Strategic Management Exam

The question, "geographically, where does the firm compete?" is part of the ________ component of the mission statement.

Markets

To gain ________ firms need to provide unique products and services.

A sustainable competitive advantage

Unpublished sources of external strategic information include all of the following EXCEPT A. Abstracts B. Market Research C. Conversations with stakeholders D. Customer Surveys E. Speeches at professional and shareholders' meetings

A. Abstracts

The IFE Matrix should be _____________ in multidivisional firms. A. Constructed for each autonomous division B. Constructed only for the major divisions C. All-inclusive D. Revised Monthly E. Developed before the EFE Matrix

A. Constructed for each autonomous division

For companies located in Quadrant III of the Grand Strategy Matrix, the first strategy recommended is A. Extensive cost and asset reduction. B. Asset expansion. C. Employee expansion. D. Immediate liquidation of assets. E. Divestiture.

A. Extensive cost and asset reduction.

During what stage of strategic management is a firm's specific internal strengths and weaknesses determined? A. Formulation B. Implementation C. Evaluation D. Feedback E. Goal-setting

A. Formulation

In which phase of strategic management are long-term objectives especially important? A. Formulation B. Control C. Evaluation D. Implementation E. Management

A. Formulation

To perform an external audit, a company first must A. Gather competitive intelligence and information about external trends. B. Get an approval from the Securities and Exchange Commission. C. Hire a consultant to develop a comprehensive strategic plan. D. Perform an internal audit. E. Create a budget.

A. Gather competitive intelligence and information about external trends.

Firms located in which quadrant of the Grand Strategy Matrix are in an excellent strategic position? A. I B. II C. III D. IV E. V

A. I

According to the Grand Strategy Matrix, which strategy is recommended for a firm with rapid market growth and a strong competitive position? A. Market penetration B. Unrelated diversification C. Joint venture D. Retrenchment E. Liquidation

A. Market penetration

Which function of management includes areas such as job design, job specifications, job analysis, and unity of command? A. Organizing B. Motivating C. Controlling D. Planning E. Staffing

A. Organizing

Generally, external opportunities and threats are A. uncontrollable by a single organization. B. unable to have a significant impact on an organization. C. not worth monitoring and evaluating. D. key functions in strategy implementation. E. key functions in strategy exploitation.

A. uncontrollable by a single organization.

In the SPACE analysis, what does a (+6, +3) strategy profile portray? A. A stable environment B. A strong industry position C. A weak industry position D. A weak financial position E. An unstable environment

B. A strong industry position

In the process of developing a mission statement, it is important to involve A. as few managers as possible. B. as many managers as possible. C. upper-level management only. D. lower-level management only. E. the board of directors only.

B. As many managers as possible

What is NOT one of Michael Porter's five competitive forces? A. Rivalry among competing firms B. Bargaining power of unions C. Bargaining power of consumers D. Bargaining power of suppliers E. Potential entry of new competitors

B. Bargaining power of unions

__________ is a business technique that involves using software to mine huge volumes of data to help executives make decisions. A. Production Management B. Business Analytics C. Strategic Planning D. Business Modeling E. Operations Management

B. Business Analytics

Which function of management includes all of those activities undertaken to ensure actual operations conform to planned operations? A. Motivating B. Controlling C. Planning D. Organizing E. Staffing

B. Controlling

____________ is the unique way an organization does business. A. Humanity B. Culture C. Synergy D. Management E. Accountability

B. Culture

what is considered to be the first step in strategic planning, most of the time? A. Securing capital to operate B. Developing a vision statement C. Devising a Mission Statement D. Establishing objectives E. Obtaining shareholders or financial supporters

B. Developing a vision statement

Although a firm positioned in Quadrant ________ of the Grand Strategy Matrix is in a growing industry, it is unable to compete effectively and needs to determine why the firm's current approach is ineffective and how to best change to improve competitiveness. A. I B. II C. III D. IV E. V

B. II

Pricing is one of the basic functions of A. Finance/Accounting B. Marketing C. Management Information Systems D. Production/Operations E. Research and Development

B. Marketing

The goal of strategic management is to A. achieve competitive advantage. B. maintain competitive advantage. C. achieve and maintain competitive advantage. D. eliminate competitive advantage. E. eliminate and abolish competitive advantage.

C. Achieve and maintain competitive advantage

If suppliers are unreliable or too costly, which of these strategies may be appropriate? A. Horizontal Integration B. Market penetration C. Backward Integration D. Forward Integration E. Concentric Diversification

C. Backward Integration

The critical success factors in a Competitive Profile Matrix and EFE Matrix include A. Internal, but not external issues. B. External, but not internal issues. C. Both internal and external issues. D. Neither internal or external issues. E. Only non-quantifiable data.

C. Both internal and external issues.

The two internal dimensions represented on the axes of the SPACE Matrix are A. Stability position and industry position. B. Financial position and stability position. C. Competitive position and financial position. D. Industry position and internationalization. E. Internationalization and competitive position.

C. Competitive position and financial position.

All of the following are basic activities of management EXCEPT A. Staffing B. Motivating C. Consolidating D. Organizing E. Planning

C. Consolidating

The initial step in developing an IFE Matrix is A. Attaching a cost to each discrete activity. B. Assigning weights to key internal factors. C. Developing a full and narrow list of key internal factors. D. Obtaining weighted scores. E. Assigning ratings to key internal factors.

C. Developing a full and narrow list of key internal factors.

The shift to a service economy is an example of a(n) ________ force. A. Technological B. Political C. Economic D. Social, Culture, Demographic, and Environment (SCDE) E. Legal

C. Economic

Anything that a firm does especially well compared to rival firms is referred to as

Competitive Advantage

Military strategy is based on an assumption of ________, whereas business strategy is based on an assumption of ________. A. conflict; cooperation B. conflict; competition C. cooperation; conflict D. competition; conflict E. cooperation; competition

Conflict; Competition

A total weighted score of ________ in an External Factor Evaluation (EFE) Matrix indicates that an organization is responding in an outstanding way to existing opportunities and threats in its industry. A. 10.0 B. 1.0 C. 5.0 D. 4.0 E. 100.0

D. 4.0

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? A. Strategic Planning B. Information Systems C. Research and Development D. Business Analytics E. Marketing

D. Business Analytics

The Boston Consulting Group (BCG) Matrix is designed specifically to enhance which type of firm's efforts to formulate strategies? A. Companies with annual sales of less than $1 million B. All companies C. Large Companies D. Companies with more than one division E. Companies with annual sales greater than $1 million

D. Companies with more than one division

A firm's strengths that cannot be easily matched or imitated by competitors are called A. Interrelated Properties B. External Audits C. Internal Properties D. Distinctive Competencies E. Internal Audits

D. Distinctive Competencies

In which phase of strategic management are annual objectives especially important? A. Formulation B. Control C. Evaluation D. Implementation E. Management

D. Implementation

Which of these is NOT a SPACE Matrix quadrant? A. Aggressive B. Defensive C. Competitive D. Offensive E. Conservative

D. Offensive

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

Developing vision and mission statements

Who is referred to as "the father of modern management?"

Drucker

Individuals age 65 and older in the United States as a percentage of the population will rise to ________ percent by 2030. A. 27 B. 14 C. 22 D. 31 E. 19

E. 19

The World Economic Outlook report predicts a global growth rate of around ________ percent. A. 2.1 B. 5.3 C. 7.8 D. 1.8 E. 3.6

E. 3.6

The strategic-management process is becoming more widely used by A. small firms. B. nonprofit institutions. C. governmental organizations. D. multinational conglomerates. E. All types of organizations

E. All types of organizations

What types of skills are especially critical for successful strategy implementation? A. Marketing B. Technical C. Visionary D. Conceptual E. Interpersonal

E. Interpersonal

Standard & Poor's NetAdvantage does not provide online access to A. Standard & Poor's Industry Surveys B. Mutual Funds Reports C. Stock Reports D. The Outlook E. Mergent's (formerly Moody's/FISOnline) Manuals.

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

Which section of the SWOT Matrix involves matching internal strengths with external opportunities? A. The WT cell B. The SW cell C. The WO cell D. The ST cell E. The SO cell

E. The SO cell

Through involvement in the strategic-planning process, ________ must become "owners" of the strategy.

Line Managers

What should an effective mission statement NOT have

Monetary amounts, Numbers, Percentages, and Ratios

Are strategies one of the nine recommended components of a mission statement?

NO

The ideal length of a vision statement is

One sentence

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

Reconciliatory

Effective and carefully planned mission statements

Require infrequent major changes, but are always subject to revision

What can be defined as the art and science of formulating, implementing and evaluating cross-functional decisions that enable an organization to achieve its objectives?

Strategic Management

What are the means by which long-term objectives will be achieved?

Strategies

A major responsibility of ________ is to guide the development of coalitions, to nurture an overall team concept, and to gain the support of key individuals and groups of individuals.

Strategists

True or False The vision statement should be established before the mission statement.

True

Which stage of the strategy-formulation framework includes the IFE Matrix? A. Output Stage B. Input Stage C. Decision Stage D. Analysis Stage E. Matching Stage

B. Input Stage

The two positive-rated dimensions on the SPACE Matrix are A. IP and Sp B. FP and Sp C. FP and IP D. FP and CP E. CP and SP

C. FP and IP

In the Boston Consulting Group (BCG) Matrix, which strategy would be most appropriate for a division classified as a Dog? A. Market Development B. Market Penetration C. Retrenchment D. Product Development E. Forward Integration

C. Retrenchment

Often, an effective way to gain commitment and achieve desired results is to shift from ___________ to ___________ issues and concerns. A. External; Internal B. Internal; External C. Short-term; Long-term D. Local; Global E. Long-term; Short-term

C. Short-term; Long-term

An effective mission statement does all of the following EXCEPT

It is static in orientation

What type of strategies would you recommend when a firm's SPACE Matrix directional vector has the coordinates (-2, +3)? A. Conservative B. Aggressive C. Competitive D. Integrative E. Defensive

A. Conservative

Successful strategists minimize their own political exposure on issues that are ________ and in circumstances where opposition from major power centers is likely. A. Highly Controversial B. Strategy Centered C. Power Centered D. Tactic Optimized E. Nominally Controversial

A. Highly Controversial

Which of the following is NOT one of the steps involved in constructing a SWOT Matrix? A. List the firm's external weaknesses. B. List the firm's key external threats. C. Match internal strengths with external threats, and record the resultant ST strategies. D. List the firm's external opportunities. E. Match internal strengths with external opportunities, and record the resultant SO strategies in the appropriate

A. List the firm's external weaknesses.

The Robinson-Patman Act affects a company's A. Pricing B. Customer Analysis C. Product/Service Planning D. Distribution E. Marketing Research

A. Pricing

What are the two external dimensions of the SPACE Matrix? A. Stability position and industry position B. Stability position and competitive position C. Industry position and competitive position D. Competitive position and financial position E. Financial position and industry position

A. Stability position and industry position

An important activity in ________ is taking corrective action. A. strategy evaluation B. strategy implementation C. strategy formulation D. strategy leadership E. all of the above

A. Strategy Evaluation

________ is NOT a strategy-implementation activity. A. Taking corrective actions B. Establishing annual objectives C. Devising policies D. Allocating resources E. Motivating employees

A. Taking corrective actions

Since ________ resources can more easily be bought and sold, ________ resources are often more important for gaining and sustaining competitive advantages. A. Tangible; Intangible B. Internal; External C. Intangible; Tangible D. Intangible; External E. Tangible; Organizational

A. Tangible; Intangible

Good mission statements identify the ________ of a firm's products to its customers. A. utility B. price C. profit margin D. demand E. popularity

A. Utility

In the Boston Consulting Group (BCG) Matrix, which element represents the industry growth rate in sales, measured in percentage terms? A. Y-axis B. Third Quadrant C. Second Quadrant D. First Quadrant E. X-axis

A. Y-Axis

The process of developing a vision and mission statement often includes what as the first activity?

Asking managers to read selected articles about vision and mission statements

Which of the following is NOT a pitfall an organization should avoid in strategic planning? A. Failing to communicate the plan to employees B. Involving all managers rather than delegating planning to a "planner" C. Top managers not actively supporting the strategic-planning process D. Doing strategic planning only to satisfy accreditation or regulatory requirements E. Failing to create a collaborative climate supportive of change

B. Involving all managers rather than delegating planning to a "planner"

What are enduring statements of purpose that distinguish one business from other similar firms? A. Employee conduct guidelines B. Mission statements C. Objectives D. Policies E. Rules

B. Mission Statements

Availability of credit falls under the ________ forces category of external forces. A. Technological B. Organizational C. Social D. Economic E. Environmental

B. Organizational

________ captures the subtle, elusive, and largely unconscious forces that shape a workplace. A. Regulation B. Organizational Culture C. Business Model D. Organizational Strategy E. Organizational Mandate

B. Organizational Culture

Which of the following is NOT a published source of external strategic information? A. Journals B. Periodicals C. Reports D. Customer Surveys E. Directories

B. Periodicals

Which component of a mission statement addresses the basic beliefs, values, aspirations, and ethical priorities of the firm? A. Technology B. Philosophy C. Concern for public image D. Customers E. Self-concept

B. Philosophy

Which matrix is included in the decision stage of the strategy formulation framework? A. Strategic Position and Action Evaluation (SPACE) Matrix B. Quantitative Strategic Planning Matrix (QSPM) C. Internal Factor Evaluation (IFE) Matrix D. Boston Consulting Group (BCG) Matrix E. Grand Strategy Matrix

B. Quantitative Strategic Planning Matrix (QSPM)

Which of the following illustrates the self-concept component of a mission statement? B. 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. B. Our emphasis is on North American markets, although global opportunities will be explored. C. To earn our customer's loyalty, we listen to them, anticipate their needs, and act to create value in their eyes. D. To compensate its employees with remuneration an fringe benefits competitive with other employment opportunities in its geographical area and commensurate with their contributions toward efficient corporate operations. E. In this respect, the company will conduct its operations prudently and will provide the profits and growth which will assure our ultimate success.

B. 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.

Strategy analysis and choice largely involves making ________ decisions based on ________ information. A. long-term; short-term B. subjective; objective C. short-term; long-term D. subjective; short-term E. objective; subjective

B. subjective; objective

All of the following utility statements are relevant in developing a mission statement EXCEPT A. Do not offer me shoes. Offer me comfort for my feet and the pleasure of walking. B. Do not offer me furniture. Offer me comfort and the quietness of a cozy place. C. Do not offer me ideas, emotions, ambience, feelings, and benefits. Offer me things. D. Do not offer me books. Offer me hours of pleasure and the benefit of knowledge. E. Do not offer me a house. Offer me security, comfort, and a place that is clean and happy.

C. Do not offer me ideas, emotions, ambience, feelings, and benefits. Offer me things.

___________ exemplifies the complexity of relationships among the functional areas of business. A. Distribution Strategy B. Government Auditing C. Financial Ration Analysis D. Environmental Scanning E. External Auditing

C. Financial Ratio Analysis

Which of the following states has zero state income tax? A. Delaware B. New York C. Florida D. Montana E. North Carolina

C. Florida

A weak dollar means A. Higher exports and higher imports B. Lower exports and higher imports C. Higher exports and lower imports D. Lower exports and lower imports E. Lower exports and no effect on imports

C. Higher exports and lower imports

What is the first step in designing an External Factor Evaluation (EFE) Matrix? A. Drawing the horizontal and vertical lines for the matrix B. Summing the weighted score for each competitor C. Identifying key external factors D. Calculating the sales of each competitor E. Determining four competitors

C. Identifying key external factors

Whenever new firms can easily enter a particular industry, the intensity of competitiveness among firms tends to A. Become Irrelevant B. Stay the same C. Increase D. Decrease E. Neutralize

C. Increase

Which of these is a limitation of QSPM? A. Only a few strategies can be evaluated simultaneously. B. The cost of doing the analysis C. Intuitive judgments and educated guesses are required. D. Sets of strategies must be examined in reverse order. E. It requires equal participation from everyone

C. Intuitive judgments and educated guesses are required.

Which statement best describes intuition? A. It represents the marginal factor in decision-making. B. It represents a minor factor in decision-making integrated with analysis. C. It should be coupled with analysis in decision-making. D. It is better than analysis in decision-making. E. It is management by ignorance.

C. It should be coupled with analysis in decision-making.

Which stage in the strategy-formulation framework focuses on generating feasible alternative strategies? A. Output B. Decision C. Matching D. Input E. Throughput

C. Matching

Which of the following is the process of influencing people to accomplish specific objectives? A. Controlling B. Staffing C. Motivating D. Organizing E. Planning

C. Motivating

Which strategy-formulation technique reveals the relative attractiveness of alternative strategies and thus provides an objective basis for selecting specific strategies? A. SWOT B. SPACE C. QSPM D. IFE E. CPM

C. QSPM

In the BCG Matrix, when a division of an organization has a high relative market share and is in a fast-growing industry, it is called a A. Dog B. Question Mark C. Star D. Cat E. Cash Cow

C. Star

Sometimes ________ is used to refer to strategic formulation, implementation and evaluation, with ________ referring only to strategic formulation. A. strategic planning; strategic management B. strategic planning; strategic processing C. strategic management; strategic planning D. strategic management; strategic processing E. strategic implementation; strategic focus

C. Strategic Management; Strategic Planning

The match an organization makes between its internal resources and skills and the opportunities and risks created by its external factors can be defined as A. SWOT B. Concept Formulation C. Strategy D. Weakness E. Input

C. Strategy

When using External Factor Evaluation (EFE) Matrix, what is done after multiplying each factor's weight by its rating to determine a weighted score? A. Identifying key external factors B. Summing the weighted score for each competitor C. Summing the weighted scores for each variable to determine the total weighted score for the organization D. Determining the preferred strategic factors E. Drawing the horizontal and vertical lines for the matrix

C. Summing the weighted scores for each variable to determine the total weighted score for the organization

2 + 2 = 5 is the mathematical expression of the concept of A. Empowerment B. Organizational Culture C. Synergy D. Motivation E. Delegation

C. Synergy

Which of the following is the first step in developing a QSPM? A. Compute the Total Attractiveness Scores B. Determine the Attractiveness Scores C. Examine the Stage 2 matrices and identify alternative strategies the organization should consider implementing. D. Make a list of the firm's key external opportunities and threats and internal strengths and weaknesses in the left column of the QSPM. E. Assign weights to each key external and internal factor.

D. Make a list of the firm's key external opportunities and threats and internal strengths and weaknesses in the left column of the QSPM.

Which of the following is the last step in developing an IFE Matrix? A. Summing the weighted scores for each variable B. Assigning a weight to each factor C. Identifying the organization's functions of business D. Obtain total weighted score E. Determining the organization's structure

D. Obtain total weighted score

Which of the following does the text call an up-front investment in success? A. Controlling B. Staffing C. Organizing D. Planning E. Motivating

D. Planning

According to Porter, what is usually the most powerful of the five competitive forces? A. Potential development of substitute products B. Potential entry of new competitors C. Bargaining power of suppliers D. Rivalry among competing firms E. Bargaining power of consumers

D. Rivalry among competing firms

Culture and ________ must work together. A. Suppliers B. Business Model C. Customers D. Strategy E. Finances

D. Strategy

The functions of management can be performed best when a firm's ___________ and culture are integrated. A. Profits B. External Environment C. Business Model D. Strategy E. Finances

D. Strategy

Distribution includes A. Advertising B. Test Marketing C. Pricing D. Warehousing E. Customer Analysis

D. Warehousing

What are educated assumptions about future trends and events called? A. Wild Guesses B. Facts C. Premonitions D. Statistics E. Forecasts

E. Forecasts

Without assumptions, planning would be A. Intuitive B. Difficult C. Easier D. Inexpensive E. Impossible

E. Impossible

Which of the following analytical tools consists of a nine-cell matrix? A. Strategic Position and Action Evaluation (SPACE) Matrix B. Grand Strategy Matrix C. Competitive Profile Matrix (CPM) D. Boston Consulting Group (BCG) Matrix E. Internal-External (IE) Matrix

E. Internal-External (IE) Matrix

An ________ with expertise in developing vision and mission statements and with unbiased views, can at times manage the process more effectively than an internal group or committee of managers. A. external group B. external auditor C. outside process analyst D. internal auditor E. outside facilitator

E. Outside Facilitator

The general public is especially interested in ________, whereas stockholders are more interested in ________. A. environmental concerns; social responsibility B. social responsibility; the treatment of employees C. the treatment of employees; environmental concerns D. profitability; social responsibility E. social responsibility; profitability

E. Social Responsibility; Profitability

Forward integration would be an appropriate strategy for which of the following types of divisions in the Boston Consulting Group (BCG) Matrix? A. Dogs B. Failures C. Question Marks D. Cat E. Star

E. Star

What is the highest number of strategies that can be examined at one time with the QSPM? A. 1 B. 2 C. 5 D. 10 E. There is no limit

E. There is no limit

Which strategies are defensive tactics directed at reducing internal weaknesses and avoiding external threats? A. SO B. WO C. SW D. ST E. WT

E. WT