mission?" Your answer is correct. E. Firms should develop a vision statement before a mission statement.

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

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

What is the first step in the comprehensive​ strategic-management model?

Developing vision and mission statements

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

Distinctive competence

The largest​ consumer-products company in the​ world, Procter​ & Gamble​ (P&G), is in the process of selling more than half of its brands​ (nearly 100) in order to focus on its core brands​ (about 80). What is this strategy​ called?

Divestiture

Which statement below is​ FALSE? A. 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. B. Dividends are sometimes paid out even when the firm has incurred a negative annual net income. C. 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. D. Companies today are aggressively boosting their dividends paid to shareholders. E. Companies should pay dividends regardless of changes in their revenue.

E. Companies should pay dividends regardless of changes in their revenue.

Which statement below is​ FALSE? A. There is no limit to the number of strategies that can be evaluated or the number of sets of strategies that can be examined at once using the QSPM. B. The magnitude of the difference between the STAS in a given set of QSPM strategic alternatives indicates the relative desirability of one strategy over another. C. Work row by row in developing a QSPM. D. The QSPM weights are identical to those in the EFE Matrix and IFE Matrix. E. In a​ QSPM, the range for Total Attractiveness Scores is 1=​not attractive, 2=somewhat ​attractive, 3=reasonably ​attractive, and 4=highly attractive.

E. In a​ QSPM, the range for Total Attractiveness Scores is 1=​not attractive, 2=somewhat ​attractive, 3=reasonably ​attractive, and 4=highly attractive.

Which of the following statements is​ TRUE? A. 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. B. 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. C. 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. D. 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. E. 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.

E. 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.

Which statement below is​ FALSE? A. In a​ QSPM, never assign duplicate AS scores across a row. B. If you have more than one strategy in the​ QSPM, then let the AS scores range from 1 to​ "the number of strategies being​ compared." C. In a​ QSPM, if you assign an AS score to one​ strategy, then assign an AS​ score(s) to the​ other; in other​ words, if one strategy receives a​ dash, then all others must receive a dash in a given row. D. In a​ QSPM, an AS value of 4 is 33 percent more important than a 3. E. QSPM analysis should be performed after​ EPS/EBIT analysis.

E. QSPM analysis should be performed after​ EPS/EBIT analysis.

Which statement below is​ FALSE? A. Successful strategists do a lot of chatting and informal questioning to stay abreast of how things are progressing and to know when to intervene. B. Successful strategists lead strategy but do not dictate it. They give few​ orders, announce few​ decisions, depend heavily on informal​ questioning, and probe and clarify until a consensus emerges. C. Successful strategists ensure that all major power bases within an organization are represented​ in, or have access​ to, top management. D. Successful strategists may be small business owners or college presidents. E. Successful strategists are commonly difficult to get along with in social settings.

E. Successful strategists are commonly difficult to get along with in social settings.

Which of the following statements is​ FALSE? 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. B. 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. C. ​Resource-based view theory asserts that resources are actually what helps a firm exploit opportunities and neutralize threats. D. 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. E. 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.

E. . 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.

Which statement is​ FALSE? A. 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. B. Some strategists spend almost every moment of every day on administrative and tactical​ concerns, ignoring the importance of a clear mission. C. Managers at Johnson​ & Johnson​ (J&J) meet regularly with employees to​ review, reword, and reaffirm the​ firm's vision and mission. D. Firms establish their vision and mission before their objectives in doing strategic planning. E. Vision statements are more important than mission statements.

E. Vision statements are more important than mission statements.

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

Financial ratios are estimates of financial condition.

Intensity of competition​ ________ in​ lower-return industries.

Is highest

​______ is a popular strategy that occurs when two or more companies form a temporary partnership or consortium for the purpose of capitalizing on some opportunity.

Joint venture

Which of the following is the last step in developing an IFE​ Matrix?

Obtain total weighted score

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.

Going clockwise beginning with the top​ axis, what are the four axes of a SPACE​ Matrix?

​FP, IP,​ SP, and CP

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

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.

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

Philosophy

Which component of a mission statement addresses the basic​ beliefs, values,​ aspirations, and ethical priorities of the​ firm?

Philosophy

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​ ______ Matrix determines the relative attractiveness of various strategies based on the extent that key external and internal factors are capitalized on or improved.

QSPM

Which analytical tool determines the relative attractiveness of various strategies based on the extent to which key external and internal critical success factors are capitalized upon or​ improved?

Quantitative Strategic Planning Matrix​ (QSPM)

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

Quantitative and divisional

Objectives should include which of the following​ characteristics?

​Measurable, challenging, and hierarchical

What are the four basic activities that comprise​ management?

​Planning, organizing,​ motivating, and controlling

What are the four types of strategies generated by a SWOT​ analysis?

​SO, WO,​ ST, and WT

What strategy may be best under the following​ conditions? • The organization competes in a highly competitive or a​ no-growth industry, as indicated by low industry profit margins and returns. • The​ organization's present channels of distribution can be used to market new products to current customers. • New products have countercyclical sales patterns compared with an​ organization's present products. • The​ organization's basic industry is experiencing declining annual sales and profits.

Unrelated diversification

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

The two general types of diversification strategies are related diversification and unrelated diversification. When are businesses said to be​ related?

When their value chains possess competitively valuable​ cross-business strategic fits

What type of strategy aims to target a new market where competition is not yet present instead of going where many firms are already competing on price and the gains of one firm are often at the expense of​ another?

blue ocean

When a core competence evolves into a major competitive​ advantage, what is it​ called?

distinctive competence

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

distinctive competencies

When an organization splits into two or more​ parts, this type of strategy is a​ _____.

divestiture

Which term refers to selling a division or part of an​ organization?

divestiture