Practice Test
The IFE Matrix should be _________ in a multidivisional Firm A) Constructed for only major divisions B) Revised monthly C) all-inclusive D) constructed for each division E) developed before the EFE Matrix
A) Constructed for only Major divisions
During what stage in strategic management are a firms specific internal strengths and weaknesses determined A) Formulation B) Goal-setting C) Evaluation D) Feedback E) Implementation
A) Formulation
What is the essential bridge between the present and the future that increases the likelihood of achieving a desired result A) Planning B) Controlling C) Motivating D) Staffing E) Organizing
A) Planning
Which part of strategic management is called the action phase? A) Strategy Implementation B) Strategy Evaluation C) Allocating Resources D) Strategy Formulation E) Measuring performance
A) Strategy Implementation
Which of the following is the first step in developing an IFE Matrix? A) Giving a weight to each factor B) Identifying the organizations strengths and weaknesses C) Identifying the organizations functions of business D) Summing the weighted scores of each variable E) Determining the organizations structure
B) Identifying the organizations strengths and weaknesses
What are assumptions about future events and trends called? A) B) C) Forecasts D) E)
C) Forecasts (covered up)
Empirical Indicators are resources that either are rare, hard to imitate, or _________? A) inexpensive B) inefficient C) not easily substitutable D) easily substitutable E) expensive
C) not easily substitutable
Financial objectives involve all of the following EXCEPT: A) Greater return on investment B) a rising stock price C) growth in revenues D) larger market share E) higher dividends
D)
The goal of strategic management is to: A) Maintain competitive advantage B) Eliminate and abolish competitive advantage C) Achieve competitive advantage D) Achieve and maintain competitive advantage E) Eliminate competitive advantage
D) Achieve and maintain competitive advantage
A firms strengths that cannot be easily matched or imitated by competitors are called: A) interrelated properties B) internal audits C) internal properties D) distinctive competencies E) external audits
D) Distinctive Competencies
Which term refers to selling a division of an organization? A) Joint Venture B) Liquidation C) Concentric Diversification D) Horizontal integration E) Divestiture
E)
_________, Perhaps the most important word in management, is a major component in motivation. A) Management Development B) Forecasting C) Organizational Structure D) Recruiting E) Communication
E) Communication
What level of bargaining power to consumers have when products being purchased are standard or undifferentiated? A) Low B) Negative C) Marginal D) Negligible E) High
E) High
Strategy evaluation is necessary because: A) Firms have limited resources B) success today is a guarantee of success tomorrow C) SEC requires it D) IRS requires it E) Internal and external factors are constantly changing
E) Internal and external factors are constantly changing
The ________ decision is the allocation and reallocation of capital and resources to projects, products, assets, and divisions of an organization. A) Benchmark B) Dividend C) Financing D) Restructuring E) Investment
E) Investment
What can be used to promote unbiased views and to manage the development of the mission statement more effectively? A) Surveys B) A committee of managers C) An internal Group D) Command and Control E) An outside facilitator
E) an outside facilitator
T/F 5 Major categories of external variables are: 1) Economic Forces 2) Social, cultural, demographic, and environmental 3) Political, governmental, and legal 4) Technological 5) Demographic
FALSE
T/F An external audit focuses on identifying and evaluating trends and events within control of MGT
FALSE
T/F Proponents of the resource-based view argue that external factors are more important than internal factors for a firm achieving and sustaining competitive advantage
FALSE
T/F Regardless of the number of key opportunities and threats included an External Factor Eval Matrix, the highest possible total weighted score is 4.0 and the lowest possible total weighted score is 0.0
FALSE
T/F The first step to using porters 5 Forces model is to evaluate the relative strength of each of the forces
FALSE
TRUE/FALSE A vision statement answers "what is our business?" whereas a missions statement answers "what do we want to become?"
FALSE
T/F Divestiture would be an appropriate strat when a need exists to produce a new tech quickly
False
T/F For a resource to be valuable, it has to be either rare, hard to imitate, or not easily sustainable
False
T/F The I/O approach to competitive advantage advocates that internal factors are more important that external factors in a firm achieving competitive advantage
False
T/F According to Porter, strategies allow organizations to gain competitive advantage from three different bases: Cost leadership, differentiation and decentralization
False (Focus)
T/F A mission statement is a declaration of an organizations reason for being.
TRUE
T/F A strategy of seeking ownership or increased ownership of a firms suppliers is backward integration
TRUE
T/F Carefully prepared statements of vision and mission are widely recognized as the first step in strategic management
TRUE
T/F External Audits attempt to ID key variables that offer actionable responses
TRUE
T/F Horizontal integration is seeking ownership or increased control over competitors
TRUE
T/F Industry analysis is also referred to as external strategic management audit
TRUE
T/F Objectives provide direction and allow for organizational symmetry
TRUE
T/F Retrenchment and turnaround are the same strat
TRUE
T/F Significant barriers to entry are not always sufficient to keep some new firms from entering industries with higher quality products, lower prices, and substantial marketing resources
TRUE
T/F The internal factor Evaluation Matrix should include from 10 to 20 internal factors
TRUE
T/F When developing a vision statement, input should be received from as many managers as possible.
TRUE
TRUE OR FALSE Resource allocation is included in strategy-formulation activities
TRUE
TRUE OR FALSE Strategic management focuses on integrating management, marketing, finance/accounting, production/operations, R&D, and information systems to achieve organizational success
TRUE
TRUE/FALSE Strategy formulation, implementation and evaluation activities occur at three hierarchical levels: Corporate, divisional, functional
TRUE