Strategic Mgmt Final

The ________ decision is the allocation and reallocation of capital and resources to projects, products, assets, and divisions of an organization. A) investment B) dividend C) financing D) restructuring E) benchmark

A) investment

A strong ________ heritage underlies the study of strategic management. A) military B) government C) political D) social E) cultural

A) military

All of the following situations are conducive to market development EXCEPT A) when new channels of distribution are expensive and unreliable. B) when an organization is successful at what it does. C) when new untapped or unsaturated markets exist. D) when an organization has excess production capacity. E) when an organization's basic industry is rapidly becoming global in scope.

A) when new channels of distribution are expensive and unreliable.

List four major reasons annual objectives are essential for strategy implementation.

Annual objectives are essential for strategy implementation because they: 1) represent the basis for allocating resources; 2) are a primary mechanism for evaluating managers; 3) are the major instrument for monitoring progress toward achieving long-term objectives; and 4) establish organizational, divisional, and departmental priorities.

Restructuring is also referred to as A) reengineering. B) delayering. C) diversifying. D) upsizing. E) integrating.

B) delayering.

If an initial stock issuance is $800,000, what would be the expected cost paid to lawyers, accountants, and underwriters, based on the average for IPOs in this range? A) $20,000 B) $40,000 C) $80,000 D) $200,000 E) $400,000

D) $200,000

What analytical tool has four quadrants based on two dimensions: competitive position and market growth? A) Competitive Profile Matrix B) Internal-External Matrix C) SPACE Matrix D) Grand Strategy Matrix E) QSPM

D) Grand Strategy Matrix

Aspects of an existing culture that are antagonistic to a proposed strategy should be A) preserved. B) emphasized. C) built upon. D) changed. E) celebrated.

D) changed.

Who are the world's longest-living people? A) Americans B) Mexicans C) Indians D) Filipinos E) Japanese

E) Japanese

"If it ain't broke, don't fix it" refers to managing by crisis.

False

A Competitive Profile Matrix allows strategists to summarize and evaluate economic, social, cultural, demographic, environmental, political, governmental, legal, technological, and competitive information.

False

A SWOT Matrix is composed of four cells for the four types of strategies it creates.

False

A bottom-up flow of communication is essential for developing bottom-up support.

False

A total weighted score of 1.0 for an EFE Matrix indicates that the firm is responding in an outstanding way to existing opportunities and threats in its industry.

False

Attracting customers is a major reason for developing a mission statement.

True

Good mission statements identify the utility of a firm's products to its customers.

True

Successful strategists minimize their own political exposure on issues that are highly controversial and in circumstances where opposition from major power centers is likely.

True

TFDonalds currently owns more than 50 percent of its restaurants.

True

The most important determinants of an organization's overall strategic position are considered to be the two internal dimensions, financial position (FP) and competitive position (CP), and the two external dimensions, industry position (IP) and stability position (SP).

True

Viewing every business as either a Star, Cash Cow, Dog, or Question Mark is an oversimplification.

True

Unlike the USA, Japan has no law against discrimination based on age.

true

The strategic-management process A) occurs once a year. B) is a semiannual process. C) is a continuous process. D) applies mostly to companies with sales greater than $100 million. E) applies mostly to small businesses.

C) is a continuous process.

Intensity of competition ________ in lower-return industries. A) is lowest B) is nonexistent C) is highest D) is not important E) fluctuates

C) is highest

In developing a mission statement, arousing emotion A) is not a benefit. B) is futile. C) is important. D) should be avoided if possible. E) is counterproductive.

C) is important.

Communication between domestic headquarters and overseas operations is often made difficult by A) geographic distance. B) cultural differences. C) variations in business practices. D) national differences. E) all of the above

E) all of the above

All of the following are things that many cultures around the world value more than the competitiveness that is so important in the USA EXCEPT A) modesty. B) team spirit. C) individualism. D) collectivity. E) patience.

C) individualism.

According to I/O theorists, which of the following contributes LEAST to firm's performance? A) Economies of scale B) Barriers to market entry C) Product differentiation D) Internal resources E) Level of competitiveness

D) Internal resources

As a balance sheet entry, goodwill represents the favor a business has acquired through its environmentally conscious and socially responsible actions.

False

As long as the price and quality of a firm's products and services are competitive on a local basis, it has nothing to worry about.

False

Assumptions have no place in planning.

False

At Google the culture is very rigid, while in contrast the culture at Proctor & Gamble is very informal.

False

Avoidance, defusion, and confrontation are the classifications for the various types of conflict that can arise in organizations.

False

Bargaining power of consumers is usually the most powerful of Porter's five competitive forces.

False

Because activities are organized according to the way work is actually performed, a divisional structure by process is similar to the matrix structure.

False

Both military and business strategy are formulated, implemented, and evaluated with an assumption of competition.

False

Brazil offers skilled labor and technology, while Germany offers abundant natural resources and rapidly developing markets.

False

By occasionally monitoring external events, companies should be able to identify when change is required.

False

Cash Cows represent the organization's best long-run opportunities for growth and profitability.

False

It is an exaggeration to say that in an industry that is global, the riskiest possible posture is to remain a domestic competitor.

False

It is possible to obtain insurance from the U.S. government 's OPIC to eliminate all risks associated with doing business internationally.

False

Jiffy Lube International would be a good example of a firm seeking the best-value focus strategy.

False

Joint ventures and partnerships between domestic and foreign firms are becoming the exception rather than the rule.

False

Keeping informed about the number and the nature of competitors is easier when doing business internationally.

False

Mexican workers expect and desire a work environment in which self-expression and initiative are encouraged.

False

Military success is usually the happy result of accidental strategies, but business success is the product of continuous attention to changing conditions and insightful adaptations to those conditions.

False

Mission statements cannot be stated with too high a level of specificity.

False

Most producers today sell their goods directly to consumers.

False

Remaining solely domestic is an increasingly safer strategy for U.S. companies.

False

Resources that are common are never considered valuable.

False

The size of U.S. labor unions has increased sharply in the last decade.

False

The strategic-management process is conceptually different for multinational firms than for purely domestic firms.

False

The total assets turnover ratio is calculated by dividing sales by fixed assets.

False

With the matrix structure it is common for functional resources to be duplicated.

False

Yahoo was one of the firms most admired in its industry according to Fortune's 2012 evaluation

False

A leveraged buyout occurs when a firm's management and other private investors use borrowed funds to buy out the firm's shareholders.

True

A limitation of financial budgets is that they can hide inefficiencies if based solely on precedent rather than on periodic evaluation of circumstances and standards.

True

A limitation of financial ratios is the fact that they are based on accounting data.

True

A low value of the dollar benefits the U.S. economy in many ways.

True

A mission statement can sometimes be called a statement of philosophy.

True

A positive feature of QSPM is that sets of strategies can be examined sequentially or simultaneously.

True

A recent study reports that nearly 90 percent of employers today offer some kind of wellness incentives or prizes to employees who "get healthier."

True

A ritual is a standardized set of behaviors used to manage anxieties.

True

A sense of self-concept is one of the nine components a good mission statement should include.

True

According to James Van Horne the basic decision areas of finance are: the investment decision, the financing decision, and the dividend decision.

True

Chapter 7 bankruptcy is a liquidation procedure used only when a firm sees no hope of being able to operate successfully or to obtain necessary creditor agreement.

True

Chapter 9 bankruptcy applies to municipalities.

True

Chief marketing officers now spend more than 50 percent of their budget on technology to manage activities like online marketing and social media.

True

Cultural products include values, beliefs, stories, and language.

True

Culture includes the set of shared values, beliefs, attitudes, customs, norms, personalities, heroes, and heroines that describe a firm.

True

Dividend decisions concern issues such as the percentage of earnings paid to stockholders, the stability of dividends paid over time, and the repurchase or issuance of stock.

True

Four types of resources that can be used to achieve desired objectives are financial, physical, human, and technological.

True

It is predicted that, by 2025, over 18% of the population in the United States will be 65 years or older.

True

Joint ventures tend to fail when managers who must collaborate daily in operating the venture are not involved in forming or shaping the venture.

True

Labor markets have become steadily more international with more and more countries around the world welcoming foreign investment and capital.

True

Linkages between a firm's culture and strategies often determine success.

True

Many people consider it unethical for a firm to be socially irresponsible.

True

Much of Europe lingers in a recession.

True

Reengineering does not usually affect the organizational structure or chart, nor does it imply job loss or employee layoffs.

True

Regardless of the size of the organization, a certain amount of "management by wandering around" at all levels is essential to effective strategy evaluation.

True

Relative market share position is given on the x-axis of the BCG Matrix.

True

Resistance to change can be considered the single greatest threat to successful strategy implementation.

True

Restructuring in many firms has made a manager's job an invisible, thankless role.

True

Restructuring is also called rightsizing.

True

Retrenchment and turnaround are the same strategy.

True

Stockton, a city in California, declared Chapter 9 bankruptcy in 2012 to avoid having to close key functions such as their police and fire departments.

True

Strategic management focuses on integrating management, marketing, finance and accounting, production and operations, research and development, and information systems to achieve organizational success.

True

Strategists should strive to create a work environment in which change is recognized as necessary and beneficial so that individuals can more easily adapt to change.

True

Strengths and weaknesses are determined relative to competitors.

True

The controlling function of management is especially important for effective strategy evaluation.

True

The decision to expand or diversify operations is a strategy-formulation issue.

True

The decreasing time span for which planning can be done with any degree of certainty is a reason strategy evaluation is more difficult today.

True

The element of surprise provides great competitive advantages in both military and business strategy.

True

The lack of monetary rewards is one reason managers do not engage in strategic planning.

True

The major benefit of the BCG Matrix is that it draws attention to the cash flow, investment characteristics, and needs of an organization's various divisions.

True

The most common bases for segmenting markets are geographic and demographic.

True

The most complex of all organizational structures is a matrix structure.

True

The most effective differentiation bases are those that are hard or expensive for rivals to duplicate.

True

The need to amortize massive R&D investments over many markets is a major reason why the aircraft manufacturing industry became global.

True

The number of hostile takeovers is on the rise.

True

The relative attention an organization will devote to meeting the claims of various stakeholders is indicated in a good mission statement.

True

The size of the circle in a BCG Matrix corresponds to the proportion of corporate revenue generated by that business unit.

True

The smile is one form of communication that works the same worldwide.

True

The social, cultural, demographic, environmental, political, governmental, legal, technological, and competitive opportunities and threats that face a multinational corporation are almost limitless.

True

The strategic-management process is just as vital for small companies as for large companies.

True

The strategic-management process is more complex for international firms due to more variables and relationships.

True

The subtle, elusive and largely unconscious forces that shape the workplace are captured by the organizational culture.

True

The terms strategic management and strategic planning are synonymous in this text.

True

The weights and total weighted scores in both a Competitive Profile Matrix and an EFE Matrix have the same meaning.

True

There are seven basic functions of marketing: customer analysis, selling products and services, product and service planning, pricing, distribution, marketing research, and opportunity analysis.

True

Time spent with the family and the quality of relationships are more important in some cultures than the personal achievement and accomplishments espoused by the traditional U.S. manager.

True

To objectively evaluate feasible alternative strategies identified in Stage 2, the QSPM uses input information derived from Stage 1.

True

To perform an external audit, a company first must gather competitive intelligence and information about social, cultural, demographic, environmental, economic, political, legal, governmental, and technological trends.

True

To see and appreciate the world from the perspective of others has become a matter of survival for business.

True

Today boards of directors are composed mostly of outsiders who are becoming more involved in an organization's strategic management.

True

Too much emphasis on evaluating strategies may be expensive and counterproductive.

True

Trade barriers are one of the unique and diverse risks that face multinational corporations

True

Undesirable conduct such as distorting the records can be a result of overemphasis on achieving objectives.

True

Value chain analysis can enable a firm to better identify its own strengths and weaknesses especially as compared to competitors' value chain analyses and their own data over time.

True

Vision and mission statements can often be found in the front of annual reports.

True

When developing an organizational chart, it is not wise to recommend a dual title for just one executive.

True

Contingency plans should be as simple as possible.

true

An important question a mission statement should answer is, "What do we want to become?"

False

According to Roger Schroeder, which basic function within production and operations deals with aggregate planning and scheduling? A) Capacity B) Inventory C) Workforce D) Process E) Quality

A) Capacity

What is the most common type of financial budget? A) Cash B) Sales C) Profits D) Factory E) Flexible

A) Cash

Which of the following nations has the highest corporate tax rate? A) Ireland B) The USA C) Great Britain D) France E) Germany

B) The USA

The form of bankruptcy in which all the organization's assets are sold in parts for their tangible worth is A) Chapter 7. B) Chapter 8. C) Chapter 9. D) Chapter 11. E) Chapter 13.

A) Chapter 7.

Which stage of the strategy-formulation framework includes an IFE Matrix and a Competitive Profile Matrix? A) Input B) Matching C) Decision D) Penetration E) Research

A) Input

Both IE and BCG Matrices are called portfolio matrices.

True

Describe some tactics used by politicians that can also aid strategists.

1. Achieving desired results is more important than imposing a particular method, so consider various methods and choose, whenever possible, the one(s) that will afford the greatest commitment from employees/managers. 2. Achieving satisfactory results with a popular strategy is generally better than trying to achieve optimal results with an unpopular strategy. 3. An effective way to gain commitment and achieve desired results is oftentimes to shift from specific to general issues and concerns. 4. An effective way to gain commitment and achieve desired results is oftentimes to shift from short-term to long-term issues and concerns. 5. Middle level managers must be genuinely involved in and supportive of strategic decisions because successful implementation will hinge on their support.

What are the advantages and disadvantages of a divisional organizational structure?

A divisional structure has some clear advantages. The first is that accountability is clear. Also, it creates career development opportunities for managers, allows local control of local situations, leads to a competitive climate within an organization, and allows new businesses and products to be added easily. A divisional structure does have its limitations. A divisional structure is costly because each division requires functional specialists who must be paid, there exists some duplication of staff services, facilities and personnel, and better-qualified individuals require higher salaries. It is also costly because it requires an elaborate headquarters-driven control system. Finally, competition between divisions may become so intense that it is dysfunctional and leads to limited sharing of ideas and resources for the common good of the firm.

Using a Grand Strategy Matrix approach, what strategies are recommended for a firm that is a weak competitor in a slow-growing market? Elaborate on what these strategies could mean for a college or university.

A firm that is a weak competitor in a slow-growing market would be located in Quadrant III. Quadrant III strategies include retrenchment, diversification, divestiture, and liquidation. Student answers will vary when elaborating on what these strategies could mean for a college or university. However, students should mention that the college or university could possibly have to be closed. Faculty and/or staff might have to be greatly reduced, which could lead to unhappy students in very large classes.

Discuss a code of business ethics and its role in an organization.

A new wave of ethics issues related to product safety, employee health, sexual harassment, AIDS in the workplace, smoking, Internet fraud, identify theft, affirmative action, waste disposal, etc., has accentuated the need for strategists to develop a clear code of business. Merely having a code of ethics, however, is not sufficient to ensure ethical business behavior. A code of ethics can be viewed as a public relations gimmick. To ensure that a code is read, understood, believed, and remembered periodic ethics workshops are needed to sensitize people to workplace circumstances in which ethics issues may arise. If employees see examples of punishment for violating the code as well as rewards for upholding the code, this reinforces the importance of a firm's code of ethics.

Explain some of the forces leading companies to pursue international operations.

A primary reason why most domestic firms are engaging in global operations is that growth in demand for goods and services outside the USA is considerably higher than inside. Shareholders and investors expect sustained growth in revenues from firms; satisfactory growth for many firms can only be achieved by capitalizing on demand outside the USA. Fully 95 percent of the world's population lives outside the USA, and this group is growing 70 percent faster than the U.S. population. The lineup of competitors in virtually all industries is global. And while there are a few U.S. industries that are not yet greatly challenged by foreign competitors, like furniture manufacturing and retailing, many products and components within these industries too are now manufactured in foreign countries.

What drawback has the resurgence of wildlife populations in the USA had?

A recent Wall Street Journal article titled "America Gone Wild" talks about how wildlife populations in the USA have experienced an "astonishing resurgence." A drawback of the resurgence is that the total cost of wildlife damage to U.S. crops, landscaping, and infrastructure now exceeds $28 billion a year, including $1.5 billion from deer-vehicle crashes alone.

Describe a sustainability report.

A sustainability report is an annual report that reveals how the firm's operations impact the natural environment. It may include information about the firm's labor practices, product sourcing, energy efficiency, environmental impact, and business ethics practices. The Global Reporting Initiative recently issued a set of detailed reporting guidelines specifying what information should go into sustainability reports. The proxy advisory firm Institutional Shareholder Service reports that an increasing number of shareholder groups are pushing firms to provide sustainability information annually.

There are annually more than 10,000 mergers in the United States that total more than A) $700 billion. B) $825 billion. C) $975 billion. D) $1 trillion. E) $3 trillion.

A) $700 billion.

According to a recent Wall Street Journal article, ________ percent of all firms sampled had no restrictions on boss-subordinate love affairs at work. A) 5 B) 13 C) 24 D) 39 E) 80

A) 5

What percent of the world's population lives in the United States? A) 5 B) 10 C) 15 D) 85 E) 95

A) 5

What percent of the world's population lives outside the United States? A) 55 B) 65 C) 75 D) 85 E) 95

A) 55

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

A) A strong industry position

What kind of strategy is retrenchment? A) A turnaround strategy B) An expansion strategy C) A diagonal strategy D) An intensive strategy E) An offensive strategy

A) A turnaround strategy

Which of the following companies ranks among those against whom some of the largest payouts for class-action legal fraud suits ever were judged? A) AOL Time Warner B) Walt Disney C) Starbucks D) Herman Miller E) Edison

A) AOL Time Warner

What is the cornerstone of effective strategy evaluation? A) Adequate and timely feedback B) Quality and quantity of managers C) Smaller ratio of top- to lower-level management D) Evaluation preceding implementation stage E) Punitive corrective actions

A) Adequate and timely feedback

Which group generally softens up executives with praise before they criticize? A) Americans B) Italians C) Germans D) French E) All of the above

A) Americans

What term is defined as "a systematic process of objectively obtaining and evaluating evidence regarding assertions about economic actions and events to ascertain the degree of correspondence between these assertions and established criteria, and communicating the results to interested users"? A) Auditing B) Innovation C) R&D D) Strategic Management E) Financial ratios

A) Auditing

Which approach for managing and resolving conflict involves ignoring the problem in hopes that the conflict will resolve itself? A) Avoidance B) Resistance C) Compliance D) Defusion E) Confrontation

A) Avoidance

What are the three categories of approaches for managing and resolving conflict? A) Avoidance, defusion, and confrontation B) Avoidance, apathy, and defusion C) Ignorance, indifference, and apathy D) Defusion, apathy, and avoidance E) Indifference, avoidance, and role-playing

A) Avoidance, defusion, and confrontation

How would Hershey's current divisional structure most likely be classified? A) By geographic area B) By product C) By service D) By customer E) By process

A) By geographic area

One difference between CPM and EFE is that A) CPM includes both internal and external issues. B) the weights and total weighted scores have different meanings. C) CPM ratings range from 1 to 10. D) CPM is performed only for the company, whereas EFE is performed for both the company and its competitors. E) CPM is only used in small firms.

A) CPM includes both internal and external issues.

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

A) Companies with more than one division

Which of the following is NOT included in measuring organizational performance? A) Comparing results to competitors' expectations B) Examining progress being made toward meeting stated objectives C) Investigating deviations from plans D) Evaluating individual performance E) Comparing expected results to actual results

A) Comparing results to competitors' expectations

Which of the following is a potential advantage of conducting international operations? A) Competitors in foreign markets may not exist, or competition may be less intense than in domestic markets. B) Dealing with two or more monetary systems can complicate international business operations. C) Differing language, culture, and value systems can make communication difficult. D) Gaining an understanding of regional organizations is difficult but is often required in doing business internationally. E) All of the above

A) Competitors in foreign markets may not exist, or competition may be less intense than in domestic markets.

Under which strategy would you offer products or services to a wide range of customers at the lowest price available on the market? A) Cost Leadership — Low Cost B) Cost Leadership — Best Value C) Focus — Low Cost D) Focus — Best Value E) Differentiation

A) Cost Leadership — Low Cost

________ can reveal the demographic characteristics of an organization's customers. A) Customer profiling B) Test marketing C) Market development D) The vision statement E) Telemarketing

A) Customer profiling

After completing an EPS/EBIT analysis, what conclusions would you make if the debt line is above the stock line throughout the range of EBIT on the graph? A) Debt appears to be the best financing alternative. B) Stock would be the best financing alternative. C) A combination of debt and stock is probably the best financial alternative. D) Dividends must be considered before conclusions can be made. E) The company should be privately owned.

A) Debt appears to be the best financing alternative.

Which is generally considered to be the first step in strategic planning? A) Developing a vision statement B) Establishing goals and objectives C) Making a profit D) Developing a mission statement E) Determining opportunities and threats

A) Developing a vision statement

What is the first step in the comprehensive strategic-management model? A) Developing vision and mission statements B) Performing external audits C) Performing internal audits D) Measuring and evaluating performance E) Establishing long-term objectives

A) Developing vision and mission statements

Which of the following is NOT a characteristic that describes the most competitive companies in America? A) Divestiture is essential to growth. B) Hire and retain the best employees and managers possible. C) Continually adapt, innovate, improve—especially when the firm is successful. D) Strive to stay cost-competitive on a global basis. E) Whether it's broke or not, fix it.

A) Divestiture is essential to growth.

Medium-sized firms tend to use which type of structure? A) Divisional B) Matrix C) SBU D) Functional E) Centralized

A) Divisional

In the BCG Matrix, a division that has a low relative market share position and competes in a slow-growth industry is referred to as a A) Dog. B) Question Mark. C) Star. D) Cash Cow. E) Cowboy.

A) Dog.

________ countries are market leaders in labor-intensive industries and ________ offers abundant natural resources and rapidly developing markets. A) East Asian; Brazil B) South American; Germany C) East Asian; Germany D) South American; Brazil E) European; Japan

A) East Asian; Brazil

During what stage of strategic management are 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

Amazon installing "Amazon Lockers" in grocery, 7-Eleven, and drugstores that accept packages for later pickup, in order to combat issues with missing deliveries or having packages stolen, is an example of which type of strategy? A) Forward integration B) Backward integration C) Horizontal integration D) Related diversification E) Unrelated diversification

A) Forward integration

Which of the following was among the most admired companies for social responsibility in 2012 according to Fortune magazine? A) GDF Suez B) China Railway Group C) China Railway Construction D) China State Construction Engineering E) Kirin Holdings

A) GDF Suez

The percentage of persons age 65 or older exceeds 20 percent in Japan, Italy, and A) Germany. B) the USA. C) France. D) China. E) All of the above

A) Germany.

Standard and Poor's Industry Surveys include all of the following sections EXCEPT A) Historic Environment. B) Industry Trends. C) How to Analyze a Company. D) Glossary of Industry Terms. E) Comparative Company Financial Analysis.

A) Historic Environment.

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

The ________ is a network of the national standards institutes of 147 countries, one member per country. A) ISO B) EMS C) UN D) EPA E) IMF

A) ISO

________ is a set of standards in fields such as environmental auditing, performance evaluation, and labeling, that is adopted by thousands of firms worldwide to certify to their constituencies that they are conducting business in an environmentally friendly manner. A) ISO 14001 B) EMS 14000 C) UN 5000 D) SEC 100 E) A sustainability report

A) ISO 14001

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

A) Identifying key external factors in the industry

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

A) Input stage

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

A) Interpersonal

What percent of strategies formulated are successfully implemented? A) Less than 10 percent B) About 30 percent C) Between 40 and 60 percent D) Approximately 66 percent E) More than 80 percent

A) Less than 10 percent

What principle is based on the belief that the true measure of a really good strategist is the ability to solve problems? A) Managing by crisis B) Managing by objectives C) Managing by extrapolation D) Managing by exception E) Managing by hope

A) Managing by crisis

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 strategy seeks to increase market share for present products or services in present markets through greater marketing efforts? A) Market penetration B) Forward integration C) Market development D) Backward integration E) Product development

A) Market penetration

According to Campbell and Yeung, what is/are most likely associated with behavior and the present? A) Mission B) Values C) Long-term objectives D) Vision E) Possibilities

A) Mission

It is predicted that the United States will have how many racial or ethnic majorities by the year 2075? A) None B) One C) Two D) Three E) Five

A) None

Research suggests that which of the following is one of the best ways to overcome individuals' resistance to change in strategy evaluation? A) Participation B) Command-and-control C) Laissez-faire system D) Rational argument E) Emotional reactions

A) Participation

What entails developing schematic representations that reflect how your products or services compare to competitors' on dimensions most important to success in the industry? A) Perceptual mapping B) Market segmentation C) Market penetration D) Unrelated diversification E) Capital budgeting

A) Perceptual mapping

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

A) Planning

Which of the following is NOT a reason for the increasing difficulty of evaluating strategies? A) Product life cycles are longer. B) Domestic and world economies are less stable. C) Product development cycles are shorter. D) Technological advancement is more rapid. E) Change is occurring more frequently.

A) Product life cycles are longer.

In the BCG Matrix, how would a division with a low relative market share position in a high growth industry be described? A) Question Mark B) Cash Cow C) Star D) Stuck-in-the-middle E) Dog

A) Question Mark

________ perhaps has instituted the most protectionist measures in recent months by raising tariffs on most imports and subsidizing its own exports. A) Russia B) The United States C) The EU D) India E) Switzerland

A) Russia

All of the following are mentioned as places where vision and mission statements can often be found EXCEPT A) SEC reports. B) annual reports. C) customer service agreements. D) supplier agreements. E) business plans.

A) SEC reports.

Which of the following is NOT one of the four perspectives from which the Balanced Scorecard allows firms to evaluate strategies? A) Social responsibility B) Financial performance C) Customer knowledge D) Internal business processes E) Learning and growth

A) Social responsibility

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

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) Star. B) Cash Cow. C) Cat. D) Question Mark. E) Dog.

A) Star.

What becomes a more attractive financing technique when cost of capital is high? A) Stock issuance B) Debt C) Cost cutting D) Borrowing E) Staying privately owned

A) Stock issuance

What are the means by which long-term objectives will be achieved? A) Strategies B) Strengths C) Weaknesses D) Policies E) Opportunities

A) Strategies

Which of the following is NOT one of the nine recommended components of a mission statement? A) Strategies B) Self-concept C) Concern for employees D) Markets E) Customers

A) Strategies

Which individuals are most responsible for the success and failure of an organization? A) Strategists B) Financial planners C) Personnel directors D) Stakeholders E) Human resource managers

A) Strategists

________ 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

Which state generates the greatest number of megawatts of wind power? A) Texas B) Iowa C) California D) Minnesota E) New Jersey

A) Texas

The attitude of U.S. firms toward research and development is best described by which of the following? A) The veil of secrecy is being lifted, resulting in more collaboration. B) Firms are more cutthroat than ever and less cooperative with each other. C) Firms are less interested in working with universities. D) Firms are feeling less competitive pressure. E) Firms are less involved with research consortia than ever.

A) The veil of secrecy is being lifted, resulting in more collaboration.

Which of the following is NOT true regarding stock issuances? A) They are always better than debt for raising capital. B) Their effect on stock price is a concern. C) They can require a company to share future earnings with all new shareholders. D) Dilution of ownership is a special concern. E) All of the above statements are true.

A) They are always better than debt for raising capital.

Who does a planning horizon of two to five years apply to? A) Top-level management B) General management C) Middle-level management D) Lower-level management E) All levels of management

A) Top-level management

What term is defined as the product of multiplying the weights by the Attractiveness Scores in each row of the QSPM? A) Total Attractiveness Scores B) Sum Total Scores C) Weighted Scores D) Total Weighted Scores E) Factors

A) Total Attractiveness Scores

________ is NOT a major factor that commonly prohibits effective resource allocation. A) Underprotection of resources B) Organizational politics C) Having vague strategy targets D) A reluctance to take risks E) A lack of sufficient knowledge

A) Underprotection of resources

According to Drucker, which question is synonymous with asking "What is our mission?" A) What is our business? B) How can we improve ourselves? C) What do we want to become? D) Who are our stakeholders? E) How can we increase profitability?

A) What is our business?

________ refers to policies that require employees to report any unethical violations they discover or see in the firm. A) Whistle-blowing B) Bribery C) Adultery D) Sustainability E) Stewardship

A) Whistle-blowing

In the context of a balance sheet, goodwill represents A) a premium paid over the book value of an acquisition. B) the value attached to a firm's reputation. C) the excess of assets over liabilities. D) the value associated with benefits from environmental programs. E) the excess of current assets over liabilities.

A) a premium paid over the book value of an acquisition.

Unpublished sources of external strategic information include all of the following EXCEPT A) abstracts. B) customer surveys. C) market research. D) speeches at professional and shareholders' meetings. E) conversations with stakeholders.

A) abstracts.

Controls need to be ________ rather than ________. A) action-oriented; information-oriented B) cultural; political C) qualitative; quantitative D) measurable; timely E) universal; diverse

A) action-oriented; information-oriented

Retained earnings is obtained by subtracting A) any dividends to be paid for that year from net income. B) net income from EBIT. C) taxes from EBIT. D) interest expense from EBIT. E) EBIT from CGS.

A) any dividends to be paid for that year from net income.

Marketing managers in Japan see making a sale ________ the selling process. A) as the beginning of B) as the end of C) as the midpoint of D) as unrelated to E) None of the above

A) as the beginning of

Strategic management enables an organization to ________, instead of just responding to threats in its business environment. A) be proactive B) be immune to threats C) avoid responsibility for shaping its future D) relinquish control over its destiny E) be reactive

A) be proactive

Bribery involves A) bestowing a gift to influence the recipient's conduct. B) requiring employees to report any unethical violations they discover or see in the firm. C) prohibiting love affairs between bosses and their subordinates. D) encouraging firms to play a role in curing society of its ills. E) forcing companies to take responsibility for the impact their actions have on society.

A) bestowing a gift to influence the recipient's conduct.

79) The Internet has transferred power from ________ to ________. A) businesses, individuals B) governments, businesses C) individuals, businesses D) businesses, governments E) individuals, governments

A) businesses, individuals

All stakeholders' claims on an organization ________ pursued with equal emphasis. A) cannot be B) should always be C) are required to be D) must ideally be E) can usually be

A) cannot be

Anything that a firm does especially well compared to rival firms is referred to as A) competitive advantage. B) comparative disadvantage. C) opportunity cost. D) unsustainable advantage. E) an external opportunity.

A) competitive advantage.

The IFE Matrix should be ________ in multidivisional firms. A) constructed for each division B) all-inclusive C) constructed only for the major divisions D) developed before the EFE Matrix E) revised monthly

A) constructed for each division

Mass communication and high technology have ________ in diverse cultures worldwide. A) created similar patterns of consumption B) resulted in highly individualized patterns of consumption C) rendered patterns of consumption identical D) had little to no effect on patterns of consumption E) ignored patterns of consumption

A) created similar patterns of consumption

In low-earning periods, too much ________ in the capital structure of an organization can endanger stockholders' return and jeopardize company survival. A) debt B) liquidity C) equity D) cash E) tax liability

A) debt

The various opportunities and threats that face multinational corporations are almost limitless, and the number and complexity of these factors ________ the number of products and the number of geographic areas served. A) decrease dramatically with B) drastically increase with C) drop slightly with D) are constant despite E) are unaffected by

A) decrease dramatically with

An overly general mission statement that ________ could be dysfunctional. A) does not exclude any strategy alternatives B) encourages management creativity C) excludes all diversification D) endorses the consideration of feasible potential strategies E) allows for the generation and consideration of a range of alternative objectives

A) does not exclude any strategy alternatives

Organizational resources include all of the following EXCEPT A) employee training. B) firm structure. C) planning processes. D) information systems. E) copyrights.

A) employee training.

Walmart encourages its employees to adopt "Personal Sustainability Projects" like weight-loss or smoking-cessation support groups, illustrating that A) employee wellness can be a part of sustainability. B) employee health issues have no business in the workplace. C) firms should crack down on employees' personal interests infringing upon business hours. D) the Global Reporting Initiative requires this of all U.S. companies. E) a company's interest in its employees should be restricted solely to their work duties.

A) employee wellness can be a part of sustainability.

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.

Multinational corporations face unique and diverse risks, which include all of the following EXCEPT A) favorable foreign court interpretations of contracts and agreements. B) currency losses through exchange rate fluctuations. C) social/political disturbances. D) import/export restrictions. E) tariffs.

A) favorable foreign court interpretations of contracts and agreements.

It is ________ for a business to provide a sustainability report annually to the public. A) good business B) irresponsible C) a decreasing trend D) unethical E) poor planning

A) good business

Desire for ________ is a part of the social fabric in worker-manager relations in Mexico. A) harmony B) friction C) conflict D) independence E) punctuality

A) harmony

All stakeholders A) have claims and concerns about an organization, but these claims and concerns vary. B) have the same claims and concerns about an organization. C) have ownership rights in an organization. D) have the same voting rights in an organization. E) have environmental concerns as their top priority.

A) have claims and concerns about an organization, but these claims and concerns vary.

Firms should strive to engage in social activities that A) have economic benefits. B) have no economic benefits. C) are detrimental to economic growth. D) drain financial resources. E) garner goodwill only, not profits.

A) have economic benefits.

Without assumptions, planning would be A) impossible. B) easier. C) difficult. D) inexpensive. E) intuitive.

A) impossible.

Unethical activities that plague online commerce include all of the following EXCEPT A) inappropriate gifts. B) spreading viruses. C) identity theft. D) Internet fraud. E) hacking into company computers.

A) inappropriate gifts.

An effective mission statement should do all of the following EXCEPT A) include monetary amounts, numbers, percentages and ratios. B) be inspiring. C) reveal that the firm is environmentally responsible. D) identify the utility of a firm's products. E) be reconciliatory.

A) include monetary amounts, numbers, percentages and ratios.

With the passage of time strategy evaluation is becoming A) increasingly difficult. B) much simpler. C) very convenient. D) an unnecessary activity. E) less important.

A) increasingly difficult.

Strategy evaluation is necessary because A) internal and external factors are constantly changing. B) the SEC requires strategy evaluation. C) success today is a guarantee of success tomorrow. D) the IRS requires strategy evaluation. E) firms have limited resources.

A) internal and external factors are constantly changing.

A company website ________ information about a firm. A) is a good place to start to find B) is not a reliable source of C) is only acceptable as a last resort for D) should not be used as the first place to look for E) is a waste of time when searching for

A) is a good place to start to find

Changing a strategy to fit an existing culture A) is usually less effective than changing a firm's culture to fit a new strategy. B) is usually more effective than changing a firm's culture to fit a new strategy. C) is just as effective as changing a firm's culture to fit a new strategy. D) is always the best option. E) none of the above

A) is usually less effective than changing a firm's culture to fit a new strategy.

According to McGinnis, a mission statement should be all of the following EXCEPT A) it should be broad enough to include all ventures. B) it should be stated in clear terms. C) it should distinguish an organization from all others. D) it should define what an organization is. E) it should serve as a framework for evaluating both current and prospective activities.

A) it should be broad enough to include all ventures.

According to the text, the first social responsibility of any business is to A) make enough profit to cover the costs of the future, because if this is not achieved then no other social responsibility can be met. B) avoid laying off employees so as to protect the employees' livelihood, even if that decision may force the firm to liquidate. C) engage in social activities that have no economic benefits, to avoid the appearance of a public relations gimmick. D) offer courses and training in environmental management. E) None of the above

A) make enough profit to cover the costs of the future, because if this is not achieved then no other social responsibility can be met.

Opportunity analysis is one of the basic functions of A) marketing. B) finance/accounting. C) computer information systems. D) production/operations E) research and development.

A) marketing.

Too much emphasis on evaluating strategies A) may be expensive and counterproductive. B) is not possible - the more emphasis the better. C) is good for morale, as employees like being closely evaluated. D) is always advised if the firm can afford it. E) is worse than too little or no evaluation.

A) may be expensive and counterproductive.

It has become ________, since uniform standards defining environmentally responsible company actions are rapidly being incorporated into our legal landscape. A) more and more difficult for firms to make "green" claims when their actions are not substantive or even true B) increasingly easy for firms to get away with placing "green" terminology on their products without any oversight C) customary for firms to use terms like "organic," "green," or "earth-friendly" when their products don't warrant it D) more common for consumers to be cynical about corporate environmental claims E) impossible for firms to omit "green" terminology from their labels

A) more and more difficult for firms to make "green" claims when their actions are not substantive or even true

Most strategy literature advocates that strategic management is A) more of a science than an art. B) more of an art than a science. C) based on analysis rather than research. D) based on intuition rather than analysis. E) based on creativity rather than intuition.

A) more of a science than an art.

According to research, organizations using strategic management are ________ than those that do not. A) more profitable B) more complex C) less profitable D) less successful E) less complex

A) more profitable

In an effort to manage ecological challenges, many companies are A) moving environmental affairs from the staff side of the organization to the line side. B) moving environmental affairs from the line side of the organization to the staff side. C) making the chief operating officer report directly to the corporate environmental group. D) omitting an environmental representative from their board of directors. E) purging environmental values from their mission statements.

A) moving environmental affairs from the staff side of the organization to the line side.

The strategy-evaluation process should foster A) mutual understanding. B) doubt. C) corporate culture. D) complexity. E) division.

A) mutual understanding.

The U.S. government's OPIC A) offers insurance to offset some risks of doing business internationally. B) provides insurance to eliminate all of the risks of doing business internationally. C) gives informational seminars about the risks associated with doing business internationally. D) requires that paperwork be filed by U.S. companies desiring to do business internationally. E) discourages foreign companies from doing business in the United States.

A) offers insurance to offset some risks of doing business internationally.

Terms such as objectives, mission, strengths, and weaknesses were first formulated to address problems A) on the battlefield. B) in the boardroom. C) on the trading floor. D) in the military hierarchy. E) in interpersonal relationships.

A) on the battlefield.

A divisional structure by geographic area is most appropriate when A) organizations have similar branch facilities located in widely dispersed areas. B) an organization offers only a limited number of products or services. C) consumption patterns for its products and/or services are the same worldwide. D) the company's customers in different geographic locations have similar needs and characteristics. E) the firm serves one geographic area.

A) organizations have similar branch facilities located in widely dispersed areas.

Today, boards of directors are composed mostly of A) outsiders. B) management. C) union members. D) company employees. E) past executives.

A) outsiders.

The Robinson-Patman Act affects a company's A) pricing. B) product/service planning. C) customer analysis. D) marketing research. E) distribution.

A) pricing.

In general, U.S. managers feel the day has been productive if it is spent A) rushing to meetings and conferences. B) resting. C) listening. D) meditating. E) thinking.

A) rushing to meetings and conferences.

Business ethics, ________, and sustainability issues are interrelated and impact all areas of the comprehensive strategic-management model. A) social responsibility B) social networking C) fiscal irresponsibility D) cultural indifference E) None of the above

A) social responsibility

A code of business ethics is A) sorely needed in light of a new wave of ethical issues including product safety, employee health, and sexual harassment. B) concerned with what responsibilities the firm has to employees, consumers, environmentalists, minorities, communities, and other groups. C) a report that reveals how the firm's operations impact the natural environment. D) a set of strict regulations requiring firms to conserve energy. E) a series of voluntary standards in the environmental field.

A) sorely needed in light of a new wave of ethical issues including product safety, employee health, and sexual harassment.

A concern in matching managers with strategy is that jobs have relatively ________ responsibilities, while people are ________ in their personal development. A) static; dynamic B) dynamic; static C) quick; slow D) exciting; dull E) dull; exciting

A) static; dynamic

67) 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

Corrective actions should always A) strengthen an organization's competitive position in its industry. B) streamline asset holdings. C) have no risk. D) involve abandoning existing strategies. E) all of the above

A) strengthen an organization's competitive position in its industry.

One aspect of ads recently is that they A) take more direct aim at competitors. B) do not mention competitors. C) allude to competitors in a positive light. D) are less combative. E) none of the above

A) take more direct aim at competitors.

Perhaps the most dramatic new market segmentation strategy is the A) targeting of regional tastes. B) focusing on universal product. C) preference of international over domestic sales. D) treatment of industrial markets. E) none of the above

A) targeting of regional tastes.

The one factor that has most significantly impacted the nature and core of buying and selling in nearly all industries has been A) the Internet. B) political borders. C) corporate greed. D) customer and employee focus. E) the government.

A) the Internet.

The historical trend of people moving from ________ has dramatically slowed. A) the Northeast to the Sunbelt B) the West to the Midwest C) the Northeast to the Midwest D) the Sunbelt to the West E) the West to the Northeast

A) the Northeast to the Sunbelt

A benefit of using projected balance sheets and income statements is that A) the impact of various implementation decisions can be forecasted. B) money can be put aside to pay future income taxes. C) insurance needs can be computed. D) it is useful in analyzing past performance. E) all of the above

A) the impact of various implementation decisions can be forecasted.

Market commonality can be defined as A) the number and significance of markets that a firm competes in with rivals. B) the number and significance of points in common a firm has with its rivals. C) the extent to which the type of a firm's internal resources are comparable to a rival. D) the extent to which the amount of a firm's internal resources are comparable to a rival. E) none of the above

A) the number and significance of markets that a firm competes in with rivals.

Social policy can best be defined as A) the responsibilities a firm has to employees, consumers, environmentalists, minorities, communities, shareholders, and other groups. B) a document providing behavioral guidelines that cover daily activities and decisions within a firm. C) an SEC mandate to report any unethical behavior. D) the legal requirement to reveal how a firm's operations impact the natural environment. E) mandatory technical standards that result in an environmental management system.

A) the responsibilities a firm has to employees, consumers, environmentalists, minorities, communities, shareholders, and other groups.

Americans place an exceptionally high priority on ________ whereas many foreigners place more worth on ________. A) time; relationships B) relationships; time C) silence; time D) silence; relationships E) formality; informality

A) time; relationships

All of the following are examples of marketing decisions that may require policies EXCEPT A) to be a market leader or follower. B) how to make advertisements more interactive to be more effective. C) to offer a complete or limited warranty. D) to use heavy, light, or no TV advertising. E) to use exclusive dealerships or multiple channels of distribution.

A) to be a market leader or follower.

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.

All of these are pitfalls an organization should avoid in strategic planning EXCEPT A) using plans as a standard for measuring performance. B) using strategic planning to gain control over decisions and resources. C) failing to involve key employees in all phases of planning. D) too hastily moving from mission development to strategy formulation. E) being so formal in planning that flexibility and creativity are stifled.

A) using plans as a standard for measuring performance.

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

All of the following are basic functions of marketing EXCEPT A) value chain analysis. B) customer analysis. C) product and service planning. D) pricing. E) distribution.

A) value chain analysis.

Life-directing attitudes that serve as behavioral guidelines are called A) values. B) rites. C) beliefs. D) metaphors. E) legends.

A) values.

In which situation would horizontal integration be an especially effective strategy? A) when an organization can gain monopolistic characteristics in a particular area or region without being challenged by the federal government for "tending substantially" to reduce competition B) when an organization competes in a slowing industry C) when decreased economies of scale provide major competitive advantages D) when an organization has neither the capital nor human talent needed to successfully manage an expanded organization E) when competitors are succeeding due to managerial expertise or having particular resources an organization possesses

A) when an organization can gain monopolistic characteristics in a particular area or region without being challenged by the federal government for "tending substantially" to reduce competition

A firm's power and prestige in domestic markets may be significantly enhanced if the firm competes globally A) which can translate into improved negotiating power among important groups. B) though this rarely results in a practical advantage. C) but this can hurt its bargaining power with suppliers and distributors. D) yet this does nothing to improve its position with creditors. E) which can alienate the firm from its domestic creditors, suppliers, and distributors.

A) which can translate into improved negotiating power among important groups.

What are the three commonly used strategies or approaches for implementing changes in an organization? Give an advantage and/or disadvantage for each type of approach.

Although there are various approaches for implementing changes, three commonly used strategies are a force change strategy, an educative change strategy, and a rational or self-interest change strategy. A force change strategy involves giving orders and enforcing those orders; this strategy has the advantage of being fast, but low commitment and high resistance plague it. An educative change strategy is one that presents information to convince people of the need for change; the disadvantage of an educative change strategy is that implementation becomes slow and difficult. However, this type of strategy evokes greater commitment and less resistance than does the force change strategy. Finally, a rational or self-interest change strategy is one that attempts to convince individuals the change is to their personal advantage. When this appeal is successful, strategy implementation can be relatively easy.

Explain the nature and role of ESOPs in strategic management.

An ESOP is a tax-qualified, defined-contribution, employee-benefit plan whereby employees purchase stock of the company through borrowed money or cash contributions. ESOPs empower employees to work as owners. Besides reducing worker alienation and stimulating productivity, ESOPs allow firms other benefits, such as substantial tax savings. Principal, interest, and dividend payments on ESOP-funded debt are tax-deductible. Banks lend money to ESOPs at interest rates below prime. This money can be repaid in pretax dollars, lowering the debt service as much as 30 percent in some cases.

A total weighted score of ________ in an EFE Matrix indicates that the firm's strategies are NOT capitalizing on opportunities or avoiding external threats. A) 0.0 B) 1.0 C) 2.5 D) 3.3 E) 4.0

B) 1.0

International financial reporting standards (IFRS) comprise approximately ________ pages. A) 1,000 B) 5,000 C) 10,000 D) 25,000 E) 100,000

B) 5,000

What occurs when two or more companies form a temporary partnership or consortium for the purpose of capitalizing on some opportunity? A) Retrenchment B) A joint venture C) Liquidation D) Forward integration E) Divestiture

B) A joint venture

Which of the following sectors of the economy would be most impacted by technological developments? A) Forestry B) Aeronautics C) Textiles D) Metals E) Cloth

B) Aeronautics

________ is NOT part of an external audit. A) Analyzing competitors B) Analyzing financial ratios C) Analyzing available technologies D) Studying the political environment E) Analyzing social, cultural, demographic and natural environment forces

B) Analyzing financial ratios

How should financial budgets be thought of? A) As a tool for limiting expenditures B) As a method for obtaining the most productive and profitable use of an organization's resources C) As a method for rationing the profits from the past year D) As a method for determining who should receive the largest pay raise E) As a tool for forecasting future profits

B) As a method for obtaining the most productive and profitable use of an organization's resources

The process of developing a vision and mission statement often includes which of these as the first activity? A) Requesting that managers modify the current document B) Asking managers to read selected articles about mission statements C) Asking managers to prepare a mission statement for the organization D) Having a brainstorming session on whether the organization should have a mission statement E) Merging several mission statements into one document

B) Asking managers to read selected articles about mission statements

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

B) Backward integration

What is the best divisional structure when a few major customers are of paramount importance and many different services are provided to these customers? A) By geographic area B) By customer C) By product D) By process E) By cost

B) By customer

In the BCG Matrix, a division with a high relative market share position in a low-growth industry can be described as a A) Star. B) Cash Cow. C) Question Mark. D) Dog. E) Failure.

B) Cash Cow.

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

B) Conservative

What term refers to the need for strategists to examine sets of trends, as well as individual trends, in evaluating strategies? A) Consistency B) Consonance C) Synergy D) Feasibility E) Advantage

B) Consonance

________ includes the set of shared values, beliefs, attitudes, customs, norms, personalities, heroes and heroines that describe a firm. A) Strategy B) Culture C) Mission D) Objectives E) QSPM

B) Culture

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." A) Markets B) Customers C) Concern for Employees D) Concern for Public Image E) Technology

B) Customers

What type of strategy would divestiture be classified as? A) Aggressive B) Defensive C) Competitive D) Offensive E) Conservative

B) Defensive

Which of these is a potential problem associated with using only quantitative criteria for selecting strategies? A) Most quantitative criteria are geared to long-term objectives rather than annual objectives. B) Different accounting methods can provide different results on many quantitative criteria. C) Intuitive judgments are never used in deriving quantitative criteria. D) Quantitative criteria include human factors that may be underlying causes of declining performance. E) Quantitative criteria are not able to compare the firm's performance over different period of time.

B) Different accounting methods can provide different results on many quantitative criteria.

Which of the following is NOT true concerning the Japanese concept of Wa? A) Nearly all corporate activities in Japan encourage Wa among managers and employees. B) Discussions potentially disruptive to Wa are generally conducted in very formal settings. C) The potential attractiveness of alternative business decisions are evaluated in terms of their long-term effect on the group's Wa. D) Entertaining is an important business activity in Japan because it strengthens Wa. E) The Wa concept involves group loyalty and consensus.

B) Discussions potentially disruptive to Wa are generally conducted in very formal settings.

Which strategy should be implemented when a division is responsible for an organization's overall poor performance? A) Backward integration B) Divestiture C) Forward integration D) Cost leadership E) Related diversification

B) Divestiture

Which term refers to selling a division of an organization? A) Joint venture B) Divestiture C) Concentric diversification D) Liquidation E) Horizontal integration

B) Divestiture

________ allows firms to sell products, advertise, purchase supplies, bypass intermediaries, track inventory, and eliminate paperwork. A) Social networking B) E-commerce C) Blogging D) Viral video E) "Trading down"

B) E-commerce

What is the most widely used technique for determining the best combination of debt and stock? A) Debt-to-stock ratio B) Earnings per share/earnings before interest and taxes analysis C) Gross profit analysis D) Capital asset pricing model E) Present value analysis

B) Earnings per share/earnings before interest and taxes analysis

What challenge facing all organizations requires managers to formulate strategies that preserve and conserve natural resources and control pollution? A) Economic B) Ecological C) Compensational D) Benchmarking E) Sociological

B) Ecological

Which of the following are NOT mentioned as an example of cultural products? A) Rites B) Emotions C) Rituals D) Sagas E) Symbols

B) Emotions

Which of these examples of a mission statement's focus area does NOT identify the utility of the firm's products to its customers? A) AT&T focuses on communication rather than telephones. B) ExxonMobil focuses on oil and gas rather than energy. C) Union Pacific focuses on transportation rather than railroads. D) Universal Studios focuses on entertainment rather than movies. E) A clothing retailer focuses on attractive looks rather than on clothes.

B) ExxonMobil focuses on oil and gas rather than energy.

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

B) Forecasts

What type of organizational structure promotes specialization of labor and allows rapid decision making? A) Divisional structure by product B) Functional structure C) Divisional structure by customer D) Strategic business unit E) Matrix structure

B) Functional structure

A revised ________ should focus on changes in the organization's management, marketing, finance and accounting, production and operations, research and development (R&D), and management information systems (MIS) strengths and weaknesses. A) mission B) IFE matrix C) vision D) EFE matrix E) EPM matrix

B) IFE matrix

Although Quadrant ________ companies are growing, according to the Grand Strategy Matrix they are unable to compete effectively, and they need to determine why the firm's current approach is ineffective and how the company can best change to improve its competitiveness. A) I B) II C) III D) IV E) V

B) II

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"

Which company estimates wellness programs have cumulatively saved the company $250 million on health-care costs in the past decade? A) Ford Motor Company B) Johnson & Johnson C) Coca-Cola D) TJX E) Boeing

B) Johnson & Johnson

________ can enable firms to learn the technology, culture, and business practices of other people and to make contacts with potential customers, suppliers, creditors, and distributors in foreign countries. A) Economies of scale B) Joint ventures C) Low-cost production facilities D) Reduced tariffs E) Domestic operations

B) Joint ventures

What category of ratios measures a firm's ability to meet maturing short-term obligations? A) Profitability B) Liquidity C) Leverage D) Activity E) Growth

B) Liquidity

When two organizations of about equal size unite to form one enterprise, which of these occurs? A) Hostile takeover B) Merger C) Acquisition D) Leveraged buyout E) Divestiture

B) Merger

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

B) Mission statements

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

B) Motivating

Which of the following is in keeping with the current view of organizational change? A) Organizational change is a project. B) Organizational change is a continuous process. C) Organizational change is an event. D) Organizational change involves unfreezing behavior, changing the behavior, and then refreezing the new behavior. E) All of the above

B) Organizational change is a continuous process.

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

B) Organizing

Which function of management is concerned with span of control and chain of command? A) Planning B) Organizing C) Controlling D) Staffing E) Motivating

B) Organizing

Which variable would be considered part of the "product" element of the marketing mix? A) Advertising B) Packaging C) Payment terms D) Inventory levels and location E) Publicity

B) Packaging

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

What is the essential bridge between the present and the future that increases the likelihood of achieving desired results? A) Motivating B) Planning C) Controlling D) Staffing E) Organizing

B) Planning

What term is used to describe specific guidelines, methods, procedures, rules, forms and administrative practices established to support and encourage work toward stated goals? A) Long-term objectives B) Policies C) Annual objectives D) Strategies E) Values

B) Policies

When an industry relies heavily on government contracts, which forecasts can be the most important part of an external audit? A) Economic B) Political C) Technological D) Competitive E) Multinational

B) Political

Which strategy is appropriate when an organization competes in an industry characterized by rapid technological developments? A) Retrenchment B) Product development C) Backward integration D) Liquidation E) Market penetration

B) Product development

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

B) Quantitative Strategic Planning Matrix

Which strategy is effective when new, but related, products could be offered at highly competitive prices? A) Forward integration B) Related diversification C) Backward integration D) Conglomerate diversification E) Unrelated diversification

B) Related diversification

Which strategy should an organization use when its products are currently in the declining stage of the product's life cycle? A) Divestiture B) Related diversification C) Backward integration D) Unrelated diversification E) Retrenchment

B) Related diversification

What is the term for a historical narrative describing the unique accomplishments of a group and its leaders? A) Rite B) Saga C) Story D) Myth E) Folktale

B) Saga

Which is NOT a required step in perceptual mapping? A) Select key criteria that effectively differentiate products or services in the industry. B) Serve two segments with the same strategy. C) Plot major competitors' products or services in the resultant matrix. D) Identify areas in the positioning map where the company's products or services could be most competitive in the given target market. E) Develop a marketing plan to position the company's products and services appropriately.

B) Serve two segments with the same strategy.

Which of the following statements is NOT true? A) Open-mindedness is an important guideline for effective strategic management. B) Strategic management must become a self-perpetuating bureaucratic mechanism. C) No organization has unlimited resources. D) Strategic decisions require trade-offs. E) Strategic management must be a self-reflective learning process.

B) Strategic management must become a self-perpetuating bureaucratic mechanism.

Which phase of strategic management is called the action phase? A) Strategy formulation B) Strategy implementation C) Strategy evaluation D) Competing advantages E) Measuring performance

B) Strategy implementation

What aims to balance long-term with short-term concerns, financial with nonfinancial concerns, and internal with external concerns? A) Contingency planning B) The Balanced Scorecard approach C) Taking corrective action D) Benchmarking E) Consonance

B) The Balanced Scorecard approach

Which of the following is true about two different market segments? A) They can usually be served with the same marketing strategy. B) They usually require different marketing strategies. C) They are always in different geographic locations. D) They are usually interchangeable. E) All of the above

B) They usually require different marketing strategies.

Which type of statement should be created first and foremost? A) Creed B) Vision C) Objectives D) Mission E) Competitive advantage

B) Vision

Which strategies aim at improving internal weaknesses by taking advantage of external opportunities? A) SO B) WO C) SW D) ST E) WT

B) WO

Which of the following illustrates the self-concept component of a mission statement? A) To earn our customer's loyalty, we listen to them, anticipate their needs, and act to create value in their eyes. 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. C) Our emphasis is on North American markets, although global opportunities will be explored. D) To compensate its employees with remuneration and 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.

What is the best time to develop a mission statement? A) When a firm is in decline B) When the firm is successful C) When the firm is in financial trouble D) When the firm is in legal trouble E) When the firm encounters competition

B) When the firm is successful

According to the U.S. Bureau of Labor Statistics, which of the following is TRUE? A) The percent of wage and salary workers who were members of a union in the USA increased from 2010 to 2011. B) Workers in education, training and library occupations had the highest unionization rate. C) Black workers were less likely to be union members than were white, Asian, or Hispanic workers. D) Private sector workers had a union membership rate more than five times higher that of public-sector workers. E) Among states, North Carolina had the highest union membership rate.

B) Workers in education, training and library occupations had the highest unionization rate.

A good mission statement has A) an employee orientation. B) a customer orientation. C) a shareholder orientation. D) an environmental orientation. E) a profit orientation.

B) a customer orientation.

A document that discloses to shareholders information about a firm's labor practices, product sourcing, energy efficiency, environmental impact, and business ethics practices is known as A) a code of ethics. B) a sustainability report. C) an EMS. D) ISO 14000. E) green terminology.

B) a sustainability report.

Both business and military organizations must ________ and ________ to be successful. A) be impervious to change; continually improve B) adapt to change; continually improve C) shun change; stay the course D) be impervious to change; stay the course E) none of the above

B) adapt to change; continually improve

The purpose of a mission statement is to declare all of these EXCEPT A) a reason for being. B) an annual financial plan. C) a statement of purpose. D) a statement of beliefs. E) whom it wants to serve.

B) an annual financial plan.

Alaska and oil companies contend that protections for polar bears ________. A) are not aggressive enough and must be strengthened B) are diminishing opportunities for Alaska energy development C) help push Alaskan companies to explore alternative energy sources D) are ineffective and actually have caused populations in Alaska to decrease E) are long overdue and must be enacted immediately

B) are diminishing opportunities for Alaska energy development

The process of performing an external audit needs to include A) only top level managers, as it is a planning function. B) as many managers and employees as possible. C) primarily front-line supervisors. D) between 15 to 20 managers for it to be valid. E) stockholders and external government agencies.

B) as many managers and employees as possible.

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.

Corrective action should do all of the following EXCEPT A) capitalize upon internal strengths. B) avoid external opportunities. C) avoid external threats. D) improve internal weaknesses. E) strengthen an organization's competitive position.

B) avoid external opportunities.

To avoid paying U.S. taxes on income made in other countries, many U.S. companies are ________ outside the USA but ________ inside the USA. A) cash-poor; cash-rich B) cash-rich; cash-poor C) unincorporated; incorporated D) cash-poor; incorporated E) unincorporated; cash-rich

B) cash-rich; cash-poor

The strategic-management process for multinational firms is ________ for purely domestic firms, and the process is ________ for international firms. A) conceptually the same as; more simple B) conceptually the same as; more complex C) conceptually different than; more simple D) conceptually different than; more complex E) conceptually the same; less important

B) conceptually the same as; more complex

A disagreement between two or more parties on one or more issues is called a(n) A) integrated solution. B) conflict. C) compromise. D) diffusion. E) avoidance.

B) conflict.

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

B) conflict; competition

A proactive environmental policy is likely to lead to A) higher cleanup costs. B) conservation of energy. C) reduced customer loyalty. D) numerous liability suits. E) higher medical costs.

B) conservation of energy.

Long-term objectives should be all of the following EXCEPT A) measurable. B) continually changing. C) reasonable. D) challenging. E) consistent.

B) continually changing.

The primary benefit sought from restructuring is A) employee involvement. B) cost reduction. C) increased morale. D) increased number of hierarchical levels in the organization. E) increased innovation.

B) cost reduction.

Just-in-time describes A) implementing strategies just before bankruptcy. B) delivering materials just as they are needed. C) a scheduling method for meetings. D) a personnel planning method. E) a process for improving quality.

B) delivering materials just as they are needed.

An area on a perceptual map without ideal points indicates a A) market segment. B) demand void. C) vacant niche. D) multidimensional scale. E) product reposition.

B) demand void.

Bad ethics can ________ strategic plans. A) derail all but the best B) derail even the best C) derail only poorly-intentioned D) derail only ill-conceived E) never affect

B) derail even the best

A firm's strengths that cannot be easily matched or imitated by competitors are called A) internal audits. B) distinctive competencies. C) external audits. D) interrelated properties. E) internal properties.

B) distinctive competencies.

The lingering high underemployment rate in the U.S. is an example of a(n) ________ force affecting business. A) social B) economic C) cultural D) technological E) historical

B) economic

Business analytics A) is retrospective rather than predictive. B) enables a firm to learn from experience and to make current and future decisions based on prior information. C) uses mathematical models that enhance decision making at only the topmost levels of management. D) can enable a company to benefit from measuring risk, but it cannot enable the company to manage risk. E) as an industry is experiencing a decline in revenue.

B) enables a firm to learn from experience and to make current and future decisions based on prior information.

The European Parliament in late 2012 voted with an overwhelming 566-47 margin to A) reinstate commercial whaling. B) eradicate the practice of shark finning. C) add polar bears to the list of endangered species. D) outlaw international trade in ivory. E) None of the above

B) eradicate the practice of shark finning.

According to Rumelt, the final broad test of strategy is its A) advantage. B) feasibility. C) consonance. D) consistency. E) distinctiveness.

B) feasibility.

The fact that Apple has no manufacturing facilities of its own A) has caused it to build up massive debt on its balance sheet. B) has enabled it to remain financially lean with virtually no long-term debt. C) has been problematic for Apple in terms of debt. D) illustrates that having more fixed assets than rival firms can provide major competitive advantages in a global recession. E) means that it is in the same position as Sony.

B) has enabled it to remain financially lean with virtually no long-term debt.

Whenever new firms can easily enter a particular industry, the intensity of competitiveness among firms tends to A) stay the same. B) increase. C) decrease. D) neutralize. E) become irrelevant.

B) increase.

In South Korea, activities involve concern for ________, or harmony based on respect of hierarchical relationships, including obedience to authority. A) guanxi B) inhwa C) feng shui D) nemaswashio E) Wa

B) inhwa

Competition in virtually all industries is A) nonexistent. B) intense. C) never cutthroat. D) easily avoidable. E) insignificant.

B) intense.

Success today A) guarantees success tomorrow. B) is no guarantee of success tomorrow. C) should lull a firm into complacency. D) is all that really matters. E) none of the above.

B) is no guarantee of success tomorrow.

Financial objectives involve all of the following EXCEPT A) growth in revenues. B) larger market share. C) higher dividends. D) greater return on investment. E) a rising stock price.

B) larger market share.

The times-interest-earned ratio would be classified as a(n) A) activity ratio. B) leverage ratio. C) profitability ratio. D) liquidity ratio. E) growth ratio.

B) leverage ratio.

Formal statements of organizational philosophy, charters, creeds, materials used for recruitment and selection, and socialization help an organization A) abide by SEC laws. B) link culture to strategy. C) set guidelines for firing. D) increase profits. E) manage conflicts between stakeholders.

B) link culture to strategy.

Corrective actions are almost always ________ except when external and internal factors have not significantly changed and the firm is progressing satisfactorily toward achieving stated objectives. A) unnecessary B) needed C) undesirable D) prohibitively expensive E) futile

B) needed

U.S. managers in Japan have to be careful about ________, whereby Japanese workers expect supervisors to alert them privately of changes rather than informing them in a meeting. A) feng shui B) nemaswashio C) Wa D) guanxi E) inhwa

B) nemaswashio

When companies take over functional operations of other firms, such as human resources, information systems, payroll, accounting, or customer service, this is called A) marketing. B) outsourcing. C) licensing. D) franchising. E) divestiture.

B) outsourcing.

Not all sectors of the economy are equally affected by technological developments; the ________ industry is much more volatile than the ________ industry. A) textile; communications B) pharmaceutical; forestry C) metals; electronics D) forestry; communications E) textile; pharmaceutical

B) pharmaceutical; forestry

Competitive advantage normally is the result of superiority in resources, skills, or A) employees. B) position. C) consistency. D) feasibility. E) governance.

B) position.

All of the following business actions are considered to be unethical EXCEPT A) moving jobs overseas. B) preventing environmental harm. C) overpricing. D) sexual harassment. E) insider trading.

B) preventing environmental harm.

High corporate tax rates A) encourage investment in new factories. B) provide strong incentives to avoid and evade taxes. C) attract foreign investors. D) make a nation a desirable location for investment. E) have been a growing trend since the 1980s.

B) provide strong incentives to avoid and evade taxes.

Also important in evaluating strategies are ________ criteria, like high absenteeism and turnover rates, or low employee satisfaction. A) numerical B) qualitative C) quantitative D) accounting E) financial

B) qualitative

In an industry that is, or is rapidly becoming global, the riskiest possible posture is to A) become a global competitor. B) remain a domestic competitor. C) remain a global competitor. D) expand beyond the role of domestic competitor. E) none of the above

B) remain a domestic competitor.

Evaluating the worth of a firm A) is an exact science. B) requires both qualitative and quantitative skills. C) is based solely on financial facts. D) is known only to the firm's accountants.

B) requires both qualitative and quantitative skills.

Strategy formulation A) is managing forces during the action. B) requires coordination among a few individuals. C) is primarily an operational process. D) requires special motivation and leadership skills. E) all of the above

B) requires coordination among a few individuals.

Rumelt's criteria of consonance refers to the need for strategists to examine A) inconsistent goals. B) sets of trends. C) impractical objectives. D) competitive advantages. E) the costs associated with particular strategies.

B) sets of trends.

An effective way to gain commitment and achieve desired results is to A) emphasize that imposing a particular method is more important than achieving desired results. B) shift from specific to general issues and concerns. C) eliminate middle level managers from strategic decisions. D) switch from long-term to short-term issues and concerns. E) realize that it's better to achieve optimal results with an unpopular strategy than to achieve satisfactory results with a popular strategy.

B) shift from specific to general issues and concerns.

Metaphors are A) several rites connected together. B) shorthand of words used to capture a vision or to reinforce old or new values. C) narratives based on true events. D) fictional stories. E) any objects, acts, events, qualities, or relations used to convey meaning.

B) shorthand of words used to capture a vision or to reinforce old or new values.

With regard to the visible or hidden issue, most executives agree that A) the SEC should regulate whether or not companies make their strategic information visible. B) some strategic information should remain confidential to top managers. C) a company has gone too far when it takes steps to ensure that strategic information is not disseminated beyond "the inner circle." D) the potential benefit of improved employee and stakeholder motivation and input is not worth the risk of rival firms easily knowing and exploiting a firm's strategies. E) keeping strategies secret from employees and stakeholder will likely improve communication, understanding, and commitment.

B) some strategic information should remain confidential to top managers.

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

Which of the following is NOT a published source of external strategic information? A) periodicals B) television programs C) journals D) reports E) directories

B) television programs

All of the following are limitations of the BCG Matrix EXCEPT A) viewing every business as a star, cash cow, dog or question mark can be an oversimplification. B) the Matrix requires at least three years worth of data. C) the Matrix does not reflect divisional or industry growth over time. D) the Matrix does not allow a company to be classified as somewhere in between two categories. E) variables such as size of market and competitive advantages are not considered in the Matrix.

B) the Matrix requires at least three years worth of data.

Which of the following has largely refrained from protectionist measures? A) the EU B) the U.S.A. C) India D) Russia E) All of the above

B) the U.S.A.

All of the following statements regarding the recent trend in Japan of switching from seniority-based pay to performance-based approaches are true EXCEPT A) the switch is an effort to cut costs. B) the switch is boosting employee morale. C) the switch is an effort to increase productivity. D) the switch opposes the traditional training of Japanese employees to cooperate rather than compete. E) the switch goes against decades of encouraging workers to work in groups instead of individually.

B) the switch is boosting employee morale.

The process whereby a firm determines the costs associated with organizational activities from purchasing raw materials to manufacturing products to marketing those products is called A) the resource-based approach. B) value chain analysis. C) strategic cost analysis. D) the internal factor evaluation matrix. E) cost-benefit analysis.

B) value chain analysis.

Under which condition would a differentiation strategy be especially effective? A) when there are few ways to differentiate the product or service that buyers perceive as having value B) when technological change is fast paced and competition revolves around rapidly evolving product features C) when most buyers use the product in the same way D) when many rival firms are following a similar differentiation approach E) when the differentiation base is easy or inexpensive for rivals to duplicate

B) when technological change is fast paced and competition revolves around rapidly evolving product features

In the BCG Matrix, which element represents the industry growth rate in sales, measured in percentage terms? A) x-axis B) y-axis C) first quadrant D) second quadrant E) third quadrant

B) y-axis

Discuss some things firms can do to diminish the risk of doing business internationally.

Before entering international markets, firms should scan relevant journals and patent reports, seek the advice of academic and research organizations, participate in international trade fairs, form partnerships, and conduct extensive research to broaden their contacts and diminish the risk of doing business in new markets. Firms can also offset some risks of doing business internationally by obtaining insurance from the U.S. government's Overseas Private Investment Corporation.

What is business analytics and why is it so important in businesses today?

Business analytics is an MIS technique that involves using software to mine huge volumes of data to help executives make decisions. Sometimes called predictive analytics, machine learning, or data mining, this software enables a researcher to assess and use the aggregate experience of an organization, a priceless strategic asset for a firm. The history of a firm's interaction with its customers, suppliers, distributors, employees, rival firms, and more can all be tapped with data mining to generate predictive models. Business analytics is similar to the actuarial methods used by insurance companies to rate customers by the chance of positive or negative outcomes. Therefore, like insurance companies, all businesses can benefit from measuring, tracking, and computing the risk associated with hundreds of strategic and tactical decisions made everyday. Business analytics enables a company to benefit from measuring and managing risk. As more and more products become commoditized, competitive advantage more and more hinges on improvements to business processes. Business analytics can provide a firm with proprietary business intelligence regarding which segment(s) of customers choose your firm versus those who defer, delay, or defect to a competitor and why. Business analytics can reveal where competitors are weak so that marketing and sales activities can be directly targeted to take advantage of resultant opportunities (knowledge). In addition to understanding consumer behavior better, business analytics is also being used to slash expenses.

Discuss how business ethics, social responsibility, and sustainability are interrelated.

Business ethics, social responsibility, and sustainability are interrelated and impact all areas of the comprehensive strategic-management model. Many people, for example, consider it unethical for a firm to be socially irresponsible. Social responsibility refers to actions an organization takes beyond what is legally required to protect or enhance the well-being of living things. Sustainability refers to the extent that an organization's operations and actions protect, mend, and preserve rather than harm or destroy the natural environment. Polluting the environment, for example, is unethical, irresponsible, and in many cases illegal.

Which of these is NOT a rule of thumb when using product positioning as a strategy-implementation tool? A) "The best opportunity might be an unserved segment." B) "Look for the hole or vacant niche." C) "Try to serve more than one segment with the same strategy." D) "Don't position yourself in the middle of the map." E) All of these are valid rules of thumb.

C) "Try to serve more than one segment with the same strategy."

If total fixed costs are $10,000, variable costs per unit are $5, and the price per unit is $15, what is the breakeven quantity? A) 500 B) 667 C) 1,000 D) 2,000 E) 5,000

C) 1,000

Which word or phrase would most be best to use in written objective statements? A) Maximize B) Minimize C) 10% increase D) Adequate E) As soon as possible

C) 10% increase

In 2012, ________ African countries held democratic elections. A) 3 B) 13 C) 23 D) 31 E) 43

C) 23

The average level of union membership across the whole of the European Union, weighted by the numbers employed in the different member states, is ________ percent compared to about ________ percent in the USA. A) 11; 23 B) 15; 44 C) 23; 11 D) 51; 26 E) 70; 30

C) 23; 11

Businessweek reports that firms using mission statements have a ________ percent higher return on certain financial measures than those without such statements. A) 10 B) 15 C) 30 D) 45 E) 50

C) 30

Which of these is the most common type of budgeting time frame? A) Daily B) Quarterly C) Annual D) Every decade E) Monthly

C) Annual

All of the following are key questions that can reveal internal strengths and weaknesses in the management department EXCEPT A) Is the organization's structure appropriate? B) Are reward and control mechanisms effective? C) Are the organization's products positioned well against competing products? D) Does the firm use strategic-management concepts? E) Do managers delegate authority well?

C) Are the organization's products positioned well against competing products?

Which ratio would be considered an activity ratio? A) Debt-to-equity B) Net profit margin C) Average collection period D) Earnings per share E) Current ratio

C) Average collection period

How do line managers become "owners" of the strategy? A) By attending top manager meetings B) By executing plans formulated by other people C) By involvement in the strategic-management process D) By becoming a shareholder of the firm E) By buying off top managers

C) By involvement in the strategic-management process

Which chapter of the bankruptcy code applies to municipalities? A) Chapter 7 B) Chapter 8 C) Chapter 9 D) Chapter 12 E) Chapter 13

C) Chapter 9

Which statement is NOT true? A) Having an effective management information system may be the most important factor in differentiating successful from unsuccessful firms. B) Like inventory and human resources, information is now recognized as a valuable organizational asset that can be controlled and managed. C) Computer vulnerability has been eradicated by recent innovations, and it is now possible to secure and safeguard all corporate communications, files, and business conducted over the Internet. D) In many firms, information technology is doing away with the workplace and allowing employees to work at home or anywhere, anytime. E) Improved quality and service often result from an improved management information system.

C) Computer vulnerability has been eradicated by recent innovations, and it is now possible to secure and safeguard all corporate communications, files, and business conducted over the Internet.

What has been shown to permit quick response to change, prevent panic in crisis situations, and make managers more adaptable? A) Auditing B) Implementing a Balanced Scorecard C) Contingency planning D) Taking corrective actions E) Measuring performance

C) Contingency planning

________ become(s) ________ only when evaluated, filtered, condensed, analyzed, and organized for a specific purpose, problem, individual, or time. A) Information; data B) Information; material C) Data; information D) Data; competitive advantages E) Competitive advantages; material

C) Data; information

Which of the following is NOT an accepted approach for determining a business' worth? A) Determining what the firm owns B) Determining what the firm earns C) Determining what the firm's return on investment has been D) Determining what the firm will bring in the market E) All of the above are accepted approaches.

C) Determining what the firm's return on investment has been

Which level of strategy is most likely NOT present in small firms? A) Company B) Functional C) Divisional D) Operational E) All of the above are present in small firms.

C) Divisional

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.

Who is referred to as "the father of modern management"? A) Cleland B) Campbell C) Drucker D) McGinnis E) Yeung

C) Drucker

A revised ________ should indicate how effective a firm's strategies have been in response to key opportunities and threats. A) IFE matrix B) mission C) EFE matrix D) vision E) CPM matrix

C) EFE matrix

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

C) FP and IP.

________ exemplifies the complexity of relationships among the functional areas of business. A) Government auditing B) External auditing C) Financial ratio analysis D) Environmental scanning E) Distribution strategy

C) Financial ratio analysis

Which of the three finance and accounting decisions concerns determining the best capital structure for the firm and includes examining various methods by which the firm can raise capital? A) Investment B) Dividend C) Financing D) Capital budgeting E) Implementation

C) Financing

According to Porter, which strategy offers products or services to a niche group of customers at the lowest price available on the market? A) Cost Leadership — Low Cost B) Cost Leadership — Best Value C) Focus — Low Cost D) Focus — Best Value E) Differentiation

C) Focus — Low Cost

What change strategy involves giving orders and enforcing those orders? A) Self-interest B) Educative C) Force D) Rational E) Defusion

C) Force

Websites that sell products directly to consumers are examples of which type of strategy? A) Backward integration B) Product development C) Forward integration D) Horizontal integration E) Conglomerate diversification

C) Forward integration

Which organizational structure is the most widely used? A) Departmental B) Strategic business unit C) Functional D) Decentralized E) Matrix

C) Functional

According to author Alvin Toffler, what occurs when the nature, types, and speed of changes overpower an individual's or organization's ability and capacity to adapt? A) Corporate insecurity B) Corrective actions C) Future shock D) Corporate agility E) Projected performance

C) Future shock

________ is a process of doing business worldwide, so strategic decisions are made based on global profitability of the firm rather than just domestic considerations. A) Multinational corporation B) Protectionism C) Globalization D) Assimilation E) World recession

C) Globalization

What level of bargaining power do consumers have when the products being purchased are standard or undifferentiated? A) Marginal B) Low C) High D) Negative E) Negligible

C) High

All of the following statements are true EXCEPT A) ISO is the world's largest developer of sustainability standards. B) ISO standards are widely accepted all over the world. C) ISO has legal authority to enforce its regulations' implementation. D) ISO standards are voluntary. E) ISO itself does not regulate or legislate.

C) ISO has legal authority to enforce its regulations' implementation.

________ is NOT a basic mission of a competitive intelligence program. A) Providing a general understanding of an industry B) Providing a general understanding of a company's competitors C) Identifying industry executives who could be hired by the firm D) Identifying areas in which competitors are vulnerable and assessing the impact strategic actions would have on competitors E) Identifying potential moves a competitor might make that would endanger a firm's position in the market

C) Identifying industry executives who could be hired by the firm

________ ties all business functions together and provides the basis for all managerial decisions. A) Management B) Marketing C) Information D) Technology E) Workforce

C) Information

If a firm incurs a loss during a particular year, or if the firm had positive net income but paid out dividends more than the net income, what happens to the RE amount? A) It increases. B) It is unchanged. C) It decreases. D) It doubles. E) It cannot be determined from the information given.

C) It decreases.

Why is market segmentation an important variable in the strategy-implementation process? A) Company strategies do not require increased sales through new markets and products. B) It allows a firm to operate with no resources. C) It directly affects marketing mix variables. D) It allows a firm to minimize per-unit profits and per-segment sales. E) All of the above

C) It directly affects marketing mix variables.

Which of the following is a limitation associated with a SWOT Matrix? A) Viewing every business as a Star, Cash Cow, Dog, or Question Mark is an oversimplification. B) Many businesses fall right in the middle of the matrix. C) It is a static assessment in time. D) Other variables besides relative market share position and industry growth rate in sales need to be considered. E) The matrix does not reflect whether or not various divisions or their industry are growing over time.

C) It is a static assessment in time.

Which of these is true about strategy implementation? A) It is positioning forces before the action. B) It focuses on effectiveness. C) It is primarily an operational process. D) It is primarily an intellectual process. E) It requires intuitive skills.

C) It is primarily an operational process.

Which of these is a limitation of QSPM? A) Only a few strategies can be evaluated at once. B) It is prohibitively expensive. C) It requires intuitive judgments and educated assumptions. D) Strategies cannot be examined sequentially. E) It makes it more likely that key factors will be overlooked or weighted inappropriately.

C) It requires intuitive judgments and educated assumptions.

Which statement best describes intuition? A) It alone should be used 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 strategy would be most appropriate when the distinctive competencies of two or more firms complement each other especially well? A) Conglomerate diversification B) Divestiture C) Joint venture D) Retrenchment E) Integration

C) Joint venture

________ organizations require more elaborate and detailed strategy-evaluation systems than ________ ones because it is more difficult to coordinate efforts among different divisions and functional areas. A) Non-profit; for-profit B) For-profit; non-profit C) Large; small D) Small; large E) Foreign; domestic

C) Large; small

Which of the following is the first step in developing an IFE Matrix? A) Determining the organization's structure B) Summing the weighted scores for each variable C) Listing key internal strengths and weaknesses D) Identifying the organization's functions of business E) Assigning a weight to each factor

C) Listing key internal strengths and weaknesses

What is the most complex form of organizational structure? A) Divisional B) SBU C) Matrix D) Functional E) Geographic

C) Matrix

Which management function includes breaking tasks into jobs, combining jobs to form departments, and delegating authority? A) Motivating B) Staffing C) Organizing D) Controlling E) Planning

C) Organizing

In preparing projected statements, to project cost of goods sold and the expense items in the income statement, which of these methods is recommended? A) Determining the net worth method B) What a firm earns method C) Percentage-of-sales method D) Price-earnings ratio method E) Outstanding shares method

C) Percentage-of-sales method

What are guides to decision making called? A) Strategies B) Rules C) Policies D) Objectives E) Goals

C) Policies

Which method of determining a firm's net worth divides the market price of the firm's stock by the annual earnings per share, and multiplies this number by the firm's average net income for the past five years? A) Debt/equity method B) Current ratio method C) Price-earnings ratio method D) Long-term asset method E) Outstanding shares method

C) Price-earnings ratio method

Which of the following variables is NOT directly affected by market segmentation? A) Product B) Place C) Process D) Promotion E) Price

C) Process

What category of ratios includes return on total assets and return on stockholders' equity? A) Leverage B) Activity C) Profitability D) Growth E) Liquidity

C) Profitability

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

A firm uses information technology to reconfigure work, jobs, and processes. As a result, cost, quality, service, and speed are improved. What has the firm engaged in? A) Restructuring B) Benchmarking C) Reengineering D) Rightsizing E) Delayering

C) Reengineering

What action involves reconfiguring or redesigning work, jobs, and processes for the purpose of improving cost, quality, service, and speed? A) Restructuring B) Downsizing C) Reengineering D) Delayering E) Recruiting

C) Reengineering

Who should perform an internal audit? A) A private auditing firm B) The organization's accounting department C) Representative managers and employees from throughout the firm D) A small team of top-level managers E) The chief executive officer

C) Representative managers and employees from throughout the firm

What effect do trends in the dollar's value have on companies in different industries and in different locations? A) Significant and equal B) Marginal and equal C) Significant and unequal D) Insignificant and unequal E) No significant impact

C) Significant and unequal

Which stage of the strategy-formulation framework involves the Quantitative Strategic Planning Matrix? A) Stage 1 B) Stage 2 C) Stage 3 D) Stage 4 E) Stage 5

C) Stage 3

Which organizational structure has the disadvantage of ambiguous roles for senior executives? A) Functional B) Divisional C) Strategic business unit D) Matrix E) Process

C) Strategic business unit

68) What step in the strategic development process involves mobilizing employees and managers to put strategies into action? A) Strategy formulation B) Strategy evaluation C) Strategy implementation D) Strategic advantage E) Competitive advantage

C) Strategy implementation

In projected financial statements, what is used as a plug figure? A) Retained earnings B) Fixed assets C) The cash account D) Long-term liabilities E) Stockholders' equity

C) The cash account

Which of the following is NOT true about objectives? A) They should be communicated throughout the organization. B) They should have an appropriate time dimension. C) They should use terms like "maximize," "minimize," and "as soon as possible." D) They should be measurable. E) They should be consistent.

C) They should use terms like "maximize," "minimize," and "as soon as possible."

Integration strategies are sometimes collectively referred to as which of the following categories of strategies? A) Horizontal integration B) Diversification C) Vertical integration D) Stuck-in-the-middle E) Hierarchical integration

C) Vertical integration

________ was socially responsible in the wake of the earthquake and tsunami that devastated Japan in 2011; it also was able to get supplies to people who needed them following Hurricane Katrina. A) China Railway Group B) GDF Suez C) Walmart D) RWE E) Marquard & Bahls

C) Walmart

What question is asked in conjunction with the philosophy component of a mission statement? A) What are the firm's major products or services? B) Is the firm committed to growth and financial soundness? C) What are the basic beliefs, values, aspirations, and ethical priorities of the firm? D) Is the firm responsive to social, community, and environmental concerns? E) Are employees a valuable asset of the firm?

C) What are the basic beliefs, values, aspirations, and ethical priorities of the firm?

Which basic question should the vision statement answer? A) What is our business? B) How can we improve ourselves? C) What do we want to become? D) Who are our stakeholders? E) How can we increase profitability?

C) What do we want to become?

When the PE firm Clayton, Dubilier & Rice bought David's Bridal from the PE firm Leonard Green & Partner LP this was an example of A) dividend recapitalization. B) a joint venture. C) a secondary buyout. D) a leveraged buyout. E) a merger.

C) a secondary buyout.

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.

Staffing involves all of these activities EXCEPT A) recruiting. B) transferring. C) analyzing customers. D) managing union relations. E) training and developing.

C) analyzing customers.

Most quantitative criteria are geared to ________ objectives rather than ________ objectives. A) top-management; employee B) short-term; annual C) annual; long-term D) environmental; community E) long-term; short-term

C) annual; long-term

Wellness programs A) are too expensive for most companies to afford. B) are desired by employees but don't provide value to the company. C) are becoming more prevalent as companies realize the benefits to the firm. D) attract prospective employees who then fail to take advantage of them. E) are facing legal challenges from the health-care industry.

C) are becoming more prevalent as companies realize the benefits to the firm.

What is NOT one of Michael Porter's five competitive forces? A) New entrants B) Rivalry among existing firms C) Bargaining power of unions D) Bargaining power of suppliers E) Bargaining power of buyers

C) bargaining power of unions

Bankruptcy A) should never be used as a strategy. B) should be used only when one is legally forced to do so. C) can be an effective type of retrenchment strategy. D) should only be used for large firms. E) should only be used for small, private firms.

C) can be an effective type of retrenchment strategy.

Superior strategy formulation and implementation ________ an opponent's superiority in numbers and resources. A) are irrelevant to B) are not enough to surmount C) can overcome D) can lead to E) unite

C) can overcome

If a firm has a bad sustainability record this will A) help a firm in the market. B) improve a firm's standing in the community. C) cause investors to closely scrutinize the firm. D) deflect the scrutiny of a firm by environmentalists. E) release the firm from governmental reporting obligations.

C) cause investors to closely scrutinize the firm.

A systematic and ethical process for gathering and analyzing information about the competition's activities and general trends to further a business' own goals is called A) unethical business practices. B) artificial intelligence. C) competitive intelligence. D) industrial espionage. E) competitive advantage.

C) competitive intelligence.

All of the following are basic duties of management EXCEPT A) staffing. B) planning. C) consolidating. D) organizing. E) motivating.

C) consolidating.

In recent years, the speedy flow of information through technology has A) made it harder for people worldwide to see how others work and live. B) strengthened national boundaries and made countries more self-contained. C) created a borderless world with global competitors, customers, and citizens. D) ensured that the U.S. is unrivaled by other companies in all industries. E) made the real flow of financial activity align with political boundaries between countries.

C) created a borderless world with global competitors, customers, and citizens.

Selling includes all of these marketing activities EXCEPT A) advertising. B) dealer relations. C) customer analysis. D) publicity. E) sales promotion.

C) customer analysis.

Establishing objectives is a A) executive-only activity. B) centralized activity. C) decentralized activity. D) centralized-decentralized activity. E) command-and-control activity.

C) decentralized activity.

The act of strengthening employees' sense of effectiveness by encouraging and rewarding them for participating in decision-making and exercising initiative and imagination is referred to as A) authoritarianism. B) proaction. C) empowerment. D) transformation. E) delegation.

C) empowerment.

A conservative rule of thumb is to establish a business' worth as ________ the firm's current annual profit. A) twice B) three times C) five times D) ten times E) fifteen times

C) five times

All of the following are potential disadvantages to initiating, continuing, or expanding business across national borders EXCEPT A) firms confront different social, cultural, and political forces when doing business internationally, which can make communication in the firm difficult. B) keeping informed about the number and nature of competitors is more difficult when doing business internationally. C) foreign operations can absorb excess capacity, reduce unit costs, and spread economic risks over a wider number of markets. D) dealing with two or more monetary systems can complicate international business operations. E) foreign operations could be seized by nationalistic forces.

C) foreign operations can absorb excess capacity, reduce unit costs, and spread economic risks over a wider number of markets.

To perform an external audit, a company first must A) get an approval from the Securities and Exchange Commission. B) perform an internal audit. C) gather competitive intelligence and information about external trends. D) hire a consultant to develop a comprehensive strategic plan. E) all of the above

C) gather competitive intelligence and information about external trends.

The United States' population is A) getting younger and less white. B) getting younger and more white. C) getting older and less white. D) getting older and more white. E) remaining stable as to age and racial make up.

C) getting older and less white.

The Financial Accounting Standard Board (FASB) Rule 142 deals with A) illegal inflation of financial projections. B) hacking issues in MIS. C) goodwill. D) how firms conduct R&D. E) improving marketing policies.

C) goodwill.

Many economists say the current rash of trade constraints will make it ________ for global economic growth. A) easier B) impossible C) harder D) more likely E) less time-consuming

C) harder

Most economists argue that protectionism ________ the world economy because it ________ trade among countries. A) helps; inhibits B) helps; encourages C) harms; inhibits D) harms; encourages E) doesn't impact; doesn't affect

C) harms; inhibits

Annual objectives are especially important in strategy A) reduction. B) formulation. C) implementation. D) evaluation. E) policy.

C) implementation.

Retrenchment would be an effective strategy when an organization A) has shrunk so quickly that major internal reorganization is needed. B) is one of the stronger competitors in a given industry. C) is plagued by inefficiency, low profitability, poor employee morale and pressure from stockholders to improve performance. D) has decided to capitalize on opportunities, maximize threats, take advantage of strengths and overcome weaknesses. E) does not have a clearly distinctive competence and has failed to meet its objectives and goals consistently over time.

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

Projected financial analysis is an important strategy-implementation technique because A) it is an exact measurement of financial costs in the future. B) it is an exact measurement of future company profits. C) it allows an organization to examine the expected results of various actions and approaches. D) insurance needs can be computed. E) none of the above

C) it allows an organization to examine the expected results of various actions and approaches.

All of the following are guidelines for effective strategic planning EXCEPT A) it should be simple and nonroutine. B) it should be a learning process for all managers and employees. C) it should be a paper process more than a people process. D) it should not disregard qualitative information. E) it should not be a formal system for control.

C) it should be a paper process more than a people process.

The recommended length of an effective mission statement is ________ words. A) approximately 25 B) no more than 100 C) less than 250 D) at least 300 E) more than 500

C) less than 250

The strategic-management process represents a(n) ________, ________, and ________ approach for determining an enterprise's future direction. A) logical; systematic; subjective B) intuitive; disorganized; subjective C) logical; systematic; objective D) intuitive; disorganized; objective E) inconsistent; systematic; subjective

C) logical; systematic; objective

The I/O approach to competitive advantage advocates that external factors are ________ internal factors in a firm achieving competitive advantage. A) less important than B) equally important as C) more important than D) more common than E) less common than

C) more important than

Organizations that conduct business operations across national borders are called A) protectionists. B) national firms. C) multinational corporations. D) domestic companies. E) all of the above.

C) multinational corporations.

Conflict in an organization is A) always bad. B) always good. C) not always bad. D) a sign of bankruptcy. E) completely avoidable.

C) not always bad.

Specific results an organization seeks to achieve in pursuing its basic mission are A) strategies. B) rules. C) objectives. D) policies. E) tenets.

C) objectives.

Strategy-evaluation activities should ideally be performed A) just on a periodic basis. B) only at the onset of a problem. C) on a continuous basis. D) solely upon completion of major projects. E) annually only.

C) on a continuous basis.

The ideal length of a vision statement is A) one page. B) several paragraphs. C) one sentence. D) several sentences. E) as long as is necessary to convey the message.

C) one sentence.

The three all-encompassing internal resource categories used in the resource-based view are physical resources, human resources, and A) financial resources. B) shareholder resources. C) organizational resources. D) non-renewable resources. E) technological resources.

C) organizational resources.

In 2013, ________ of CEO compensation was directly associated with the performance of the firm, rather than salary. A) less than 10 percent B) almost 25 percent C) over 50 percent D) exactly 75 percent E) a full 100 percent

C) over 50 percent

Identifying and evaluating key social, political, economic, technological and competitive trends and events comprise A) developing an effective mission statement. B) conducting an internal audit. C) performing an external audit. D) formulating strategy. E) implementing strategy.

C) performing an external audit.

Freund emphasizes that key external factors should be all of these EXCEPT A) important to achieving long-term and annual objectives. B) measurable. C) relatively few in number. D) applicable to all competing firms. E) hierarchical in the sense that some will pertain to the overall company while others will be more narrowly focused.

C) relatively few in number.

R&D employees and managers perform all of the following tasks EXCEPT A) transferring complex technology. B) altering products to particular tastes and specifications. C) researching resource availability. D) adapting processes to local markets. E) adjusting processes to local raw materials.

C) researching resource availability.

Japan's prescription for dealing with problems associated with an aging society includes A) relying on large-scale immigration. B) providing incentives for its elderly to retire at ages 55 to 60. C) reversing the old-fashioned trend of keeping women at home. D) enacting laws against discrimination based on age. E) phasing in a shift from age 60 to age 55 as the date when a person may begin receiving a pension.

C) reversing the old-fashioned trend of keeping women at home.

Which board of director's duty falls under the category of control and oversight over management? A) select new directors B) pass bylaws and related resolutions C) select the CEO D) maintain good public image E) ensure equitable stockholder representation

C) select the CEO

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

According to Webster's New World Dictionary, ________ 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." A) competitive advantage B) war C) strategy D) formulation E) business

C) strategy

Collecting and evaluating information on competitors is essential for successful A) internal analysis. B) strategy evaluation. C) strategy formulation. D) strategy implementation. E) strategy correction.

C) strategy formulation.

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) input. B) concept formulation. C) strategy. D) SWOT. E) weakness.

C) strategy.

Internal ________ are controllable activities in an organization that are performed especially well. A) opportunities B) incompetencies C) strengths D) objectives E) factors

C) strengths

Mintzberg's notion of "crafting" strategies A) is consistent with the view that strategic management is more a science than an art. B) contends that firms need to assess their environments, do research, evaluate alternatives, analyze, and then choose a course of action. C) suggests that strategic decision making be based primarily on holistic thinking, intuition, creativity, and imagination. D) reject strategies that result from subjective imagination in favor of objective analysis. E) insists on formality.

C) suggests that strategic decision making be based primarily on holistic thinking, intuition, creativity, and imagination.

If you discover during the course of strategy evaluation that major changes have occurred in the firm's internal strategic position, you should A) continue on the present strategic course. B) wait until the next quarter to see if things revert. C) take corrective actions. D) follow the original strategic plan. E) none of the above

C) take corrective actions.

Business or military success is A) generally the happy result of accidental strategies. B) undermined by the element of surprise. C) the product of both attention to changing external and internal conditions and the insightful adaptations to those conditions. D) unrelated to external conditions. E) none of the above.

C) the product of both attention to changing external and internal conditions and the insightful adaptations to those conditions.

A study by Rarick and Vitton found that firms with a formalized mission statement have ________ the average return on shareholders' equity than those firms without a formalized mission statement. A) one-quarter B) half C) twice D) three times E) five times

C) twice

The U.S. Foreign Corrupt Practices Act and a new provision in the Dodd-Frank financial regulation-law allows company employees who bring cases of financial fraud, such as bribery, to the government's attention to receive ________ percent of any sum recovered. A) less than 10 B) exactly 20 C) up to 30 D) about 40 E) at least 50

C) up to 30

Distribution includes A) customer analysis. B) pricing. C) warehousing. D) advertising. E) test marketing.

C) warehousing.

What is the range for a firm's total weighted score in an External Factor Evaluation Matrix? A) 0 to 5 B) 0 to 4 C) 1 to 5 D) 1 to 4 E) 0 to 10

D) 1 to 4

Today McDonald's owns about ________ percent of its restaurants. A) 9 B) 20 C) 50 D) 67 E) 89

D) 67

The world population that lives outside of the USA is growing ________ the U.S. population. A) 30 percent slower than B) 70 percent slower than C) 30 percent faster than D) 70 percent faster than E) at the same rate as

D) 70 percent faster than

The world population is expected to grow to an estimated ________ billion in 2054. A) 6 B) 7 C) 8 D) 9 E) 10

D) 9

According to journalists' findings, what is a serious obstacle for many small business owners? A) A lack of business ethics B) An excess of employees and managerial staff C) A lack of experience in networking D) A lack of strategic-management knowledge E) Having too many suppliers

D) A lack of strategic-management knowledge

Long-term objectives are needed at which level(s) in an organization? A) Corporate B) Divisional C) Functional D) All of the above E) None of the above

D) All of the above

Why do changes in company strategy often require changes in the way an organization is structured? A) Structure dictates how goals and objectives will be established. B) Structure dictates how resources will be allocated. C) Structure should be designed to facilitate the strategic pursuit of a firm. D) All of the above E) None of the above

D) All of the above

Which item is included in net worth? A) Retained earnings B) Common stock C) Additional paid-in-capital D) All of the above are included in net worth. E) None of the above are included in net worth.

D) All of the above are included in net worth.

Whereas ________ businesses embody individualism, achievement, competition, and informality, ________ businesses stress collectivism, continuity, cooperation, and formality. A) Japanese; Mexican B) Mexican; Japanese C) Mexican; American D) American; Mexican E) Japanese; American

D) American; Mexican

Which of the following is NOT a key attribute that serves as one of the evaluative criteria for Fortune's "America's Most Admired Companies"? A) People management B) Innovativeness C) Financial soundness D) Amount of physical resources E) Social responsibility

D) Amount of physical resources

Which of these strategies is effective when the number of suppliers is small and the number of competitors is large? A) Conglomerate diversification B) Forward integration C) Concentric diversification D) Backward integration E) Horizontal diversification

D) Backward integration

The top row of a QSPM consists of alternative strategies derived from all of the following EXCEPT A) Grand Strategy Matrix. B) BCG Matrix. C) SPACE Matrix. D) CPM Matrix E) IE Matrix.

D) CPM Matrix

The Family Farmer Bankruptcy Act of 1986 created which type of bankruptcy? A) Chapter 7 B) Chapter 8 C) Chapter 9 D) Chapter 12 E) Chapter 13

D) Chapter 12

________ plans can be defined as alternative plans that can be put into effect if certain key events do not occur as expected. A) Agile B) Scenario C) Evaluation D) Contingency E) Forecast

D) Contingency

Which approach for managing and resolving conflict involves playing down differences between conflicting parties, while accentuating similarities and common interests? A) Avoidance B) Resistance C) Compliance D) Defusion E) Confrontation

D) Defusion

Liberty Media Corp. selling its Starz television network is an example of which type of strategy? A) Related diversification B) Unrelated diversification C) Retrenchment D) Divestiture E) Liquidation

D) Divestiture

Which of the following statements is FALSE? A) No organization can pursue all the strategies that potentially could benefit the firm. B) Most organizations today recognize that strategic-management concepts and techniques can enhance the effectiveness of decisions. C) A key role of strategists is to facilitate continuous organizational learning and change. D) Effective strategic planning should accept the assumptions underlying the current corporate strategy. E) Even the most technically perfect strategic plan will serve little purpose if it is not implemented.

D) Effective strategic planning should accept the assumptions underlying the current corporate strategy.

The lowest cost source for precision machinery is A) Japan. B) Sri Lanka. C) Malaysia. D) Europe. E) Mexico.

D) Europe.

Who has mandated that every publicly held company in the United States must issue an annual cash-flow statement in addition to the usual financial reports? A) SEC B) Congress C) FCC D) FASB E) OPEC

D) FASB

What pay strategy requires employees or departments to establish performance targets, which, if exceeded, result in bonuses for all members? A) Profit sharing B) Bonus system C) Salary D) Gain sharing E) Hourly wage system

D) Gain sharing

According to the comprehensive strategic-management model, which step needs to be completed immediately following the establishment of long-term objectives? A) Developing vision and mission statements B) Performing external audits C) Performing internal audits D) Generating, evaluating, and selecting strategies E) Measuring and evaluating performance

D) Generating, evaluating, and selecting strategies

What refers to a strategy of seeking ownership of, or increased control over a firm's competitors? A) Forward integration B) Conglomerate diversification C) Backward integration D) Horizontal integration E) Concentric diversification

D) Horizontal integration

According to the Grand Strategy Matrix, organizations in which quadrant have a strong competitive position but are in a slow-growth industry? A) I B) II C) III D) IV E) V

D) IV

Which of the following is NOT a typical characteristic of most Japanese managers? A) Reserved B) Quiet C) Distant D) Impulsive E) Introspective

D) Impulsive

Which element in the projected income statement CANNOT be forecasted using the percentage-of-sales method? A) Cost of goods sold B) Selling expense C) Administrative expense D) Interest expense E) All of these items can be forecasted using the percentage-of-sales method.

D) Interest expense

How does life in Mexico compare to life in the United States? A) It is faster. B) It is more hectic. C) It is more punctuality-driven. D) It is slower. E) It is more competitive.

D) It is slower.

Which of the following is true regarding the design of a firm's strategy-evaluation system? A) There is a one-size-fits-all system that works for all companies. B) It does not need to take into account the organization's size. C) The management style of a firm has no bearing on the design. D) It should be determined based on the unique characteristics of a company. E) There is one ideal system.

D) It should be determined based on the unique characteristics of a company.

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

D) List the firm's external weaknesses.

Which of the following is NOT true regarding European workers and workplaces? A) Most European workers are unionized. B) Most European workers enjoy more frequent vacations and holidays than U.S. workers. C) Guaranteed permanent employment is typically a part of employment contracts in Europe. D) Many Europeans respond enthusiastically to pay-for-performance, commission salaries, and objective measurement reward systems. E) Many Europeans find the notion of team spirit difficult to grasp.

D) Many Europeans respond enthusiastically to pay-for-performance, commission salaries, and objective measurement reward systems.

IKEA Group investing $1.9 billion in India to open 25 new stores between 2013 and 2018 is an example of which type of strategy? A) Forward integration B) Backward integration C) Horizontal integration D) Market development E) Product development

D) Market development

Which of the following statements is NOT true? A) America's economy is becoming much less American. B) A world economy and monetary system are emerging. C) Corporations in every corner of the globe are taking advantage of the opportunity to obtain customers globally. D) Markets are shifting slowly and in many cases diverging in tastes, trends, and prices. E) Innovative transport systems are accelerating the transfer of technology.

D) Markets are shifting slowly and in many cases diverging in tastes, trends, and prices.

Hawaii, California, and ________ already have no majority race or ethnic group. A) New York B) New Jersey C) New Hampshire D) New Mexico E) all of the above

D) New Mexico

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

D) Offensive

What marketing function includes test marketing? A) Selling products and services B) Pricing C) Customer analysis D) Product and service planning E) Distribution

D) Product and service planning

Which strategy generally entails large research and development expenditures? A) Market penetration B) Retrenchment C) Forward integration D) Product development E) Divestiture

D) Product development

________ management deals with inputs, transformations, and outputs that vary across industries and markets. A) Marketing B) Financial C) Research and development D) Production and operations E) Information systems

D) Production and operations

What is a central strategy-implementation technique that allows an organization to examine the expected results of various actions and approaches? A) EPS/EBIT B) Financial budgeting C) TOWS analysis D) Projected financial statement analysis E) External analysis

D) Projected financial statement analysis

Which best expresses former Colgate CEO Reuben Mark's thoughts on vision? A) It's becoming less important that a clear mission make sense internationally. B) It's essential to drive home different messages in different cultures. C) Keeping the vision simple will never rally everyone to the corporate banner. D) Pushing one vision globally is essential. E) Elevated missions or visions will alienate international markets.

D) Pushing one vision globally is essential.

Which term is best defined as a central management activity that allows for strategy execution? A) Avoidance B) Furlough C) Competition D) Resource allocation E) Conflict

D) Resource allocation

In which of the following industries is the USA NOT yet greatly challenged by foreign competitors? A) Auto industry B) Electronics C) Manufacturing D) Retailing E) None of the above

D) Retailing

In the BCG Matrix, which strategy would be most appropriate for a division classified as a Dog? A) Market penetration B) Market development C) Product development D) Retrenchment E) Forward integration

D) Retrenchment

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

D) Rivalry among competing firms

Which strategies use a firm's strengths to avoid or reduce the impact of external threats? A) SO B) WO C) SW D) ST E) WT

D) ST

Which variable would be considered part of the "place" element of the marketing mix? A) Product line B) Service level C) Personal selling D) Sales territory E) Discounts and allowances

D) Sales territory

Which of the following is NOT a reason joint ventures fail? A) Managers who must collaborate daily in operating the venture are not involved in forming or shaping the venture. B) The venture may not be supported equally by both partners. C) The venture may benefit the partnering companies but may not benefit the customers who then complain about poorer service or criticize the companies in other ways. D) Stakeholders from both partners are equally satisfied. E) The venture may begin to compete more with one of the partners than the other.

D) Stakeholders from both partners are equally satisfied.

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? A) Strategy formulation B) Strategy evaluation C) Strategy implementation D) Strategic management E) Strategic leading

D) Strategic management

Which of the following statements about contingency plans is NOT true? A) Contingency plans should be as simple as possible. B) Only high-priority areas require the insurance of contingency plans. C) Contingency plans should be developed for favorable and unfavorable events. D) Strategists should plan for all possible contingencies. E) Contingency plans minimize the impact of potential threats.

D) Strategists should plan for all possible contingencies.

________ are the individuals primarily responsible for ensuring that high ethical principles are espoused and practiced in an organization. A) Non-management employees B) Mid-level managers C) Shareholders D) Strategists such as CEOs and business owners E) Governmental regulatory bodies

D) Strategists such as CEOs and business owners

Matching which factors would allow factories to produce desirable levels without extra shifts, overtime, or subcontracting? A) Markets and competitors B) Competition and positioning C) Customer behavior and positioning D) Supply and demand E) Segments and competitors

D) Supply and demand

What happens when interest rates rise? A) Discretionary income increases. B) The demand for discretionary goods increases. C) Discretionary income is unchanged. D) The demand for discretionary goods decreases. E) Discretionary income increases and the demand for discretionary goods decreases.

D) The demand for discretionary goods decreases.

Which statement is TRUE? A) Companies must choose between having a mission statement or a vision statement. B) A company can't have a mission statement unless it has a vision statement. C) A vision statement cannot be established until a company has developed its mission statement. D) The vision statement should be established before the mission statement. E) Companies are required by law to have both mission and vision statements.

D) The vision statement should be established before the mission statement.

In general, what happens to American goods in overseas markets when there is a strong dollar? A) They are less expensive. B) They are more attractive. C) They are cheaper. D) They are more expensive. E) They are desirable.

D) They are more expensive.

Which of these basic questions should a vision statement answer? A) What is our business? B) Who are our employees? C) What are our challenges? D) What do we want to become? E) Who are our competitors?

D) What do we want to become?

The potential for creative growth in an organization can be limited by A) an overemphasis on stakeholders. B) not enough emphasis on stakeholders. C) a mission statement that is too general. D) a mission statement that is too specific. E) a mission statement that is too dynamic.

D) a mission statement that is too specific.

A particularly important twenty-first-century challenge facing all strategists today is A) deciding whether the process should be more an art or a science. B) deciding whether strategies should be visible or hidden from stakeholders. C) deciding whether the process should be more top-down or bottom-up in their firm. D) all of the above E) none of the above

D) all of the above

An organization's vision statement A) is a constant reminder to its employees of why the organization exists. B) broadly charts the future direction of an organization. C) addresses the basic question: "What is our business?" D) answers the question: "What do we want to become?" E) none of the above

D) answers the question: "What do we want to become?"

All of the following are principles of good organizational governance, as established by Businessweek, EXCEPT A) each director attends at least 75 percent of all meetings. B) the audit, compensation and nominating committees are made up solely of outside directors. C) each director owns a large equity stake in the company. D) at least three directors are current or former company executives. E) the CEO is not also the Chairperson of the Board.

D) at least three directors are current or former company executives.

Responsibility for encouraging ethical decision making and ensuring ethical behavior in a firm lies with A) only a firm's strategists. B) only a firm's managers. C) only a firm's shareholders. D) both a firm's strategists and its managers. E) neither a firm's strategists nor its managers.

D) both a firm's strategists and its managers.

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

D) competitive position and financial position.

The responsibilities of a director of competitive analysis include all of the following EXCEPT A) researching special issues. B) disseminating information on a timely basis. C) recognizing what information is important and who needs to know. D) conducting corporate espionage. E) analyzing data.

D) conducting corporate espionage.

More and more firms believe that ethics training and an ethics culture A) are socially irresponsible. B) are admirable but damage a firm's competitive positioning. C) are costly and provide no practical benefit to the company. D) create strategic advantage. E) can tarnish the reputation of a firm.

D) create strategic advantage.

All of these are Richard Rumelt's criteria to evaluate a strategy EXCEPT A) advantage. B) consistency. C) feasibility. D) distinctiveness. E) consonance.

D) distinctiveness.

The controversial practice of a company borrowing money simply to fund dividend payouts to itself is known as A) a leveraged buyout. B) retrenchment. C) first mover advantage. D) dividend recapitalization. E) dividend divestiture.

D) dividend recapitalization.

A business' mission is the foundation for all of the following EXCEPT A) priorities. B) strategies. C) plans. D) employee wage rates. E) work assignments.

D) employee wage rates.

The first step in the controlling function of management is to A) take corrective actions. B) restrict the number of breaks employees take. C) evaluate expense reports. D) establish performance standards. E) measure individual and organizational performance.

D) establish performance standards.

Foreign revenue as a percentage of total company revenues ________ in hundreds of U.S. firms, including ExxonMobil, Gillette, and Citicorp. A) is almost 10 percent B) approaches 20 percent C) is 25 percent D) exceeds 50 percent E) is at least 70 percent

D) exceeds 50 percent

Joint ventures and partnerships between domestic and foreign firms are A) falling out of favor. B) increasingly difficult to engineer. C) the exception rather than the rule. D) extremely commonplace. E) subject to too many regulations to be feasible.

D) extremely commonplace.

Quantitative criteria commonly used to evaluate strategies are A) cash budgets. B) Balanced Scorecards. C) Capital Asset Pricing Models. D) financial ratios. E) present value analyses.

D) financial ratios.

In mass retailing, big-box companies like Walmart, Best Buy, and Sears are A) gaining competitive advantage over smaller stores. B) participating in a dramatic shift to becoming bigger. C) increasing the square-footage of their retail locations. D) finding that less brick and mortar is better. E) noticing a sharp decline in online purchases.

D) finding that less brick and mortar is better.

All of the following are potential advantages to initiating, continuing, and/or expanding international operations EXCEPT A) firms can gain new customers for their products. B) foreign operations can absorb excess capacity, reduce unit costs, and spread economic risks over a wider number of markets. C) foreign operations can allow firms to establish low-cost production facilities in locations close to raw materials and/or cheap labor. D) foreign operations could be seized by nationalistic factions. E) foreign operations may result in reduced tariffs, lower taxes, and favorable political treatment.

D) foreign operations could be seized by nationalistic factions.

The strategy-evaluation process should A) dominate decisions. B) be complex. C) be cumbersome. D) foster mutual understanding and trust. E) be restrictive.

D) foster mutual understanding and trust.

All of the following are examples of offerings at companies to promote a corporate wellness culture EXCEPT A) stress management programs. B) health fairs. C) abundance of bicycle racks onsite. D) free health insurance for employees who exercise regularly. E) cash incentives for completing Ironman triathlons.

D) free health insurance for employees who exercise regularly.

When developing an organizational chart, you should A) recommend dual titles for executives. B) use the title "president" for the top executive of the firm. C) make sure that the chief financial officer is not at the same level as the chief operating officer. D) have division presidents report to a chief operating officer. E) have employees report to more than one person in the chain of command.

D) have division presidents report to a chief operating officer.

All of the following are reasons that workplace romance can be detrimental to workplace morale and productivity EXCEPT A) favoritism complaints can arise. B) personal arguments can lead to work arguments. C) whispering secrets can lead to tensions and hostilities among coworkers. D) increased quality and quantity of work can occur. E) sexual harassment charges may ensue, either by the involved female or a third party.

D) increased quality and quantity of work can occur.

According to Greenley, strategic management offers all of the following benefits EXCEPT A) increased discipline. B) enhanced communication. C) increased synergy. D) increased resistance to change. E) more effective allocation of time and resources.

D) increased resistance to change.

Each of the nine techniques included in the strategy formulation framework rely on the use of A) strictly factual data. B) luck. C) financial formulas and statistics. D) intuition and analysis. E) synergy.

D) intuition and analysis.

The domestic food industry ________, so Kraft Foods is focusing on foreign acquisitions. A) is falling 5% per year B) is falling 1% per year C) is stagnant D) is growing 3% per year E) is growing 7% per year

D) is growing 3% per year

Simply having a code of ethics A) will ensure ethical business behavior. B) eliminates the need for periodic ethics workshops. C) is all that is necessary to sensitize people to workplace circumstances in which ethics issues may arise. D) is insufficient to guarantee that employees behave in an ethical manner. E) secures an ethics culture in the workplace.

D) is insufficient to guarantee that employees behave in an ethical manner.

An effective mission statement does all of the following EXCEPT A) it reflects judgments about future growth directions that are based upon forward-looking external and internal analyses. B) it provides useful criteria for selecting among alternative strategies. C) it provides a basis for generating and screening strategic options. D) it is static in orientation. E) it should be enduring.

D) it is static in orientation.

Selling all of a company's assets, in parts, for their tangible worth is called A) joint venture. B) divestiture. C) concentric diversification. D) liquidation. E) unrelated integration.

D) liquidation

Subdividing a market into distinct subsets of customers according to their needs and buying habits is known as A) market penetration. B) product diversification. C) market segregation. D) market segmentation. E) positioning.

D) market segmentation.

Increased education and diversity of the workforce at all levels are reasons why A) the top-down approach is preferred. B) the bottom-up approach is untenable. C) only top executives have the experience and acumen to make strategy decisions. D) middle- and lower-level managers, and even nonmanagers, should be involved in the strategic planning process. E) the horizontal approach is the most pragmatic choice.

D) middle- and lower-level managers, and even nonmanagers, should be involved in the strategic planning process.

As indicated in the strategic-management model, a clear ________ is needed before long-term objectives can be established. A) short-term objective B) implementation plan C) audit policy D) mission statement E) evaluation strategy

D) mission statement

Firms can align ethical and strategic decision making by A) omitting ethical considerations from long-term planning. B) excluding ethical decision making from the performance appraisal process. C) discouraging whistle-blowing. D) monitoring departmental and corporate performance regarding ethical issues. E) All of the above

D) monitoring departmental and corporate performance regarding ethical issues.

Annually, ________ businesses in the U.S. fail. A) exactly 100 B) less than 1,000 C) about 10,000 D) more than 100,000 E) almost 10 million

D) more than 100,000

In Europe it is generally true that the farther ________ on the continent, the more participatory the management style. A) south B) east C) west D) north E) southeast

D) north

Empirical indicators of resources are: being rare, hard to imitate, or A) expensive. B) inexpensive. C) easily substitutable. D) not easily substitutable. E) inefficient.

D) not easily substitutable.

There is a dramatic shift in mass retailing to A) "trading up" and taking customers from more exclusive stores. B) selling only the most expensive merchandise. C) opening dramatically larger supercenters. D) operating stores with less square footage. E) cutting back on their online presence.

D) operating stores with less square footage.

In most industries, the major costs of producing a product or service are incurred within A) marketing. B) management. C) research and development. D) operations. E) management information systems.

D) operations.

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 A) dysfunctional behavior. B) groupthink. C) behavior modification. D) organizational culture. E) internal audit effect.

D) organizational culture.

Environmental advocacy groups now have ________ Americans as members. A) approximately 100,000 B) just under a million C) close to 5 million D) over 20 million E) almost a billion

D) over 20 million

Multidimensional scaling is used to determine A) the size of a new building. B) the size of a new department. C) the amount of high-tech equipment a firm needs. D) perceptual mapping. E) market segmentation.

D) perceptual mapping.

The first step in performing projected financial analysis is to A) prepare the projected balance sheet. B) take an inventory of goods. C) estimate increases in debt. D) prepare the projected income statement. E) calculate the projected net income.

D) prepare the projected income statement.

Organizations should take a(n) ________ approach in their industry. A) adversarial rather than a collegial B) collegial rather than an adversarial C) reactive rather than a proactive D) proactive rather than a reactive E) cooperative rather than a competitive

D) proactive rather than a reactive

A change strategy that attempts to convince people that the change is to their personal advantage is A) defusion. B) force. C) educative. D) rational. E) compromise.

D) rational.

In order to appeal to its diverse stakeholders, an effective mission statement should be A) inflammatory. B) provocative. C) contentious. D) reconciliatory. E) dysfunctional.

D) reconciliatory.

All of the following are ways and means for altering an organization's culture EXCEPT A) recruitment. B) restructuring of an organization's design. C) role modeling. D) retrenchment. E) mentoring.

D) retrenchment.

Revlon closing its manufacturing plant in France and laying off 5 percent of its workforce is an example of A) divestiture. B) backward integration. C) liquidation. D) retrenchment. E) forward integration.

D) retrenchment.

A standardized set of behaviors used to manage anxieties is called a A) folktale. B) rite. C) metaphor. D) ritual. E) value.

D) ritual.

Workplace romance A) is defined as unwelcome sexual advances, requests for sexual favors, and other verbal or physical conduct of a sexual nature. B) is defined as illegal by the Equal Employment Opportunity Commission. C) should be strictly forbidden by organizations. D) simply happens so organizations should determine how to best manage the phenomena. E) is an intimate relationship between two employees, one of whom is not consenting.

D) simply happens so organizations should determine how to best manage the phenomena.

Japan is suffering from a decline in overall economic production A) due to its growing population. B) related to the declining age of its workforce. C) because of a surge in the number of its taxpaying workers. D) since worker productivity increases are not able to offset declines in number of workers. E) because more and more women are working outside the home.

D) since worker productivity increases are not able to offset declines in number of workers.

Special natural environment issues include all of the following EXCEPT A) ozone depletion. B) destruction of animal habitats. C) pollution control. D) spreading computer viruses. E) developing biodegradable products and packages.

D) spreading computer viruses.

The United Kingdom's new Bribery Law A) is less stringent than the similar U.S. FCPA. B) carries a minimum 10-year prison sentence for those convicted of bribery. C) allows foreign companies doing business in the UK to bribe officials if that is their national convention. D) stipulates that failure to prevent bribery is an offense. E) All of the above

D) stipulates that failure to prevent bribery is an offense.

Any object, act, event, quality, or relation used to convey meaning is known as a A) myth. B) rite. C) value. D) symbol. E) metaphor.

D) symbol.

All of the following are reasons strategy evaluation is more difficult today EXCEPT A) a dramatic increase in the environment's complexity. B) the increasing number of variables. C) the increase in the number of both domestic and world events affecting organizations. D) the increasing time span for which planning can be done with any degree of certainty. E) the rapid rate of obsolescence of even the best plans.

D) the increasing time span for which planning can be done with any degree of certainty.

Glass ceiling refers to A) the reality that most companies do not offer paternity leave for fathers as a benefit. B) the understanding that a good home life for employees contributes to a good work life and value for the firm. C) the focus on flexible scheduling, job sharing, and other quality of life benefits. D) the invisible barrier in many firms that bars women and minorities from top-level management positions. E) the decline in the percentage of women with college degrees between 1970 and today.

D) the invisible barrier in many firms that bars women and minorities from top-level management positions.

Strengths of competitors in foreign lands are often ________, and weaknesses are often ________. A) overestimated; overestimated B) overestimated; underestimated C) underestimated; underestimated D) underestimated; overestimated E) none of the above

D) underestimated; overestimated

Many more firms have failed at ________ than have succeeded due to the immense challenge of managing businesses in many industries rather than in a single industry. A) forward integration B) related diversification C) backward integration D) unrelated diversification E) horizontal integration

D) unrelated diversification

FedEx entering the computer repair business offering major corporations overnight computer repair is an example of A) backward integration. B) divestiture. C) retrenchment. D) unrelated diversification. E) forward integration.

D) unrelated diversification.

Backward integration is effective in all of these cases EXCEPT A) when an organization competes in an industry that is growing rapidly. B) when an organization has both capital and human resources to manage the new business of supplying its own raw materials. C) when an organization needs to acquire a needed resource quickly. D) when the advantages of stable prices are not important. E) when present suppliers have high profit margins.

D) when the advantages of stable prices are not important.

Changes in which of the following can significantly affect firms? A) Patent laws B) Antitrust legislation C) Tax rates D) Lobbying activities E) All of the above

E) All of the above

Effective mission statements can vary in A) length. B) content. C) format. D) specificity. E) All of the above

E) All of the above

Ethics training programs should contain which of the following? A) Messages from the CEO or business owner emphasizing ethical business practices B) The development and discussion of codes of ethics C) Procedures for discussing unethical behavior D) Procedures for reporting unethical behavior E) All of the above

E) All of the above

Managers and employees today must be careful not to ignore, conceal, or disregard a pollution problem or they could A) be fired. B) be demoted. C) be held indirectly responsible for their firm's pollution. D) have their firm turn on them in a quest for leniency. E) All of the above

E) All of the above

Sustainability refers to the extent that an organization's operations and actions ________ the natural environment. A) protect B) mend C) preserve D) reflect good stewardship of E) All of the above

E) All of the above

The Wall Street Journal article "America Gone Wild" A) reports an astonishing resurgence in wildlife populations in the USA. B) cites that deer-vehicle crashes in the USA cost $1.5 billion a year. C) describes damage done to U.S. infrastructure by the resurgence in wildlife. D) reveals that the total annual cost of wildlife damage in the USA exceeds $28 billion. E) All of the above

E) All of the above

What corrective actions might a firm take during strategy evaluation? A) Revise the business mission B) Issue stock C) Revise objectives D) Sell a division E) All of the above

E) All of the above

What is a limitation of using financial budgets? A) They can be so detailed that they are cumbersome and expensive. B) They can become a substitute for objectives. C) They can hide inefficiencies if done only on precedent. D) They are sometimes used as instruments of tyranny. E) All of the above

E) All of the above

What level of management is directly affected by strategy implementation? A) Plant managers B) Sales managers C) Project managers D) Division managers E) All of the above

E) All of the above

When developing a mission statement, what is needed before people can focus on specific strategy formulation activities? A) Negotiation B) Compromise C) Eventual agreement D) A and B only E) All of the above

E) All of the above

Which group would be classified as stakeholders? A) Governments B) Creditors C) Suppliers D) Employees E) All of the above

E) All of the above

Which of the following is a corrective action a company might take to correct unfavorable variances? A) Divesting a division B) Revising objectives C) Raising capital with stock or debt D) Allocating resources differently E) All of the above

E) All of the above

Which of the following is a management issue central to strategy implementation? A) Devising policies B) Revising reward and incentive plans C) Minimizing resistance to change D) Developing an effective human resources function E) All of the above

E) All of the above

Which of the following is part of the strategic management model? A) Measure and evaluate performance B) Develop mission and vision statements C) Establish long-term objectives D) Implement strategies E) All of the above

E) All of the above

Which of these is a basic activity of strategy evaluation? A) Reviewing the underlying bases of current strategies B) Comparing expected results with actual results C) Taking corrective actions D) Choices B and C only E) All of the above

E) All of the above

Which question(s) are answered in an effective mission statement? A) Is the firm committed to growth and financial soundness? B) Are employees a valuable asset of the firm? C) Geographically, where does the firm compete? D) Who are the firm's customers? E) All of the above

E) All of the above

Why is market segmentation an important variable in strategy implementation? A) It allows a small firm to compete successfully with a large firm. B) It allows a firm to operate with limited resources. C) Mass production, mass distribution, and mass advertising are not always required. D) Market segmentation decisions directly affect marketing mix variables. E) All of the above

E) All of the above

________ is a commonly used approach to determine R&D budget allocations. A) Financing as many project proposals as possible B) Using a percentage-of-sales method C) Budgeting for R&D about what competitors spend D) Deciding how many successful new products are needed E) All of the above

E) All of the above

What can be used to promote unbiased views and to manage the development of the mission statement more effectively? A) An internal group B) A committee of managers C) Command-and-control D) Surveys E) An outside facilitator

E) An outside facilitator

Which of these involves comparing a firm against the best firms in the industry on a wide variety of performance-related criteria? A) Restructuring B) Process redesign C) Reengineering D) Delayering E) Benchmarking

E) Benchmarking

Which statement about business intelligence is accurate? A) Intelligence gathering is an unethical business practice. B) Running an intelligence program requires many people. C) Running an intelligence program requires many computers and other resources. D) Collecting intelligence about competitors violates antitrust laws. E) Business intelligence is not equal to espionage.

E) Business intelligence is not equal to espionage.

What is NOT one of the basic ways a divisional structure can be organized? A) By geographic area B) By product C) By customer D) By process E) By cost

E) By cost

________, perhaps the most important word in management, is a major component in motivation. A) Forecasting B) Organizational structure C) Recruiting D) Management development E) Communication

E) Communication

Which approach for managing and resolving conflict involves exchanging members of conflicting parties so that each can gain an appreciation of the other's point of view? A) Avoidance B) Resistance C) Compliance D) Defusion E) Confrontation

E) Confrontation

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

E) Controlling

Which of the following is NOT a way that companies can help create an ethical culture in their organization? A) Outlining ethical expectations B) Giving examples of ethical situations that commonly occur in their businesses C) Providing code-of-conduct manuals D) Creating interactive exercises that pose hypothetical ethical dilemmas E) Discouraging whistle-blowing

E) Discouraging whistle-blowing

Which is a rule from the Wall Street Journal article "The New Rules of Flirting"? A) Do not flirt within a relationship that you want to strengthen. B) Do flirt with someone you know is looking for a relationship if you are not interested in a new relationship. C) Do flirt to make your partner jealous. D) Flirting between power differences, such as boss and employee, is usually fine. E) Do not make physical contact with the person you are flirting with, unless it is within a desired relationship.

E) Do not make physical contact with the person you are flirting with, unless it is within a desired relationship.

Which of the following is NOT a key question that can reveal internal strengths and weaknesses of the marketing department? A) Does the firm have an effective sales organization? B) Is our product quality good? C) Are markets segmented effectively? D) Are the firm's products and services priced appropriately? E) Does the firm have good liquidity?

E) Does the firm have good liquidity?

Which of these is NOT one of the tests used to determine whether a performance-pay plan will benefit an organization? A) Does the plan capture attention? B) Do employees understand the plan? C) Is the plan improving communications? D) Does the plan pay out when it should? E) Does the plan reduce management layers?

E) Does the plan reduce management layers?

Which of the following U.S. industries is NOT yet greatly challenged by foreign competitors? A) Aircraft manufacturing B) Auto manufacturing C) Heavy equipment manufacturing D) Tire manufacturing E) Furniture manufacturing

E) Furniture manufacturing

What category of ratios measures how effectively a firm can maintain its economic position in the growth of the economy and industry? A) Profitability B) Liquidity C) Leverage D) Activity E) Growth

E) Growth

Which of the following analytical tools consists of a nine-cell matrix? A) BCG Matrix B) Competitive Profile Matrix C) SPACE Matrix D) Grand Strategy Matrix E) Internal-External Matrix

E) Internal-External Matrix

What is NOT a guideline given for effective strategic planning? A) Continually strengthen the "good ethics is good business" policy. B) It should not include jargon or arcane planning language. C) It should not be too formal, predictable, or rigid. D) It should welcome bad news. E) It should be controlled by "technicians."

E) It should be controlled by "technicians."

________ recently cut its corporate tax rate by five percentage points, leaving ________ with the highest corporate tax rate among all the nations in the world. A) The USA; Brazil B) Brazil; Japan C) Japan; Brazil D) Brazil; the USA E) Japan; the USA

E) Japan; the USA

Which strategy would be effective when the stockholders of a firm can minimize their losses by selling the organization's assets? A) Integration B) Differentiation C) Diversification D) Cost leadership E) Liquidation

E) Liquidation

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

What principle is built on the idea that there is no general plan for which way to go and what to do? A) Managing by crisis B) Managing by extrapolation C) Managing by objectives D) Managing by hope E) Managing by subjectives

E) Managing by subjectives

Which two variables rank as marketing's most important contributions to strategic management? A) Diversification and budgeting. B) Marketing penetration and competition. C) Competition and collaboration. D) Product development and market development. E) Market segmentation and product positioning.

E) Market segmentation and product positioning.

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

E) Matching

Which of the following business actions is considered to be unethical? A) Having satisfactory product or service safety B) Selling products in foreign markets C) Providing equal opportunities for women and minorities D) Filing expense accounts E) Misleading labeling

E) Misleading labeling

Preserving the environment should be a permanent part of doing business for which of the following reasons? A) Consumer demand for environmentally safe products and packages is low. B) Public opinion demanding that firms conduct business in ways that preserve the natural environment is weak. C) Federal and state environmental regulations are fairly simple and static. D) Many consumers, suppliers, distributors, and investors shun doing business with environmentally strong firms. E) More lenders are examining the environmental liabilities of businesses seeking loans.

E) More lenders are examining the environmental liabilities of businesses seeking loans.

How many cells are in a SWOT Matrix? A) Two B) Four C) Six D) Eight E) Nine

E) Nine

Which U.S. industry is already greatly challenged by foreign competitors? A) Printing B) Retailing C) Retail banking D) Consumer packaged goods E) None of the above

E) None of the above

All of the following are reasons to be completely open as opposed to secretive with the strategy process EXCEPT A) Managers, employees and other stakeholders can readily contribute to the process. B) Stakeholders have greater basis for understanding and committing to a firm that is open. C) All levels of today's workforce exhibit increased education and diversity, making such contributions valuable. D) Participation and openness enhance understanding, commitment and communication within the firm. E) Openness limits rival firms from imitating or duplicating the firm's strategies.

E) Openness limits rival firms from imitating or duplicating the firm's strategies.

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? A) BCG Matrix B) SPACE Matrix C) SWOT Matrix D) IE Matrix E) QSPM

E) QSPM

Which term is primarily concerned with shareholder well-being rather than employee well-being? A) Benchmarking B) Reengineering C) Product redesign D) Process management E) Restructuring

E) Restructuring

Which component of a mission statement addresses the firm's distinctive competence or major competitive advantage? A) Technology B) Philosophy C) Concern for public image D) Customers E) Self-concept

E) Self-concept

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

E) Star

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

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 ratio is calculated by dividing profits before interest and taxes by total interest charges? A) Inventory turnover B) Fixed assets turnover C) Total assets turnover D) Debt-to-equity ratio E) Times-interest-earned ratio

E) Times-interest-earned ratio

Which of the following is NOT given as an example of a decision that may require finance/accounting policies? A) To extend the time of accounts receivable B) To establish a certain percentage discount on accounts within a specified period of time C) To lease or buy fixed assets D) To use LIFO, FIFO, or a market-value accounting approach E) To be a price leader or a price follower

E) To be a price leader or a price follower

Which of the following is NOT a reason given for poor or no strategic planning in an organization? A) Planning is viewed as a waste of time B) Content with current success C) Too busy "firefighting" to plan ahead D) No monetary rewards for planning E) Trust of management makes it unnecessary

E) Trust of management makes it unnecessary

In 2012, how many Fortune 500 have women CEOs? A) Two B) Five C) Twelve D) Eighteen E) Twenty-two

E) Twenty-two

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

Already the European Union and 113 nations including Australia, Mexico, and Canada have ________ IFRS rules. A) adopted and then abandoned the use of B) been prohibited from adopting C) spoken out publicly against the adoption of D) revised the standard version of the E) adopted or soon plan to use

E) adopted or soon plan to use

A divisional structure by product is most effective when A) special emphasis needs to be placed on specific products. B) an organization offers few products. C) an organization's products or services differ substantially. D) special emphasis needs to be placed on specific services. E) all of the above

E) all of the above

An effective information management system ________ information in such a way that it answers important operating and strategic questions. A) collects B) codes C) stores D) synthesizes E) all of the above

E) all of the above

Considerable time and effort should be devoted to assuring objectives are well conceived because they represent the basis for A) monitoring progress toward long-term objectives. B) establishing divisional priorities. C) allocating resources. D) evaluating managers. E) all of the above

E) all of the above

Information collection, retrieval, and storage can be used to create competitive advantages in ways such as A) cross-selling to customers. B) monitoring suppliers. C) keeping managers and employees informed. D) coordinating activities among divisions. E) all of the above

E) all of the above

Modern organizational realities demand that employees demonstrate greater A) flexibility. B) innovation. C) creativity. D) initiative. E) all of the above

E) all of the above

Policies A) let both employees and managers know what is expected of them. B) provide a basis for management control. C) allow coordination across organizational units. D) reduce the amount of time managers spend making decisions. E) all of the above

E) all of the above

Resistance to change can manifest itself through A) absenteeism. B) sabotaging production machines. C) filing unfounded grievances. D) unwillingness to cooperate. E) all of the above

E) all of the above

Strategic management focuses on integrating management, ________, and information systems to achieve organizational success. A) marketing B) finance and accounting C) production and operations D) research and development E) all of the above

E) all of the above

Synergy A) is the 2 + 2 = 5 effect. B) can result in powerful competitive advantages. C) can be developed by an organization through planning. D) exists when everyone pulls together as a team that knows what it wants to achieve. E) all of the above

E) all of the above

The ________ opportunities and threats that face a multinational corporation are almost limitless. A) social B) cultural C) environmental D) political E) all of the above

E) all of the above

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

E) all of the above

According to researchers, all of the following encourage individuals to accept change EXCEPT A) having a cognitive understanding of the changes. B) having a sense of control over the situation. C) having an awareness that necessary actions are going to be taken to implement change. D) participating in strategy-evaluation activities. E) being overpowered by the nature, types, and speed of changes.

E) being overpowered by the nature, types, and speed of changes.

The initial step to implementing value chain analysis is A) attaching a cost to each discrete activity. B) establishing costs in terms of time. C) establishing costs in terms of money. D) converting the cost data into information by looking for competitive cost strengths and weaknesses. E) dividing a firm's operations into specific activities or business processes.

E) dividing a firm's operations into specific activities or business processes.

The act of oversight and direction for an organization is referred to as A) corporate lawmaking. B) centralized control. C) organizational direction. D) establishing norms. E) governance.

E) governance.

If success for one organizational department means failure for another department, then strategies may be A) synergistic. B) advantageous. C) trendy. D) feasible. E) inconsistent.

E) inconsistent.

Mergers and acquisitions are created for all of the following reasons EXCEPT to A) gain new technology. B) reduce tax obligations. C) gain economies of scale. D) smooth out seasonal trends in sales. E) increase the number of employees.

E) increase the number of employees.

Protectionism involves countries doing all of the following EXCEPT A) levying tariffs against firms outside the country. B) imposing taxes on firms outside the country. C) imposing regulations on firms outside the country. D) restricting imports from firms outside the country. E) liberalizing restrictions on the import of foreign goods.

E) liberalizing restrictions on the import of foreign goods.

When a domestic company first begins to export to India, it is an example of A) horizontal integration. B) backward integration. C) forward integration. D) concentric diversification. E) market development.

E) market development.

All of the following are cooperative arrangements EXCEPT A) R&D partnerships. B) joint-bidding consortia. C) cross-licensing agreements. D) cross-manufacturing agreements. E) marketing plans.

E) marketing plans.

All of the following are political, governmental, and legal variables that can represent key opportunities or threats to organizations EXCEPT A) special tariffs. B) environmental protection laws. C) world oil, currency, and labor markets. D) legislation on equal employment. E) population changes by race, age, sex, and level of affluence.

E) population changes by race, age, sex, and level of affluence.

After a draft mission statement has been developed, it is important to A) ask managers to read several articles about mission statements as background information. B) vote on the mission statement. C) ask managers to prepare a mission statement for the organization. D) ask managers to seek support for the mission statement from their subordinates. E) request modifications, additions, and deletions to the mission statement.

E) request modifications, additions, and deletions to the mission statement.

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

Effective and carefully planned mission statements A) require major changes every few months. B) require major changes every few quarters. C) require major revision every few years. D) become ineffective in the first year. E) stand the test of time.

E) stand the test of time.

The Fortune 50 includes all of the following EXCEPT A) the largest retailers. B) the largest transportation companies. C) the largest utilities. D) the largest banks. E) the largest hospitals.

E) the largest hospitals.

Financial ratios are used to compare a firm's performance over different time periods, to compare the firm's performance to industry averages, and to compare a firm's performance with A) overall business standards. B) projected goals. C) the performance of suppliers. D) non-financial ratios. E) the performance of competitors.

E) the performance of competitors.

Which of the following is NOT a guideline for when an organization should use an unrelated diversification strategy? A) when revenues derived from an organization's current products or services would increase significantly by adding the new unrelated, products B) when an organization's present channels of distribution can be used to market the new products to current customers C) when the new products have countercyclical sales patterns compared to an organization's present products D) when an organization competes in a highly competitive and/or a no-growth industry E) when existing markets for an organization's present products are not yet saturated

E) when existing markets for an organization's present products are not yet saturated

Under which condition would a cost leadership strategy be especially effective? A) when there are many ways to achieve product differentiation that have value to buyers B) when most buyers use the product in different ways C) when buyers incur high costs in switching their purchases from one seller to another D) when buyers are small and have little power to bargain down prices E) when the products of rival sellers are essentially identical and supplies are readily available from any of several eager sellers

E) when the products of rival sellers are essentially identical and supplies are readily available from any of several eager sellers

A chief executive officer is located in the divisional level of a large firm.

False

A conservative rule of thumb for measuring the value of a firm is to establish a business' worth to be 10 times the firm's most current annual profit.

False

A differentiation strategy can be especially attractive when the industry has many different niches and segments, thereby allowing a focuser to pick a competitively attractive niche suited to its own resources.

False

A differentiation strategy can only be achieved with a large target market.

False

A firm can usually serve two or more market segments with the same strategy.

False

A firm should pursue defensive strategies if the coordinates of a SPACE directional vector are (+2, +3).

False

A firm's concern for employees in a mission statement addresses the question, "Is the firm responsive to social, community, and environmental concerns?"

False

A firm's philosophy in a mission statement addresses the question, "What is the firm's distinctive competence?"

False

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

False

A functional structure can be effective at eliminating short-term and narrow thinking.

False

A global strategy means considering individual countries distinctly, one at a time, when designing, producing, and marketing products.

False

A growing trend is for franchisers to buy out their part of the business from their franchisees

False

A low value of the dollar means lower exports and higher imports.

False

A low-cost focus strategy can be especially attractive when the target market niche is small.

False

A mission statement is a declaration of an organization's financial status.

False

A mission statement is usually just a simple statement of specific details.

False

A mission statement that is limited enough to exclude some ventures is a poor mission statement.

False

A rational change strategy means giving orders and enforcing those orders.

False

A vision statement answers the question, "What is our business?" whereas a mission statement answers, "What do we want to become?"

False

A vision statement identifies the scope of a firm's operations in product and market terms.

False

AT&T's mission statement focuses on telephones rather than on communication.

False

According to Albert Einstein, "Knowledge is far more important than intuition."

False

According to Campbell and Yeung, an organization's vision is associated with behavior and with the present.

False

According to Drucker, the most important time for a company to develop mission and vision statements is when the company is experiencing financial difficulty.

False

According to George Steiner, vagueness has no place in a good mission statement.

False

According to Peter Drucker, asking the question "What is our business?" is synonymous with asking the question "What is our vision?"

False

According to Porter, strategies allow organizations to gain competitive advantage from three different bases: cost leadership, differentiation, and decentralization.

False

According to Richard Rumelt, consonance and consistency are mostly based on a firm's external assessment.

False

According to the Grand Strategy Matrix, Quadrant III organizations compete in rapid-growth industries and have strong competitive positions.

False

All strategists have similar attitudes, values, ethics and concerns for social responsibility.

False

All the methods for determining a business' worth can be grouped into three basic approaches: what a firm earns, what a firm spends, and what a firm will bring in the market.

False

Allocating resources is one of the five basic activities (functions) performed by managers

False

Although a firm's power and prestige in domestic markets may be significantly enhanced when the firm competes globally, this rarely translates into improved negotiating power among creditors, suppliers, or distributors.

False

Although a useful step in the strategic management process, value chain analysis does little to help a firm monitor whether its prices and costs are competitive.

False

Although bankruptcy can be an effective type of retrenchment strategy, it does not allow firms to avoid major debt obligations and to void union contracts.

False

Although cash budgets can be a useful financial tool, publicly held companies are not required to complete them.

False

Although e-commerce has increased in popularity, it has actually led to increases in company expenses.

False

Although growth in revenues and profits is a common expectation of shareholders, it is not a measure of organizational success.

False

An external audit focuses on identifying and evaluating trends and events within the control of management.

False

An increase in interest rates is directly related to an increase in discretionary income and an increase in the demand for discretionary goods.

False

Annual objectives are especially important in strategy formulation.

False

Annual objectives are long-term milestones that organizations must achieve to reach short-term objectives.

False

Buying off the outstanding shares of your company from the open market to make the company private is what going public means.

False

By 2050, the Census Bureau projects that the number of Americans age 100 and older will dramatically decrease.

False

Capacity decisions concern distances from raw materials to production sites to customers

False

Changes in the organization's management, marketing, finance and accounting, production and operations, research and development (R&D), and management information systems (MIS) strengths and weaknesses should all be the focus of a revised EFE matrix in strategy evaluation.

False

Chapter 13 bankruptcy is similar to Chapter 11, but available only to large corporations.

False

Companies are avoiding outsourcing more and more because it is more expensive than traditional methods and it does not allow a firm to concentrate on core competencies.

False

Competitive advantages normally are the result of superiority in one of three areas: feasibility, consistency, or consonance.

False

Consistency, distinctiveness, advantage, and feasibility are Richard Rumelt's four criteria for evaluating a strategy.

False

Corporate intelligence can be defined as a systematic and ethical process for gathering and analyzing information about the competition's activities and general business trends to further a business's own goals.

False

Crises and firefighting in an organization give managers the extra time needed to plan ahead.

False

Deutsche Bank's entrance into the casino business in Las Vegas is an example of related diversification.

False

Differentiation guarantees competitive advantage.

False

Distribution becomes especially important when a firm is striving to implement a product development or backward integration strategy.

False

Diversification strategies are becoming more popular as organizations are finding it easier to manage diverse business activities.

False

Divestiture has become a popular strategy for firms to focus on their core business and become more diversified.

False

Divestiture is selling all of a company's assets, in parts, for their tangible worth.

False

Divestiture would be an appropriate strategy when a need exists to introduce a new technology quickly.

False

ESOPs work well even in firms with fluctuating payrolls and profits.

False

Economic factors do not have much impact on the attractiveness of strategies.

False

Effective strategy formulation can usually guarantee successful strategy implementation.

False

Employee wellness cannot be a part of sustainability.

False

Europeans are especially motivated by pay-for-performance, commission salaries, and objective measurement and reward systems.

False

Even though useful, strategic planning has been cast aside by corporate America since the early 1990s.

False

Exactly 70 percent of the world's population lives outside of the USA.

False

Financial ratio analysis really should not go beyond the actual calculation and interpretation of ratios.

False

Financial ratios are not applicable to nonprofit organizations.

False

Financial ratios are rarely used as criteria to evaluate strategies.

False

Firms should strive to engage in social activities that have no economic benefits, to avoid their being viewed as public relations ploys.

False

Foreign banks currently operate and compete in most parts of the United States.

False

Foreign revenue as a percentage of total company revenues is approaching 20 percent for Colgate-Palmolive.

False

Freund argues that key external factors must not be hierarchical.

False

Holding a meeting at which conflicting parties present their views and work through their differences is part of the defusion technique of managing conflict.

False

Horizontal consistency is more important than vertical consistency in developing annual objectives.

False

Horizontal integration is an appropriate strategy when the competitors of an organization are doing poorly.

False

Identifying an organization's existing vision, mission, objectives, and strategies is the final step for the strategic management process.

False

If a firm's present suppliers are expensive and unreliable in meeting the firm's needs for parts, components, and/or raw materials, the firm should pursue a horizontal integration strategy.

False

If an organization chooses to have both a mission and a vision, the mission statement should be established first.

False

If the rate of market growth and technical progress is rapid and there are few barriers to possible new entrants, then in-house R&D is the preferred solution.

False

In Japan, performance rather than seniority has traditionally been the key factor in determining pay.

False

In Mexico, business associates usually entertain each other at their homes.

False

In a multidivisional firm, objectives should be established for the overall company but not for each division.

False

In most cases, at least 500 words are required to effectively state a mission statement.

False

In most industries, only minor costs of producing a product or service are incurred within operations, so production and operations does not have great value as a competitive weapon in a company's overall strategy.

False

In most respects, business strategy is very different than military strategy.

False

In response to the so-called Obamacare legislation, many U.S. businesses are transitioning to having a larger percentage of their workforce being comprised of full-time employees rather than part-time workers.

False

In strategy evaluation, a revised IFE matrix should indicate how effective a firm's strategies have been in response to key opportunities and threats.

False

In terms of number of employees, restructuring usually involves increasing the size of the firm.

False

In the United States, an amicable relationship is often mandatory before conducting business.

False

In the context of conflict management and resolution, ignoring the problem in the hopes that the conflict will resolve itself is classified as a defusion technique.

False

In the last five years, the position of chief strategy officer (CSO) has diminished so drastically that today it is almost unheard of for companies to have such a position on staff.

False

Increased costs are a disadvantage of a good information system.

False

Intelligence gathering is an unethical business practice.

False

It is most effective to conduct strategy evaluation annually, at the end of the fiscal year.

False

It is okay for firms to create expectations that exceed the service the firm can or will offer if it will attract customers.

False

It is unusual for the claims and concerns of a company's stakeholders to vary or conflict.

False

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

False

JIT significantly increases the costs of implementing strategies.

False

Leverage ratios measure a firm's ability to meet maturing short-term obligations.

False

Limiting an organization's expenditures is the primary purpose of financial budgets.

False

Linear regression is based on the assumption that the future will be different from the past.

False

Major competitors' weaknesses can represent internal opportunities.

False

Management by intuition can be defined as operating from the "I've-already-made-up-my-mind-don't-bother-me-with-the-facts mode."

False

Managers must be very formal in strategic planning because formality fosters flexibility and creativity.

False

Many countries became less protectionist during the recent global economic recession.

False

Many organizations mistakenly spend more time and effort on the implementation of a plan, than on the formulation of the plan itself.

False

Market commonality is the extent to which the type and amount of a firm's internal resources are comparable to a rival.

False

Market penetration can be defined as the subdividing of a market into distinct subsets of customers according to needs and buying habits.

False

Mass communication and high technology have led to highly individualized and distinct patterns of consumption in diverse cultures worldwide.

False

Measuring organizational performance requires making changes to reposition a firm competitively for the future.

False

Metaphors are handed-down narratives of some wonderful event that are based on history but have been embellished with fictional detail.

False

More time and effort are required to identify and evaluate external trends and events in domestic corporations than in multinational ones.

False

Most quantitative evaluation criteria are geared to long-term objectives rather than annual objectives.

False

Most traditional retailers have tried in vain to use their online sales to boost in-store sales.

False

Motor vehicle firms in the United States are vulnerable when the value of the dollar falls against the yen and euro.

False

Newspaper companies in the United States provide a good example of how a company can sustain a competitive advantage over the long-term.

False

On the x-axis of the IE Matrix, an IFE total weighted score of 2.5 represents a weak internal position.

False

Once a firm acquires a competitive advantage, they are usually able to sustain the competitive advantage indefinitely.

False

Once an effective strategy is designed, modifications are rarely required.

False

One of the four recommended approaches for determining a firm's worth is to base the analysis on the selling price of a similar company.

False

One positive feature of QSPM is that it does not require intuitive judgments and educated assumptions.

False

Opportunities are a firm's distinctive competencies that cannot be easily matched or imitated by competitors.

False

Optimizing for tomorrow the trends of today is the purpose of strategic management.

False

Organizational change today should be viewed as a project or event rather than as a continuous project.

False

Organizations never develop their own projections.

False

Organizations should prepare contingency plans just for unfavorable events.

False

Organizing is the cornerstone of effective strategy formulation.

False

Planning should be performed mostly by middle management and then presented to top management for analysis and approval.

False

Production processes typically constitute less than 50 percent of a firm's total assets.

False

Proponents of the resource-based view argue that external factors are more important than internal factors for a firm in achieving and sustaining competitive advantage.

False

Punctuality is generally revered in all cultures of the world.

False

Qualitative forecasts are most appropriate when historical data are available and when the relationships among key variables are expected to remain the same in the future.

False

Regardless of the number of key opportunities and threats included in an External Factor Evaluation Matrix, the highest possible total weighted score for an organization is 4.0, and the lowest possible total weighted score is 0.0.

False

Research has failed to find a positive relationship between mission statements and organizational performance.

False

Research shows strategic management in small firms is more formal than in large firms.

False

Return on assets is the most widely used technique for determining whether debt, stock, or a combination of debt and stock is the best alternative for raising capital to implement strategies.

False

Running a competitive intelligence program requires lots of people, computers, and other resources.

False

Secondary buyouts decreased substantially from 2011 to 2012.

False

Segmenting industrial markets is generally simpler and easier than segmenting consumer markets.

False

Since a combination strategy bears no risk, many organizations pursue a combination of two or more strategies simultaneously.

False

Since the 1980s, most countries including the USA have been steadily lowering their tax rates.

False

Six Sigma is generally equally successful in retail firms and manufacturing firms.

False

Small, nonprofit organizations never develop mission statements.

False

Stage 2 in the strategy-formulation framework involves the Quantitative Strategic Planning Matrix.

False

Stakeholders of an organization include stockholders, customers and creditors, but not competitors.

False

Step 1 of a QSPM assigns weights to each key external and internal factor.

False

Stock issuances are always better than debt for raising capital.

False

Strategic objectives include those associated with growth in revenues, growth in earnings, higher dividends, larger profit margins, and improved cash flow.

False

Strategies clarify what can and cannot be done in pursuit of an organization's objectives.

False

Strategists in governmental organizations operate with far more strategic autonomy than their counterparts in private firms.

False

Strategists should strive to preserve, emphasize, and build upon aspects of an existing culture that are antagonistic to a proposed strategy.

False

Strategy changes may be highly effective and productive if a supportive culture does not exist.

False

Strategy evaluation is becoming increasingly easier with the passage of time, given technological advances.

False

Strategy evaluation should have a long-run focus and avoid a short-run focus.

False

Strategy formulation is the managing of forces during the action, whereas strategy implementation is the positioning of forces before the action.

False

Strategy implementation affects top and middle managers but not lower-level employees.

False

Successful strategy formulation generally rests upon the ability of an organization to sell some product or service.

False

Superior strategy formulation is well and good, but it cannot overcome an opponent's superiority in numbers and resources.

False

Tasks and activities are grouped together by business function in a divisional organizational structure.

False

Test marketing is used more frequently by industrial companies than consumer goods companies.

False

The BCG Matrix requires more information about the divisions than the IE Matrix.

False

The Grand Strategy Matrix is based on two evaluative dimensions, market share and market growth.

False

The I/O approach to competitive advantage advocates that internal factors are more important than external factors in a firm achieving competitive advantage.

False

The SWOT matrix, if used appropriately, does not have any limitations.

False

The Sarbanes-Oxley Act has eliminated the problem of firms inflating their financial projections, so stakeholders need not worry about the financial projections of different companies.

False

The United States has been more active than other nations in protectionist measures and has engaged in many "Buy American" policies.

False

The advantage of the educative change strategy is that implementation is quick and relatively easy.

False

The aim of an external audit is to develop an exhaustive list of every possible factor that could influence the business.

False

The best thing strategists can do is develop strategic plans themselves and then present them to operating managers to execute.

False

The controlling function of management is synonymous with strategy formulation.

False

The critical success factors in a Competitive Profile Matrix and EFE Matrix include both internal and external issues.

False

The drive to improve the efficiency of global business operations is leading to lesser functional specialization.

False

The final stage in strategic management is strategy implementation.

False

The first stage of the strategy-formulation framework is the input stage, and it is directly followed by the decision stage.

False

The first step in the process of developing a mission statement is to ask all participants to prepare what they believe the organization's mission should be.

False

The focus of restructuring is changing the way work is actually carried out.

False

The form of a Balanced Scorecard does not vary for different organizations or industries.

False

The four strategies of the SPACE Matrix are aggressive, conservative, offensive and defensive.

False

The historical trend of people moving from the Northeast and Midwest to the Sunbelt and West has dramatically increased.

False

The management function of organizing is included in human resource management.

False

The middle manager is the most visible and critical strategic manager.

False

The midpoint on the x-axis of a BCG Matrix is typically set at 0.05.

False

The mission statement should be short-preferably one sentence.

False

The most common type of financial budget is the capital budget.

False

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

False

The only costs involved in going public are the initial costs.

False

The only reasons businesses have for determining their worth is preparing to be sold or to buy other companies.

False

The operating philosophy of organizations should be to develop a product and then try to find a market for it.

False

The quantity or number of units of product that a firm must sell to break even is total fixed costs divided by (price per unit + variable costs per unit).

False

The rational change strategy is one that presents information to convince people of the need for change.

False

The trend in the U.S. is toward larger boards, with an average of 18 members being the norm.

False

The trend toward an older America is bad news for restaurants, hotels, airlines and home builders.

False

The understanding of Asian cultures is a strength U.S. firms have in competing with Pacific Rim firms.

False

The utility statement, "Do not offer me attractive looks; offer me clothes," is relevant in developing a mission statement.

False

The work and family issue is strictly a women's issue.

False

There are five component variables in the marketing mix: product, place, promotion, price, and people.

False

There are four basic types of diversification: concentric, conglomerate, forward, and backward.

False

There are now more American households consisting of married couples with children than of people living alone or with unrelated people.

False

Though China has more than 1.3 billion residents, the middle class segment that is able to buy goods and services is rapidly shrinking.

False

To determine the price-earnings ratio, divide the market price of the firm's annual earnings per share by the common stock and multiply this number by the firm's average net income for the past 10 years.

False

Total attractiveness scores are defined as the sum of the attractiveness scores in a given column of the QSPM and are computed in the second step of the QSPM.

False

Trying to achieve optimal results with an unpopular strategy is always better than achieving satisfactory results with a popular strategy.

False

U.S. firms are not being challenged in the computer industry.

False

Unrelated diversification may be an especially effective strategy when an organization's basic industry is experiencing increasing annual sales and profits.

False

Weaknesses of competitors in foreign lands are often underestimated, and strengths are often overestimated.

False

Well-conceived and properly executed mission and vision statements do not need to be subject to revision.

False

Well-run organizations are able to completely avoid conflict.

False

When a company has been successful the question "What is our business?" becomes unnecessary.

False

When additional stock is issued to finance implementation of strategy, ownership and control of the enterprise are strengthened.

False

When completing the matching stage of the strategy-formulation framework, the SWOT Matrix needs to be completed before the SPACE Matrix.

False

When developing a mission statement, it is usually advisable to involve as few managers as possible.

False

When developing an organizational chart, the title president should be reserved for the top executive of the firm.

False

When performing projected financial analysis, the balance sheet should be prepared before the income statement.

False

When the correlation between dollar sales and dollar marketing expenditures has historically been low, market penetration is an appropriate strategy.

False

Whereas the mission statement answers the question, "What do we want to become?" the vision statement answers the question, "What is our business?"

False

While forecasts might not be perfect, they are never wildly inaccurate.

False

While interesting, organizational culture does not significantly affect business decisions.

False

While multinational corporations face almost limitless social, cultural, demographic, environmental, political, governmental, legal, technological, and competitive opportunities and threats, the number and complexity of these factors do not dramatically increase with the number of products produced and the number of geographic areas served.

False

While outsourcing manufacturing, tech support, and back-office work is quite common, it is still unheard of for companies to outsource product design.

False

While the number of people shopping online has increased, the average amount spent online has decreased.

False

While vision and mission statements are part of numerous internal reports, they should never be displayed in a firm's premises.

False

With a divisional structure, it is possible that competition between divisions may become so intense that it leads to improved sharing of ideas and resources for the common good of the firm.

False

With the rise in world commerce, government regulatory bodies are no longer able to closely monitor foreign business practices.

False

Discuss guidelines used to determine whether a firm should conduct R&D internally or externally.

First, if the rate of technical progress is slow, the rate of market growth is moderate, and there are significant barriers to possible new entrants, then in-house R&D is the preferred solution. Second, if technology is changing rapidly, and the market is growing slowly, then a major in-house effort in R&D may be risky. Third, if technology is changing slowly but the market is growing quickly, there generally is not enough time for in-house development. Finally, if both technical progress and market growth are fast, R&D expertise should be obtained through acquisition of a well-established firm in the industry.

Explain the important issues involved in deciding whether to go public, i.e., a private firm considering becoming a public firm. Include cost estimates, advantages and disadvantages.

Going public is not recommended for companies with less than $10 million in sales, because the initial costs can be too high for the firm to generate sufficient cash flow to make going public worthwhile. The average total cost paid to lawyers, accountants, and underwriters when the initial issuance is under $1 million is 25%. For issuances over $20 million this amount drops to 5%. In addition to initial costs, there are costs and obligations associated with reporting and management in a publicly held firm. For firms with more than $10 million in sales, going public can provide major advantages: It can allow the firm to raise capital to develop new products, build plants, expand, grow, and market products and services more effectively.

Discuss some ways in which management information systems can benefit a company.

Having an effective management information system (MIS) may be the most important factor in differentiating successful from unsuccessful firms. Information collection, retrieval, and storage can be used to create competitive advantages in ways such as cross-selling to customers, monitoring suppliers, keeping managers and employees informed, coordinating activities among divisions, and managing funds. Like inventory and human resources, information is now recognized as a valuable organizational asset that can be controlled and managed. A good information system can allow a firm to reduce costs. Improved quality and service often result from an improved information system.

Discuss ISO 14000 and ISO 14001.

ISO 14000 refers to a series of voluntary standards in the environmental field. The ISO 14000 family of standards concerns the extent to which a firm minimizes harmful effects on the environment caused by its activities and continually monitors and improves its own environmental performance. Included in the ISO 14000 series are the ISO 14001 standards in fields such as environmental auditing, environmental performance evaluation, environmental labeling, and life-cycle assessment. ISO 14001 is a set of standards adopted by thousands of firms worldwide to certify to their constituencies that they are conducting business in an environmentally friendly manner.

If you construct a SPACE Matrix and the directional vector points to the lower left quadrant, what type of strategies would you recommend? Give several examples.

If the directional vector points to the lower-left quadrant of the SPACE Matrix, students should suggest defensive strategies. Defensive strategies include retrenchment, divestiture, liquidation, and related diversification.

Discuss the economic outlook for Africa.

Investors are now looking closely at Africa in the wake of low interest rates and slow growth elsewhere on the planet. Many African companies are expanding operations in Africa. For example, South Africa's Shoprite Group in 2013 added 223 stores in 16 African countries other than South Africa. Reasons companies are opening outlets in Africa is the rapidly growing middle class and an average GDP growth of 5 percent for the continent through 2017 according to the IMF. Also the World Bank says that food demand across Africa will double between 2012 and 2020. Approximately 40 percent of Africans now live in urban areas and the number of households with discretionary income should increase 50 percent by the end of the decade. Graham Allan, CEO of Yum Restaurants International, recently said, "A lot of companies, especially Chinese ones, have invested in Africa; we share the general view that Africa over the next 10 to 20 years will have massive potential." McKinsey & Co. says the number of consumers who can spend beyond bare necessities is greater now in Africa than India. From 2000 to 2009, foreign direct investment in Africa increased 600 percent to $58.56 billion.

List some of the diverse and unique risks that face multinational corporations (MNCs).

MNCs face unique and diverse risks, such as expropriation of assets, currency losses through exchange rate fluctuations, unfavorable foreign court interpretations of contracts and agreements, social/political disturbances, import/export restrictions, tariffs, and trade barriers. Strategists in MNCs are often confronted with the need to be globally competitive and nationally responsive at the same time. With the rise in world commerce, government and regulatory bodies are more closely monitoring foreign business practices. The U.S. Foreign Corrupt Practices Act, for example, monitors business practices in many areas.

Explain the concept of matching in the strategy formulation framework. Give at least three examples of matching.

Matching external and internal critical success factors is the key to effectively generating feasible alternative strategies. See Table 6-1 for examples of matching.

Compare and contrast business culture in the USA with Mexico.

Mexicans desire harmony rather than conflict; there is a much lower tolerance for adversarial relations or frictions at work in Mexico as compared to the United States. Whereas U.S. business embodies individualism, achievement, competition, curiosity, pragmatism, informality, spontaneity, and doing more than expected on the job, Mexican businesses stress collectivism, continuity, cooperation, belongingness, formality, and doing exactly what you're told. Mexicans do not feel compelled to follow rules that are not associated with a particular person in authority they work for and know well. Thus signs to wear earplugs or safety glasses, or attendance or seniority policies, and even one-way street signs are often ignored. Whereas Americans follow the rules, Mexicans often do not. Life is slower in Mexico than the United States. Tardiness is common everywhere. Meeting times and appointments are not rigid.

Describe some key features of the European work environment.

Most European workers are unionized and enjoy more frequent vacations and holidays than U.S. workers. A 90-minute lunch break plus 20-minute morning and afternoon breaks are common in European firms. Guaranteed permanent employment is typically a part of employment contracts in Europe. In socialist countries like France and the U.K., the only grounds for immediate dismissal from work is a criminal offense. Many Europeans resent pay-for-performance, commission salaries, and objective measurement and reward systems. Many Europeans also find the notion of team spirit difficult to grasp because the unionized environment has dichotomized worker-management relations throughout Europe.

What are ideal points on perceptual maps? Explain their relation to market segments and demand voids.

Perceptual maps may display consumers' ideal points. These points reflect ideal combinations of the two dimensions as seen by a consumer. Each dot represents one respondent's ideal combination of the two dimensions. An area where there is a cluster of ideal points indicates a market segment. Areas without ideal points are sometimes referred to as demand voids. A company considering introducing a new product will look for areas with a high density of ideal points. They will also look for areas without competitive rivals (a vacant niche), perhaps best done by placing both the (1) ideal points and (2) competing products on the same map.

Name at least ten issues that may require a management policy.

Possible answers include: 1) To offer extensive or limited management development workshops and seminars. 2) To centralize or decentralize employee-training activities. 3) To recruit through employment agencies, college campuses and/or newspapers. 4) To promote from within or to hire from the outside. 5) To promote on the basis of merit or on the basis of seniority. 6) To tie executive compensation to long-term and/or annual goals. 7) To offer numerous or few employee benefits. 8) To negotiate directly or indirectly with labor unions. 9) To delegate authority for large expenditures or to retain this authority centrally. 10) To allow much, some, or no overtime work. 11) To establish a high- or low-safety stock of inventory. 12) To use one or more suppliers. 13) To buy, lease, or rent new production equipment. 14) The degree to which to stress quality control. 15) To establish many or only a few production standards. 16) To operate one, two, or three shifts. 17) To discourage using insider information for personal gain. 18) To discourage sexual harassment. 19) To discourage smoking at work. 20) To discourage insider trading. 21) To discourage moonlighting.

Name five examples of finance and accounting decisions that may require policies

Possible answers include: 1) To raise capital with short-term debt, long-term debt, preferred stock, or common stock; 2) To lease or buy fixed assets; 3) To determine an appropriate dividend payout ratio; 4) To use LIFO, FIFO, or a market-value accounting approach; 5) To extend the time of accounts receivable. 6) To establish a certain percentage discount on accounts within a specified period of time; 7) To determine the amount of cash that should be kept on hand.

Discuss some of the reasons why strategy evaluation is becoming increasingly difficult with the passage of time.

Possible answers include: Domestic and world economies were more stable in years past; product life cycles were longer; product development cycles were longer; technological advancement was slower; change occurred less frequently; there were fewer competitors; foreign companies were weak; and there were more regulated industries. Other reasons include the following trends: 1) A dramatic increase in the environment's complexity; 2) The increasing difficulty of predicting the future with accuracy; 3) The increasing number of variables; 4) The rapid rate of obsolescence of even the best plans; 5) The increase in the number of both domestic and world events affecting organizations; and 6) The decreasing time span for which planning can be done with any degree of certainty.

Within an organization, who is responsible for providing ethics leadership?

Primary responsibility for ensuring ethical behavior rests with a firm's strategists. However, an integral part of the responsibility of all managers is to provide ethics leadership by constant example and demonstration. Managers hold positions that enable them to influence and educate many people. This makes managers responsible for developing and implementing ethical decision making.

Explain the concept of protectionism.

Protectionism refers to countries imposing tariffs, taxes, and regulations on firms outside the country to favor their own companies and people. Many countries became more protectionist during the recent global economic recession. Most economists argue that protectionism harms the world economy because it inhibits trade among countries and invites retaliation.

What quantitative criteria are commonly used to evaluate strategies? Give several examples of these criteria.

Quantitative criteria commonly used to evaluate strategies are financial ratios, which strategists use to make three critical comparisons: 1) comparing the firm's performance over different time periods; 2) comparing the firm's performance to that of competitors'; and 3) comparing the firm's performance to industry averages.

In a BCG Matrix, all divisions are classified as either Question Marks, Stars, Cash Cows, or Dogs. Define each of these terms.

Question Marks have a low relative market share position, yet they compete in a high-growth industry. Stars represent the organization's best long-run opportunities for growth and profitability, having a high relative market share and a high industry growth rate. Cash Cows have a high relative market share position but compete in a low-growth industry. Dogs have a low relative market share position and compete in a slow- or no-market-growth industry.

Compare and contrast Ralph Nader's and Milton Friedman's positions on social responsibility. With whose view do you agree?

Ralph Nader proclaims that organizations have tremendous social obligations. Nader points out that ExxonMobil has more assets than most countries, and because of this such firms have an obligation to help society cure its many ills. The economist Milton Friedman asserts that organizations have no obligation to do any more for society than is legally required. Friedman may contend that it is irresponsible for a firm to give monies to charity. Students' responses will vary regarding their personal view on social responsibility.

Compare and contrast restructuring and reengineering.

Restructuring involves reducing the size of the firm in terms of number of employees, number of divisions or units, and number of hierarchical levels in the firm's organizational structure. Restructuring is concerned primarily with shareholder well-being rather than employee well-being. In contrast, reengineering is concerned more with employee and customer well-being than shareholder well-being. Reengineering involves reconfiguring or redesigning work, jobs, and processes for the purpose of improving cost, quality, service, and speed. Whereas restructuring is concerned with eliminating or establishing, shrinking or enlarging, and moving organizational departments and divisions, the focus of reengineering is changing the way work is actually carried out. Reengineering is characterized by many tactical decisions, whereas restructuring is characterized by strategic decisions.

Compare and contrast two of Rumelt's four criteria for evaluating strategies.

Rumelt's four criteria for evaluating strategies are consistency, consonance, feasibility, and advantage. Consonance and advantage are mostly based on a firm's external assessment, whereas consistency and feasibility are largely based on an internal assessment. Consistency: a strategy should not present inconsistent goals and policies. Organizational conflict and interdepartmental bickering may be a sign of strategic inconsistency. Consonance: this refers to the need for strategists to examine sets of trends, as well as individual trends, in evaluating strategies. Feasibility: the final broad test of strategy is feasibility; that is, can the strategy be attempted within the physical, human, and financial resources of the enterprise? Advantage: a strategy must provide for the creation and/or maintenance of a competitive advantage in a selected area of activity. Competitive advantages normally are the result of superiority in one of three areas: resources, skills, or position.

Explain why it is important to encourage whistle-blowing in a firm.

Some firms warn managers and employees that failing to report an ethical violation by others could bring discharge. The SEC recently strengthened its whistle-blowing policies, virtually mandating that anyone seeing unethical activity report such behavior. Whistle-blowing refers to policies that require employees to report any unethical violations they discover or see in the firm.

Discuss the appropriate role of a board of directors in an organization.

Some principles are: No more than two directors are current or former company executives. The audit, compensation and nominating committees are made up solely of outside directors. Each director owns a large equity stake in the company. Each director attends at least 75 percent of all meetings. The board meets regularly without management present and evaluates its own performance annually. The CEO is not also the Chairperson of the Board. There are no interlocking directorships (where a director or CEO sits on another director's board).

Explain why strategy evaluation can be a complex and sensitive undertaking.

Strategy evaluation can be a complex and sensitive undertaking. Too much emphasis on evaluating strategies may be expensive and counterproductive. No one likes to be evaluated too closely! The more managers attempt to evaluate the behavior of others, the less control they have. Yet too little or no evaluation can create even worse problems. Strategy evaluation is essential to ensure that stated objectives are being achieved.

What are five differences between strategy formulation and strategy implementation?

Strategy formulation is positioning forces before the action, whereas strategy implementation is managing forces during the action. Strategy formulation focuses on effectiveness, whereas strategy implementation focuses on efficiency. Strategy formulation is primarily an intellectual process, whereas strategy implementation is primarily an operational process. Strategy formulation requires good intuitive and analytical skills, whereas strategy implementation requires special motivational and leadership skills. Strategy formulation requires coordination among a few individuals, whereas strategy implementation requires coordination among many individuals.

Identify some characteristics of an effective evaluation system.

Strategy-evaluation activities must be economical, meaningful, and timely. Strategy evaluation should be designed to provide a true picture of what is happening. Controls need to be action-oriented rather than information-oriented. The strategy-evaluation process should not dominate decisions; it should foster mutual understanding, trust, and common sense. The test of an effective system is its usefulness, not its complexity. There is no one ideal system; the unique characteristics of a firm should determine the system's final design.

Name five examples of marketing decisions that may require policies.

Student answers may vary. Possible answers include: 1) To use exclusive dealerships or multiple channels of distribution; 2) To use heavy, light, or no TV advertising; 3) To limit (or not) the share of business done with a single customer; 4) To be a price leader or a price follower; 5) To offer a complete or limited warranty; 6) To reward salespeople based on straight salary, straight commission, or a combination salary/commission; 7) How to make advertisements more interactive to be more effective; and 8) How to best take advantage of Facebook and Twitter conversations about the company and industry.

Give five sets of coordinates of SPACE Matrix directional vectors that would suggest conservative strategies to be most appropriate.

Student answers will vary. However, five examples they may suggest are (-1, 1), (-2, 2), (-3, 3), (-4, 4), and (-5, 5). Any pair of coordinates with a negative x-coordinate and a positive y-coordinate is correct, in other words, any pair of coordinates that describe a point in the upper-left quadrant.

Identify and describe three approaches for determining a business' worth.

Students should identify and describe three of the following approaches. The first approach is determining its net worth or stockholders' equity. After calculating net worth, add or subtract an appropriate amount for goodwill, overvalued or undervalued assets, and intangibles. The second approach grows out of the belief that the worth of any business should be based largely on the future benefits its owners may derive through net profits. A conservative rule of thumb is to establish a business' worth as five times the firm's current annual profit. The third approach is called the price-earnings ratio method. It divides the market price of the firm's common stock by the annual earnings per share and multiplies this number by the firm's average net income for the past five years. The fourth method can be called the outstanding shares method. To use this method, simply multiply the number of shares outstanding by the market price per share and add a premium. The premium is simply a per-share dollar amount that a person or firm is willing to pay to control the other company.

List five reasons why preserving the environment should be a permanent part of doing business.

Students should list any 5 of the following 7 reasons why firms should be "green:" 1) Consumer demand for environmentally safe products and packages is high. 2) Public opinion demanding that firms conduct business in ways that preserve the natural environment is strong. 3) Environmental advocacy groups now have over 20 million Americans as members. 4) Federal and state environmental regulations are changing rapidly and becoming more complex. 5) More lenders are examining the environmental liabilities of businesses seeking loans. 6) Many consumers, suppliers, distributors, and investors shun doing business with environmentally weak firms. 7) Liability suits and fines against firms having environmental problems are on the rise.

Discuss the different perspectives and concerns of the Balanced Scorecard.

The Balanced Scorecard is a process that allows firms to evaluate strategies from four perspectives: financial performance, customer knowledge, internal business processes, and learning and growth. It aims to balance long-term concerns with short-term concerns, financial with non-financial concerns, and internal with external concerns.

Compare and contrast the IE Matrix with the BCG Matrix.

The IE Matrix is similar to the BCG Matrix in that both tools involve plotting organizational divisions in a schematic diagram. Also, the size of each circle represents the percentage sales contribution of each division, and pie slices reveal the percentage profit contribution of each division in both the BCG and IE Matrix. Some important differences between the IE Matrix and the BCG Matrix include: 1) different axes; 2) the IE Matrix requires more information about the divisions than the BCG Matrix; and 3) the strategic implications of each matrix are different.

Describe each of the activities that comprise strategy evaluation.

The activities that comprise strategy evaluation are: 1) reviewing bases of an organization's strategy; 2) measuring organizational performance; and 3) taking corrective actions. Step 1 can be achieved by developing a revised EFE Matrix and IFE Matrix. External opportunities and threats and internal strengths and weaknesses that represent the bases of current strategies should continually be monitored for change. Step 2 includes comparing expected results to actual results, investigating deviations from plans, evaluating individual performance, and examining progress being made toward meeting stated objectives. Criteria for evaluating strategies should be measurable and easily verifiable. Step 3 requires making changes to competitively reposition a firm for the future. Examples of such action are altering a firm's structure, selling a division, or revising a business mission. Taking corrective actions does not necessarily mean that existing strategies will be abandoned or even that new strategies must be formulated.

There are four basic ways a divisionally structured firm could be organized. What are these four ways? Give an example of each.

The four basic ways a divisionally structured firm could be organized are: 1) by geographic area. An example of this would be any organization with similar branch facilities located in widely dispersed areas, like Hershey; 2) by product or service. General Motors, DuPont, Microsoft, and Procter & Gamble are examples of divisional structure by product; 3) by customer. Book publishing companies often organize their activities around customer groups such as college, secondary schools, and private commercial schools; and 4) by process. An example of this is a manufacturing business organized into six divisions: electrical work, glass cutting, welding, grinding, painting and foundry work. Each division would be responsible for generating revenues and profits.

Explain the benefits and limitations of developing a Boston Consulting Group Matrix.

The major benefit of the BCG Matrix is that it draws attention to the cash flow, investment characteristics, and needs of an organization's various divisions. The BCG Matrix has some limitations: 1) Viewing every business as either a Star, Cash Cow, Dog or Question Mark is an oversimplification; many businesses fall right in the middle of the BCG Matrix and thus are not easily classified; 2) the BCG Matrix does not reflect whether or not various divisions or their industries are growing over time; that is, the matrix has no temporal qualities, but rather it is a snapshot of an organization at a given point in time; and 3) other variables besides relative market share position and industry growth rate in sales are important in making strategic decisions about various divisions.

What are some of the reasons for and against the U.S. adopting international financial reporting standards (IFRS).

The old GAAP standards comprised 25,000 pages, while the new IFRS comprises only 5,000 pages, so in that sense IFRS is less cumbersome. IFRS rules are more streamlined and less complex than GAAP. The Chamber of Commerce supports the switch and says it will lead to much more cross-border commerce and help the U.S. compete in the world economy. Others say the switch will help U.S. companies raise capital abroad and do business with firms abroad. On the other hand, the switch will cost U.S. businesses millions of dollars in fees and upgraded software systems and training. U.S. CPAs need to study global accounting principles intensely. The switch is also anticipated to be plagued by gaping differences in business customs, financial regulations, tax laws, politics, and other factors.

Discuss how Japan is dealing with problems associated with an aging and shrinking workforce.

The percentage of persons age 65 or older exceeds 20 percent in Japan. Unlike the USA, Japan is reluctant to rely on large-scale immigration to bolster its workforce. Instead Japan is providing incentives for its elderly to work until ages 65 to 75. In addition to keeping the elderly at work, Japan's other key remedy for sustaining its workforce in factories and businesses involves reversing the old-fashioned trend of keeping women at home.

Explain how to perform a projected financial analysis.

The steps to performing a projected financial analysis are as follows: 1) prepare the projected income statement before the balance sheet and start by forecasting sales as accurately as possible; 2) use the percentage-of-sales method to project CGS and the expense items in the income statement; 3) calculate the projected net income; 4) subtract from the net income any dividends to be paid for that year and bring this retained earnings amount over to the balance sheet by adding it to the prior year's RE shown on the balance sheet; 5) project the balance sheet items, beginning with retained earnings and then forecasting stockholders' equity, long-term liabilities, current liabilities, total liabilities, total assets, fixed assets, and current assets—in that order; and 6) list comments on the projected statements.

Describe the steps involved in effective contingency planning.

The suggested process of effective contingency planning is as follows: 1) Identify both good and bad events that could jeopardize strategies; 2) determine when the good and bad events are likely to occur; 3) determine the expected pros and cons of each contingency event; 4) develop contingency plans for key contingency events; 5) determine early warning trigger points for key contingency events and monitor them.

What are the three particular challenges that strategists face today?

The three challenges that strategists face today are: 1) deciding whether the process of strategic management should be more of an art or a science; 2) deciding whether strategies should be visible or hidden from stakeholders; or 3) deciding whether the process should be more top-down or bottom-up in the firm.

What are the five steps required for perceptual mapping? Give an example of a perceptual map for an organization of your choice.

There are five steps required for effective perceptual mapping. These five steps are as follows: 1) select key criteria that effectively differentiate products or services in the industry; 2) diagram a two-dimensional product-positioning map with specified criteria on each axis; 3) plot major competitors' products or services in the resultant four-quadrant matrix; 4) identify areas in the positioning map where the company's products or services could be most competitive in the given target market and look for niches; and 5) develop a marketing plan to position the company's products or services appropriately. Student examples of perceptual maps will vary.

Discuss the dos and don'ts in developing organizational charts.

There are some basic dos and don'ts in regard to devising or constructing organizational charts, especially for midsize to large firms. First of all, reserve the title CEO for the top executive of the firm. Don't use the title "president" for the top person; use it for the division top managers if there are divisions within the firm. Also, do not use the title "president" for functional business executives. They should have the title "chief," or "vice president," or "manager," or "officer," such as "Chief Information Officer," or "VP of Human Resources." Further, do not recommend a dual title (such as "CEO and President") for just one executive. Actually, "chairperson" is much better than "chairman" for this title. Directly below the CEO, it is best to have a COO (chief operating officer) with any division presidents reporting directly to the COO. On the same level as the COO and also reporting to the CEO, draw in your functional business executives, such as a CFO (chief financial officer), VP of Human Resources, a CSO (Chief Strategy Officer), a CIO (Chief Information Officer), a CMO (Chief Marketing Officer), a VP of R&D, a VP of Legal Affairs, an Investment Relations Officer, Maintenance Superintendent, etc. Note in Figure 7-8 that these positions are labeled and placed appropriately. Note that a controller and/or treasurer would normally report to the CFO.

Describe the positive features and limitations of QSPM.

There are three positive features of QSPM: 1) Sets of strategies can be examined sequentially or simultaneously; 2) 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; and 3) the last positive feature is that it requires strategists to integrate pertinent external and internal factors into the decision process. The QSPM is not without some limitations: 1) It always requires intuitive judgments and educated assumptions; 2) The ratings and attractiveness scores require judgmental decisions, even though they should be based on objective information; and 3) it can be only as good as the prerequisite information and matching analyses upon which it is based.

Discuss at least five potential advantages to initiating, continuing, and/or expanding international operations.

They include: 1) Firms can gain new customers for their products. 2) Foreign operations can absorb excess capacity, reduce unit costs, and spread economic risks over a wider number of markets. 3) Foreign operations can allow firms to establish low-cost production facilities in locations close to raw materials and/or cheap labor. 4) Competitors in foreign markets may not exist, or competition may be less intense than in domestic markets. 5) Foreign operations may result in reduced tariffs, lower taxes, and favorable political treatment. 6) Joint ventures can enable firms to learn the technology, culture, and business practices of other people and to make contacts with potential customers, suppliers, creditors, and distributors in foreign countries. 7) Economies of scale can be achieved from operation in global rather than solely domestic markets. Larger-scale production and better efficiencies allow higher sales volumes and lower-price offerings. 8) A firm's power and prestige in domestic markets may be significantly enhanced if the firm competes globally, which can translate into improved negotiating power among creditors, distributors, suppliers, etc.

Discuss at least five potential disadvantages to initiating, continuing, and/or expanding international operations.

They include: 1) Foreign operations could be seized by nationalistic factions. 2) Firms confront different and often little-understood social, cultural, demographic, environmental, political, governmental, legal, technological, economic, and competitive forces when doing business internationally. This can make communication in the firm difficult. 3) Weaknesses of competitors in foreign lands are often overestimated, and strengths are often underestimated. Keeping informed about the number and nature of competitors is more difficult when doing business internationally. 4) Language, culture, and value systems differ among countries, which can create barriers to communication and problems managing people. 5) Gaining an understanding of regional organizations is difficult but is often required in doing business internationally. 6) Dealing with two or more monetary systems can complicate international business operations.

Discuss some contingency plans commonly established by firms.

They include: 1) if a major competitor withdraws from particular markets as intelligence reports indicate, what actions should our firm take? 2) If our sales objectives are not reached, what actions should our firm take to avoid profit losses? 3) If demand for our new product exceeds plans, what actions should our firm take to meet the higher demand? 4) If certain disasters occur — such as loss of computer capabilities; a hostile takeover attempt; loss of patent protection — what actions should our firm take? 5) If a new technological advancement makes our new product obsolete sooner than expected, what actions should our firm take?

Describe how organizations can create an ethics "culture."

To create an ethics culture, many organizations have developed a code-of-conduct manual outlining ethical expectations and giving examples of situations that commonly arise in their business. Citicorp even developed a business ethics board game, played by thousands of employees worldwide, that gives players the opportunity to react to hypothetical ethical situations. Ethics workshops and training are also key. Ethics training programs should include messages from the CEO or business owners emphasizing ethical business practices, the development and discussion of codes of ethics, and procedures for discussing and reporting unethical behavior. Firms can align ethical and strategic decision making by incorporating ethical considerations into longer-term planning, by integrating ethical decision making in the performance appraisal process, by encouraging whistle-blowing, and by monitoring departmental and corporate performance regarding ethical issues.

A best-value strategy offers products or services to a wide range of customers at the best price-value available on the market.

True

A characteristic that describes the most competitive companies is adopting the adage, "whether it's broke or not, fix it;" in other words, continually strive to improve everything about the firm.

True

A clear mission statement describes the values and priorities of an organization.

True

A cost leadership strategy can be especially effective when most buyers use the product in the same ways.

True

A cost/benefit analysis is an appraisal of the costs, benefits, and risks associated with marketing decisions.

True

A current trend in R&D management involves the lifting of the veil of secrecy whereby firms, even major competitors, are joining forces to develop new products.

True

A dual bonus system based on both annual objectives and long-term objectives is becoming common.

True

A financial budget is a document that details how funds will be obtained and spent for a specified period of time.

True

A force change strategy is plagued by low commitment and high resistance.

True

A form of customer analysis is administering customer surveys.

True

A good mission statement serves as a framework for evaluating both current and prospective activities.

True

A low-cost focus strategy offers products or services to a small range of customers at the lowest price available on the market.

True

A major effort in R&D may be very risky if technology is changing rapidly and the market is growing slowly.

True

A mission statement is a declaration of an organization's reason for being.

True

A mission statement promotes a sense of shared expectations among all managers and employees.

True

A mission statement should be broad enough to reconcile differences among an organization's various stakeholders.

True

A mission statement should be broad in scope, since concrete specification could be the base for rallying opposition.

True

A mission statement, sometimes called a creed statement, can be defined as an enduring statement of purpose that distinguishes one organization from other similar enterprises.

True

A new trend with regard to advertising products or services on the Internet is to base advertising rates solely on sales rates.

True

A potential advantage to initiating, continuing, or expanding international operations is that foreign operations can absorb excess capacity, reduce unit costs, and spread economic risks over a wider number of markets.

True

A primary reason why most domestic firms are engaging in global operations is that growth in demand for goods and services outside the USA is considerably higher than inside.

True

A projected financial analysis can be used to forecast the impact of various implementation decisions.

True

A reason for concern over the dilution of company stock is a possible hostile takeover.

True

A strategy of seeking ownership or increased control of a firm's suppliers is backward integration.

True

A task force of managers from different units of the organization, supported by staff, should be charged with determining the 20 most important strengths and weaknesses that should influence the future of the organization.

True

According to Campbell and Yeung, the process of developing a mission statement should create an "emotional bond" and "sense of mission" between the organization and its employees.

True

According to Greenley, strategic management provides increased discipline, enhanced communication, and more effective allocation of time and resources.

True

According to King and Cleland, carefully developed and written mission statements provide a basis for organizing work, departments, activities, and segments around a common purpose.

True

According to Michael Porter, five competitive forces create vital opportunities and threats to organizations: 1) rivalry among competing firms, 2) potential entry of new competitors, 3) potential development of substitute products, 4) bargaining power of suppliers, and 5) bargaining power of consumers.

True

According to Peter Drucker, developing a clear business vision and mission is the first responsibility of strategists.

True

According to Rumelt, consistency and feasibility are largely based on a firm's internal assessment.

True

According to Vern McGinnis, an effective mission statement should define what the organization is and what the organization aspires to be.

True

According to research, a healthier workforce can more effectively and efficiently implement strategies.

True

According to research, participation in strategy-evaluation activities is one of the best ways to overcome individuals' resistance to change.

True

According to research, the most successful new product companies use a research and development strategy that ties internal strengths to external opportunities and is linked with objectives.

True

According to the Grand Strategy Matrix, when a Quadrant I firm is too heavily committed to a single product, then related diversification may reduce the risks associated with a narrow product line.

True

Activity ratios measure how effectively a firm is using its resources.

True

Additional capital is often required for successful strategy implementation.

True

After segmenting markets so a firm can target particular customer groups, the next step is to find out what customer groups want and expect.

True

All firms have a strategy, even if it is informal, unstructured, and sporadic.

True

Alternative strategies don't come out of the blue; they are derived from the firm's vision, mission, and objectives.

True

Alvin Toffler argues that environments are becoming so dynamic and complex that they threaten people and organizations with future shock, in his thought-provoking books entitled Future Shock and The Third Wave.

True

American firms that seem insulated from foreign competition today may be vulnerable tomorrow.

True

An EPS/EBIT chart can be constructed to determine the break-even point, where one financing alternative becomes more attractive than another.

True

An acquisition occurs when a large organization purchases a smaller one or vice versa.

True

An appropriate strategy when an organization has excess production capacity is market development.

True

An area on a perceptual map where there is a cluster of ideal points indicates a market segment.

True

An effective CI program allows all areas of a firm to access consistent and verifiable information in making decisions.

True

An effective mission statement generates the impression a firm is successful, has direction, and is worthy of time, support and investment.

True

An example of a marketing decision is whether or not to limit the share of business done with a single customer.

True

An important business activity in Japan is entertaining because it strengthens Wa.

True

An objective, logical, systematic approach for making major decisions in an organization is a way to describe the strategic-management process.

True

An organization's culture compares to an individual's personality in the sense that no two organizations have the same culture and no two individuals have the same personality.

True

An organization's present strategies, objectives and mission, coupled with the external and internal audit information, provide a basis for generating and evaluating feasible alternative strategies.

True

Analytical and intuitive thinking should complement each other.

True

Annual objectives are key components in the strategic-management process because they dictate how resources will be allocated.

True

Anything the firm does especially well compared to rival firms could be considered a competitive advantage.

True

Application of the strategic-management process is typically more formal in larger and well-established organizations.

True

As many managers and employees as possible should be involved in the process of performing an external audit.

True

Before entering international markets, firms should do research to try and diminish the risk of doing business in new markets.

True

Benchmarking is an analytical tool used to determine whether a firm's value chain activities are competitive compared to rivals.

True

Besides net profit from operations and the sale of assets, two basic sources of funds for an ongoing enterprise are debt and equity.

True

Besides reducing worker alienation and stimulating productivity, ESOPs allow firms other benefits, such as substantial tax savings.

True

By 2075, the United States will have no racial or ethnic majority.

True

Carefully prepared statements of vision and mission are widely recognized as the first step in strategic management.

True

Changing a strategy to fit an existing culture is not as effective as changing a firm's culture to fit a new strategy.

True

Commitment and understanding are the most important benefits of strategic management.

True

Competitive intelligence is not considered corporate espionage because 95 percent of the information a company needs to make strategic decisions is available and accessible to the public.

True

Conservative strategies in a SPACE Matrix most often include product development, market development, market penetration, and related diversification.

True

Constructing an Internal Factor Evaluation Matrix is a summary step when conducting an internal strategic-management audit.

True

Cooperative arrangements and joint ventures are being used increasingly.

True

Corrective action in strategy evaluation is necessary to keep an organization on track toward achieving stated objectives.

True

Criteria for evaluating strategies should be measurable and easily verifiable.

True

During the 2012 Super Bowl, a 30-second advertisement cost about $3 million.

True

Each year, Fortune publishes strategy-evaluation research on both the United States and other countries.

True

Editorial content and advertising content are increasingly being mixed on blogs.

True

Established companies are coming to realize that their next generation of potential customers spends more time online than watching TV.

True

Excess specificity can stifle creativity in the formulation of an acceptable mission or purpose.

True

Exchanging members of conflicting parties so each can gain an appreciation of the other's point of view exemplifies a confrontation approach.

True

External audits attempt to identify key variables that offer actionable responses.

True

Firms are often motivated to initiate international operations because competitors in foreign markets may not exist, or competition may be less intense than in domestic markets.

True

Firms can be more proactive with strategic management.

True

Firms with planning systems more closely resembling strategic-management theory generally exhibit superior long-term financial performance relative to their industry.

True

Firms, like organisms, must be "adept at adapting" or they will not survive.

True

First mover advantages refer to the benefits a firm may achieve by entering a new market or developing a new product or service prior to rival firms.

True

Five major categories of external variables are: 1) economic forces, 2) social, cultural, demographic, and natural environment forces, 3) political, governmental, and legal forces, 4) technological forces and 5) demographic forces.

True

Five major stakeholders that affect pricing decisions are consumers, governments, suppliers, distributors, and competitors.

True

For a resource to be valuable, it must be either rare, hard to imitate, or not easily sustainable

True

For calendar 2013, companies in the S&P 500 are expected to pay at least $300 billion in dividends.

True

For consumers who are price-sensitive, cost leadership emphasizes producing standardized products at a very low per-unit cost.

True

For the strategic planning process to be effective, organizations must continually strengthen the "good ethics is good business" policy.

True

Forecasts are educated assumptions about future trends and events.

True

Formulation, implementation, and evaluation of strategy activities occur at three hierarchical levels in a large organization: corporate, divisional or strategic business unit, and functional.

True

Forward integration strategy is especially effective when the availability of quality distributors is so limited as to offer a competitive advantage to those firms that integrate forward.

True

Four common approaches to determine R&D budget allocations are: 1) finance as many project proposals as possible; 2) use a percentage-of-sales method; 3) budget for R&D about what competitors spend; or 4) decide how many successful new products are needed and work backwards to estimate the required R&D investment.

True

Franchising is an effective means of implementing forward integration.

True

Future shock occurs when the nature, type, and speed of changes overpower an individual's or organization's ability and capacity to adapt.

True

Gaining ownership or increased control over distributors or retailers is called forward integration strategy.

True

Geographic distance and cultural differences are two of the factors that can make communication between domestic headquarters and overseas operations difficult.

True

Good intuitive judgment is always needed to determine appropriate weights and ratings in the input stage matrices.

True

Having a clear mission and vision can provide a basis for a company's internal and external assessment.

True

Having no temporal qualities, the BCG Matrix is a snapshot of an organization at a given point in time.

True

Hiring top executives from rival firms is a way companies obtain competitive intelligence.

True

Horizontal integration is seeking ownership or increased control over competitors.

True

In China, business relations revolve around guanxi, or personal relations.

True

In China, one should eat heartily to demonstrate enjoyment of the food.

True

In a BCG Matrix the pie slice indicates the proportion of corporate profits generated by that division.

True

In a turbulent, high-velocity market, a lead-change strategy is best whenever the firm has the resources to pursue this approach.

True

In an EFE Matrix, opportunities often receive higher weights than threats, but threats too can receive high weights if they are especially severe or threatening.

True

In developing an organizational chart, avoid having a particular person reporting to more than one person above them in the chain of command.

True

In general, the Internet makes market segmentation easier.

True

In low earning periods, too much debt in the capital structure of an organization can endanger stockholders' returns and jeopardize company survival.

True

In multidivisional organizations, each division should develop a mission statement consistent with and supportive of the corporate mission.

True

In order for a firm to achieve sustained competitive advantage, a firm must continually adapt to changes in external trends and events and effectively formulate, implement, and evaluate strategies that capitalize upon those factors.

True

In order to motivate a workforce effectively, both profit and vision are needed.

True

In practice, critical technology decisions are too often delegated to lower organizational levels or are made without an understanding of their strategic implications.

True

In socialist countries such as France or Belgium, the only grounds for immediate dismissal from work is a criminal offense.

True

In the face of a deepening global recession, countries worldwide are resorting to protectionism to safeguard their own industries.

True

In the three Nordic countries of Denmark, Sweden, and Finland about 70 percent of all employees are in unions.

True

In today's global climate, many companies may find it difficult to survive by relying solely on domestic markets.

True

Increased efficiency, quality, productivity, and job satisfaction can come from cross-training workers.

True

India is increasing tariffs on foreign steel.

True

Individuals who own stock in a corporation are considered stakeholders.

True

Industry analysis is also referred to as external strategic management audit.

True

Internal R&D and contract R&D are the two basic forms of R&D in organizations.

True

Intuitive judgments are almost always involved in deriving quantitative criteria.

True

Investors are now looking closely at Africa in the wake of low interest rates and slow growth elsewhere on the planet.

True

It is always easier to say you are going to do something (strategy formulation) than to actually do it (strategy implementation).

True

It is generally not recommended for companies with less than $10 million in sales to go public.

True

Language, culture, and value systems differ among countries, which can create barriers to communication and problems managing people.

True

Laser eye surgery would be considered a substitute product for eyeglasses and contact lenses.

True

Liquidation is often appropriate when retrenchment and divestiture have failed.

True

Long-term objectives represent the results expected from pursuing certain strategies.

True

Low-performing firms typically underestimate their competitor's strengths and overestimate their own firm's strengths.

True

Major competitors' strengths may represent key threats.

True

Making many intuitive decisions that conflict with the formal plan is one pitfall to avoid in strategic planning.

True

Market development includes introducing present products into new geographic areas.

True

Market penetration can be classified as either a conservative, aggressive, or competitive strategy.

True

Market penetration, market development, and product development are intensive strategies.

True

Marketing research is the systematic gathering, recording and analyzing, of data about problems relating to the marketing of goods and services.

True

Measuring organizational performance includes comparing expected results to actual results, investigating deviations from plans, evaluating individual performance, and examining progress being made toward meeting stated objectives.

True

Medium-sized firms tend to be divisionally structured, whereas large firms tend to use an SBU (strategic business unit) or matrix structure.

True

Mission statements are sometimes difficult to derive because top management may disagree over company objectives.

True

Most companies favor related diversification strategies in order to exploit common use of a well-known brand name.

True

Most large companies have abandoned the functional structure in favor of decentralization.

True

Most strategists believe that an organization's well-being depends on evaluation of the strategic-management process.

True

Motivation is one explanation why some people work hard and others do not.

True

Multidimensional scaling involves examining three or more criteria simultaneously in a product-positioning analysis.

True

Objectives provide direction and allow for organizational synergy.

True

Objectives should be measurable, challenging, reasonable, consistent, and clear.

True

One R&D strategy is to be an innovative imitator of successful products.

True

One aspect of ads in a recession is that they generally take more direct aim at competitors

True

One aspect of the global challenge faced by U.S. business involves the complications of having to deal with two or more monetary systems.

True

One benefit of having a clear mission and vision is that it projects a sense of worth and intent to all stakeholders.

True

One of the benefits of having a clear mission and vision is promoting a sense of shared expectations among all managers and employees.

True

One of the dangers of remaining a local competitor is that more aggressive companies will use their global growth to capture economies of scale and learning.

True

One of the fundamental strategy evaluation activities is reviewing external and internal factors that are the basis for current strategies.

True

One of the steps of the SWOT Matrix is to list the firm's key external opportunities.

True

One of the ways in which the Internet has transferred power from businesses to individuals is by making comparison-shopping quick and easy.

True

Organizations that conduct business operations across national borders are called international firms or multinational corporations.

True

People's anxieties are raised with the thought of change because they fear economic loss, inconvenience, uncertainty, and a break in normal social patterns.

True

Perhaps the greatest advantage of international operations to a firm is the ability to gain new customers for its products and services, thus increasing revenues.

True

Policies refer to specific guidelines, methods, procedures, rules, forms, and administrative practices established to support and encourage work toward stated goals.

True

Political forecasts can be the most important part of an external audit for firms that depend heavily on government contracts.

True

Political issues and stances do matter for business, especially in today's world of instant tweeting and e-mailing.

True

Product development is a strategy that seeks increased sales by improving or modifying present products or services.

True

Product development is an appropriate strategy when an organization has successful products that are in the maturity stage of the product life cycle.

True

Protectionism refers to countries imposing tariffs, taxes, and regulations on firms outside the country to favor their own companies and people.

True

Public enterprises generally cannot diversify into unrelated businesses or merge with other firms.

True

Quantitative forecasts become less accurate as historical relationships become less stable.

True

R&D policies can enhance strategy implementation efforts to emphasize product or process improvements.

True

Recruitment, promotion, and mentoring are ways to alter an organization's culture.

True

Segmentation often reveals that large, random fluctuations in demand actually consist of several small, predictable, and manageable patterns.

True

Selling a division or part of an organization is called divestiture.

True

Shifting focus from specific issues to more general ones may increase strategists' options for gaining organizational commitment.

True

Shifts in the nature and location of production systems, especially to China and India, are reducing the response time to changing market conditions.

True

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

Stakeholders both affect and are affected by an organization's strategic decisions.

True

Stars, Question Marks, Cash Cows, and Dogs are the four quadrants exhibited by the BCG Matrix.

True

Strategic management is an attempt to organize qualitative and quantitative information in a way that allows effective decisions to be made under conditions of uncertainty.

True

Strategic objectives include larger market share, quicker on-time delivery than rivals, shorter design-to-market times than rivals, lower costs than rivals, and wider geographic coverage than rivals.

True

Strategic-management must be a self-reflective learning process that familiarizes managers and employees in the organization with key strategic issues and feasible alternatives for resolving those issues.

True

Strategies may be inconsistent if policy problems and issues continue to be brought to the top for resolution.

True

Strategists are usually found in higher levels of management and have considerable authority for decision-making in the firm.

True

Strategists in multinational corporations are often confronted with the need to be globally competitive and nationally responsive at the same time.

True

Strategy formulation requires coordination among a few individuals, but strategy implementation requires coordination among many.

True

Strategy implementation is often considered to be the most difficult stage in the strategic-management process because it requires personal discipline, commitment, and sacrifice.

True

Strategy-evaluation activities must be meaningful, that is, they should specifically relate to a firm's objectives.

True

Strengths, weaknesses, opportunities, cost and threats should continually be monitored for change because it is not really a question of whether these factors will change, but rather when they will change and in what ways.

True

Strengths-opportunities strategies are based on using a firm's internal strengths to take advantage of external opportunities.

True

Taking corrective actions does not necessarily mean that existing strategies will be abandoned, or even that new strategies must be formulated.

True

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

True

The Balanced Scorecard approach deals with the question, "How satisfied are the firm's customers?"

True

The IE Matrix can be divided into three major regions that have different strategy implications: grow and build, hold and maintain, and harvest or divest.

True

The Internal Factor Evaluation Matrix should use a total of 20 internal factors.

True

The Internet is changing the very nature of many industries by altering product life cycles and changing the historical trade-off between production standardization and flexibility.

True

The RBV theory asserts that it is advantageous for a firm to pursue a strategy that is not currently being implemented by any competing firm.

True

The SP and CP dimension variables in a SPACE Matrix are assigned a numerical value ranging from -1 (best) to -7 (worst).

True

The Sarbanes-Oxley Act put an end to the "country-club" atmosphere of most boards and has shifted power from CEOs to directors.

True

The Strengths-Weaknesses-Opportunities-Threats (SWOT) Matrix, the Strategic Position and Action Evaluation (SPACE) Matrix, the Boston Consulting Group (BCG) Matrix, the Internal-External (IE) Matrix, and the Grand Strategy Matrix are included in stage two of the strategy-formulation framework.

True

The United States is getting older and less white.

True

The United States leads the world in promoting women and minorities into mid- and top-level managerial positions in business.

True

The acquisition of human-resources software and consulting services company Kenexa by IBM is an example of related diversification.

True

The availability, depth, and reliability of economic and marketing information in different countries vary extensively.

True

The bargaining power of consumers can be the most important force impacting competitive advantage.

True

The basic premise of the research-based view is that the mix, type, amount, and nature of a firm's internal resources should be considered first and foremost in devising strategies that can lead to sustainable competitive advantage.

True

The cash account is used as the plug figure in projected balance sheets.

True

The firm should pursue aggressive strategies if the coordinates of a SPACE directional vector are (+5, +4).

True

The firm should pursue conservative strategies if the coordinates of a SPACE directional vector are (-1, +4).

True

The foundation for development of a comprehensive mission statement is provided by a clear vision.

True

The heart of an information system is a database containing the kinds of records and data important to managers.

True

The idea that paying dividends results in a higher stock price is a myth.

True

The most dramatic new market-segmentation strategy is the targeting of regional tastes.

True

The nonprofit sector is America's largest employer.

True

The only certain thing about the future of any organization is change.

True

The percentage-of-sales method should be used for projecting the cost of goods sold and the expense items in the income statements.

True

The practice of a firm borrowing money to fund dividend payouts to itself is known as dividend recapitalization.

True

The process of performing an internal audit, compared to the external audit, provides more opportunity for participants to understand how their jobs, departments and divisions fit into the whole organization.

True

The process of strategic management is facilitated immensely in firms that have an effective information system.

True

The purpose of matching key factors is to generate feasible alternative strategies.

True

The purpose of organizing is to achieve coordinated effort by defining task and authority relationships.

True

U.S. households are making more and more purchases online.

True

Union Pacific's mission statement focuses on transportation rather than on railroads because good mission statements identify the utility of a firm's products to its customers.

True

Unlike strategy formulation, strategy implementation varies considerably among different types and sizes of organizations.

True

Unrelated diversification is an appropriate strategy when an organization's present channels of distribution can be used to market the new products to current customers.

True

Walgreens and CVS pharmacies are located generally across the street from each other and battle each other every day on price and customer service.

True

When an acquisition or merger is not desired by both parties, it can be called a takeover or hostile takeover.

True

When attachments to a culture are severed in an organization's attempt to change direction, employees and managers often experience deep feelings of grief.

True

When developing a vision statement, input should be received from as many managers as possible.

True

When measuring organizational performance, you need to compare expected results to actual results.

True

When the rational type change strategy is successful, strategy implementation can be relatively easy.

True

Whenever two firms merge, it becomes especially important to evaluate and consider culture-strategies linkages.

True

While there are a few U.S. industries that are not yet greatly challenged by foreign competitors, many products and components within these industries too are now manufactured in foreign countries.

True

White knight is a term that refers to a firm that agrees to acquire another firm when the other firm is facing a hostile takeover by some company.

True

Wild guesses should never be part of the planning process.

True

Wisconsin recently passed a law eliminating most collective-bargaining rights for the state's public-employee unions.

True

With a divisional structure by customer, an organization can effectively cater to the requirements of clearly defined customer groups.

True

With information technology, in some cases it is possible to do away with the workplace by allowing employees to work at home or anywhere, anytime.

True

With market segmentation, a firm can better operate with limited resources.

True

Without reasonable assumptions, the strategy-formulation process could not proceed effectively.

True

Although there are many marketing variables that impact the success or failure of strategy-implementation efforts, two variables are central to the process. What are these variables? Discuss why they are so important.

Two variables of central importance to strategy implementation are market segmentation and product positioning. Segmentation is important because it is a key to matching supply and demand, which is one of the thorniest problems in customer service. Segmentation often reveals that large, random fluctuations in demand actually consist of several small, predictable and manageable patterns. Product positioning is important because it is a severe mistake to assume the firm knows what customers want and expect. Many firms have become successful by filling the gap between what customers and producers see as good service. What the customer believes is good service is paramount, not what the producer believes service should be. Positioning entails developing schematic representations that reflect how a firm's products or services compare to competitors' on dimensions most important to success in the industry.

Discuss union membership across Europe.

Union membership in Europe ranges from 74 percent of employees in Finland to 8 percent in France. Percentage of membership is not the only indicator of strength, though. In France, for example, unions have repeatedly shown that despite low membership, they are able to mobilize workers in mass strikes and demonstrations to great effect. The average level of union membership in the EU, weighted by the numbers employed in the different member states, is 23 percent compared to about 11 percent in the USA. High rates of union membership in Nordic countries reflect an approach that sees union membership as a natural part of employment. The level of union membership is trending downward all over Europe. Only 8 of the 27 EU states plus Norway have seen a gain in union members among the employed in recent years, and this growth has not kept pace with the growth in employment, so union density has actually drifted downward. The two exceptions are Ireland and Italy, where union membership is slowly growing.

There are three major approaches for managing and resolving conflict in an organization. Define these three approaches and give an example of each.

Various approaches for managing and resolving conflict can be classified into three categories: avoidance, defusion, and confrontation. Avoidance includes such actions as ignoring the problem in hopes the conflict will resolve itself, or physically separating the conflicting individuals. Defusion can include playing down differences between conflicting parties while accentuating similarities and common interests, compromising so there is neither a clear winner nor loser, resorting to majority rule, appealing to a higher authority, or redesigning present positions. Confrontation is exemplified by exchanging members of conflicting parties so each can gain an appreciation of the other's point of view, or holding a meeting at which conflicting parties present their views and work through their differences. Student answers will vary on the examples given for each approach.

Discuss how work life/home life balance is being addressed by organizations.

Work/family strategies have become so popular among companies today that the strategies now represent a competitive advantage for those firms that offer such benefits as elder care assistance, flexible scheduling, job sharing, adoption benefits, an on-site summer camp, employee help lines, pet care, and even lawn service referrals. New corporate titles such as work and life coordinator and director of diversity are becoming common. A corporate objective to become more lean and mean must today include consideration for the fact that a good home life contributes immensely to a good work life. The work/family issue is no longer just a women's issue. Some organizations offer family days, when family members are invited to the workplace and given a chance to see what other family members do each day. Flexible working hours are another human resource response to the need for individuals to balance work life and home life.

Why should companies have policies addressing workplace romance?

Workplace romance between two consenting employees simply happens, so the question is generally not whether to allow the practice, or even how to prevent it, but rather how best to manage the phenomena. Organizations should establish guidelines or policies that address workplace romance for at least 6 reasons: 1) Guidelines can enable the firm to better defend itself against and avoid sexual harassment or discrimination charges; 2) Guidelines can specify reasons why workplace romance may not be a good idea; 3) Guidelines can specify resultant penalties for romancing partners if problems arise; 4) Guidelines can promote a professional and fair work atmosphere; 5) Guidelines can help assure compliance with federal, state, and local laws and recent court cases; 6) Lack of any guidelines sends a lackadaisical message throughout the firm.

A recent Wall Street Journal article reported that 80 percent of all firms sampled had no restrictions on relationships between a supervisor and a subordinate.

false

According to a study by the Institute of Business Ethics, companies that do not display ethical conduct consistently outperform companies that show a clear commitment to ethical conduct.

false

After decades of debate and struggle, firms have finally definitively determined the appropriate social policies.

false

Alternative strategies not selected for implementation should be discarded, as they have a tendency to contaminate the contingency plans.

false

Bad ethics can derail all but the best strategic plans.

false

CEOs and business owners should delegate the responsibility for ensuring that high ethical principles are espoused and practiced in an organization.

false

California is the nation's second-largest producer of solar energy.

false

Corporate social policy should be reaffirmed or changed during strategy implementation.

false

Good ethics is not a prerequisite for good strategic management.

false

Having a code of ethics ensures ethical business behavior.

false

History has proven that the lower the trust and confidence of people in the ethics of an institution or society, the greater its economic strength.

false

IFRS standards comprise 25,000 pages, whereas GAAP standards comprise 5,000 pages.

false

ISO 14001 is a technical standard and as such replaces technical requirements embodied in statutes or regulations.

false

ISO, the world's largest developer of sustainability standards, is legally authorized to enforce their standards.

false

In Europe, romantic relationships at work are frowned upon, and most firms have policies prohibiting the practice.

false

In order to be considered bribery, the gift offered must be either money or a physical item.

false

Increased education and diversity of the workforce at all levels are reasons why the top-down approach should be favored in organizations.

false

It has gotten easier for firms to get away with placing "green" terminology on their products and labels because there are still no legal or generally accepted definitions of terms like "organic," "green," "safe," or "earth-friendly."

false

Like the United States, Japan is eager to rely on large-scale immigration to bolster its workforce.

false

Monitoring departmental and corporate performance regarding ethical issues can cause firms to misalign ethical and strategic decision making.

false

Most firms warn managers and employees that reporting an ethical violation by others, also known as whistle-blowing, could cause them to be discharged.

false

Moving jobs overseas is not considered to be an unethical business practice.

false

Primary responsibility for ensuring ethical behavior rests with middle- and low-level managers, since they are in a position to influence many employees.

false

Public accounting firms usually avoid strategy-evaluation services.

false

Small organizations require a more elaborate and detailed strategy-evaluation system because they are still evolving.

false

Social responsibility refers to actions an organization takes that are legally required to protect or enhance the well-being of living things.

false

Some strategists agree with Ralph Nader, who asserts that organizations have no obligation to do any more for society than is legally required.

false

Strategists should try to cover all bases by planning for all possible contingencies.

false

The U.S. Chamber of Commerce is against the accounting switch from GAAP to IFRS, saying it will cause cross-border commerce to decline.

false

The percentage of persons age 65 or older will reach 20 percent in the United States in 2018.

false

The test of an effective evaluation system is its complexity.

false

There is no country that favors or engages in commercial whaling today.

false

While it is socially responsible to be a good steward of the natural environment, doing so will not enable a firm to gain competitive advantage.

false

Workplace romance and sexual harassment are synonymous.

false

A bribe is a gift bestowed to influence a recipient's conduct.

true

A frequently used tool in strategy evaluation is the audit.

true

A new wave of ethics issues has accentuated the need for strategists to develop a clear code of business ethics.

true

A rising tide of consciousness about the importance of business ethics is sweeping the United States and the rest of the world.

true

According to the Convention on the International Trade in Endangered Species (CITES), more than 25,000 elephants are killed each year for their ivory—even though international trade in ivory has been outlawed since 1989.

true

Adequate and timely feedback is important to effective strategy evaluation.

true

Avon Products is being investigated for bribery charges related to their winning the first direct-sales license awarded by China to a foreign company.

true

Believing it will make it easier for investors to compare firms across countries and make it easier to raise capital globally, most large accounting firms and multinational firms favor the switch to IFRS.

true

Business ethics can be defined as principles of conduct within organizations that guide decision making and behavior.

true

Companies such as Walmart are now monitoring not only the prices its vendors offer for products, but also how those products are made in terms of environmental practices, as well as safety and infrastructure soundness.

true

Contingency plans are alternative plans that can be put into effect if certain key events do not occur as expected.

true

Corporate social policy should be designed and articulated during strategy formulation.

true

Dumping banned or flawed products in foreign markets is considered to be an unethical business practice.

true

European firms are increasingly adopting explicit, American-style sexual harassment laws.

true

Evaluating strategies on a continuous rather than on a periodic basis allows benchmarks of progress to be established and more effectively monitored.

true

Identifying both good and bad events that could jeopardize strategies is the first step of effective contingency planning.

true

In 2012, Chinese firms dominated Fortune magazine's list of the least admired companies from a social responsibility perspective.

true

In 2012, GDF Suez, Marquard & Bahls, and RWE were the three most admired socially responsible companies according to Fortune magazine.

true

In some foreign countries, paying bribes and kickbacks is acceptable.

true

Integrating ethical decision making into the performance appraisal process is one way that firms can align ethical and strategic decision making.

true

Japan is providing incentives for its elderly to work until ages 65-75.

true

More and more firms believe that ethics training and an ethics culture create strategic advantage.

true

Most executives believe that some strategic information should remain confidential to top managers.

true

New Jersey's goal is to obtain 3 percent of its electricity from the sun and 12 percent from offshore wind by 2020.

true

Orphan drugs offer pharmaceutical companies no economic incentive for profitable development and distribution.

true

Periodic ethics workshops can help sensitize people to workplace circumstances in which ethics issues may arise.

true

Ralph Nader believes that big firms like ExxonMobil, which has more assets than most countries, have an obligation to help society cure its many ills.

true

Social policy concerns what responsibilities the firm has to employees, consumers, environmentalists, minorities, communities, shareholders, and other groups.

true

Some of the largest payouts for class-action legal fraud suits ever were against Enron ($7.16 billion) and WorldCom ($6.16 billion).

true

Some ways in which firm's are working to be more environmentally responsible include using solar power and selling organic and environmentally friendly products.

true

Sustainability refers to the extent that an organization's operations and actions protect, mend, and preserve rather than harm or destroy the natural environment.

true

Sustainability reports reveal how a firm's operations impact the natural environment.

true

The EEOC recovers about $500 million on behalf of office romance victims.

true

The ISO 14000 family of standards concerns the extent to which a firm minimizes harmful effects on the environment caused by its activities and continually monitors and improves its own environmental performance.

true

The U.S. Chamber of Commerce supports the change from GAAP to IFRS, saying it will help the U.S. compete in the world economy.

true

The U.S. furniture manufacturing industry is not yet greatly challenged by foreign competitors.

true

The accounting switch from GAAP to IFRS in the U.S. is going to cost businesses millions of dollars in fees and upgraded software systems and training.

true

The first social responsibility of any business must be to make enough profit to cover the costs of the future because if this is not achieved, no other social responsibility can be met.

true

The percentage of persons age 65 or older exceeds 20 percent in Japan, Italy, and Germany.

true

There is no one ideal strategy-evaluation system for all organizations.

true

Timely approximate information is generally more desirable as a basis for strategy evaluation than accurate information that does not depict the present.

true

Whistle-blowing refers to policies that require employees to report any unethical violations they discover or see in the firm.

true