STUDY GUIDE 6-11
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
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
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
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
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
Which state generates the greatest number of megawatts of wind power? A) Texas B) Iowa C) California D) Minnesota E) New Jersey
A
A benefit of using projected balance sheets and income statements is that A) an organization can compute projected financial ratios under various scenarios. 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
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
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
General Electric achieved $20 billion in sales in 2011 in eco-friendly technologies including all of the following EXCEPT A) agricultural silicon that cuts the amount of water used in spraying fields. B) software that provides centralized control over power consumption. C) cleaner coal-fired power plants. D) a diesel-and-electric hybrid locomotive. E) agricultural silicon that cuts the amount of pesticide used in spraying fields.
B
High corporate tax rates ________. A) encourage investment in new factories B) provide strong incentives to avoid and evade taxes C) attract foreign investors D) makes a nation a desirable location for investment E) have been a growing trend since the 1980s
B
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
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
A firm uses information technology to break down functional barriers and create a work system based on business processes, products, or outputs rather than on functions or inputs in A) restructuring. B) benchmarking. C) reengineering. D) rightsizing. E) delayering.
C
If an initial stock issuance is at or under $1 million, what is the average total cost paid to lawyers, accountants and underwriters? A) 5 percent B) 10 percent C) 25 percent D) 50 percent E) 40 percent
C
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
Which of the following variables are NOT directly affected by market segmentation? A) Product B) Place C) Process D) Promotion E) Price
C
A code of business ethics is A) a document that provides behavioral guidelines that cover daily activities and decisions within an organization. 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
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
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
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
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
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
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
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
Controls need to be ________ rather than ________. A) action-oriented; information-oriented B) cultural; political C) qualitative; quantitative D) measurable; timely E) universal; diverse
A
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
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
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
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
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
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
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
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
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
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
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
In the low earnings period, 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
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
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
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
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
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
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
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
Proponents of the top-down approach contend that ________ are the only persons in the firm with the collective experience, acumen, and fiduciary responsibility to make key strategy decisions. A) top executives B) divisional managers C) middle-level managers D) lower-level managers E) non-management employees
A
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
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 EMS.
A
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
The U.S. Justice Department is ________ bribery. A) increasing its prosecutions of B) relaxing its opposition to and regulations against C) employing a "don't ask, don't tell" philosophy toward D) indifferent to E) accepting of different cultural attitudes toward
A
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 American companies desiring to do business internationally. E) discourages foreign companies from doing business in the United States.
A
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
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 spending less in total research and development expenditures. E) Firms are less involved with research consortia than ever.
A
The company Better Place A) is building a network of 250,000 electric car recharging stations. B) is donating $2.4 billion in funding for electric car manufacturing. C) is developing electric plug-in vehicles. D) recently unveiled the country's first all-electric vehicle for the mass market. E) is buying 25,000 electric vehicles between 2011 and 2015 to use in its fleet-services business.
A
The percentage of persons age 65 or older exceeds 20 percent in Japan, Italy, and A) Germany. B) the United States. C) France. D) China. E) all of the above
A
The strategy-evaluation process should foster A) mutual understanding. B) doubt. C) corporate culture. D) complexity. E) division.
A
Today, boards of directors are composed mostly of A) outsiders. B) management. C) union members. D) company employees. E) company stockholders.
A
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
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
Wal-Mart 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
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
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
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
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) Positioning B) Segmentation C) Penetration D) Diversification E) Budgeting
A
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
What is the most common type of financial budget? A) Cash B) Sales C) Profits D) Factory E) Flexible
A
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
What percent of the world's population lives in the United States? A) 5 B) 10 C) 15 D) 85 E) 95
A
What percent of the world's population lives outside the United States? A) 55 B) 65 C) 75 D) 85 E) 95
A
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) Accounting
A
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
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
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
Which item is NOT included in net worth? A) Fixed assets B) Common stock C) Additional paid-in-capital D) Retained earnings E) All of these are included in net worth.
A
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
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
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
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
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
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
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
_______ 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
_______ 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
________ 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
________ 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
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
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 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
According to Rumelt, the final broad test of strategy is its A) advantage. B) feasibility. C) consonance. D) consistency. E) distinctiveness.
B
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
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
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
Changes in the organization's management, marketing, finance/accounting, production/operations, R&D, and MIS strengths and weaknesses should be the focus of a revised A) mission. B) IFE matrix. C) vision. D) EFE matrix. E) EPM matrix.
B
Competitive advantage normally is the result of superiority in resources, skills, and A) employees. B) position. C) consistency. D) feasibility. E) governance.
B
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
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
Exports of goods and services from the U.S. were valued at $1.6 trillion in 2009, which accounted for ________ percent of the U.S. gross domestic product. A) 5 B) 11 C) 25 D) 31 E) 51
B
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
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
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
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
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
International financial reporting standards (IFRS) comprise approximately ________ pages. A) 1,000 B) 5,000 C) 10,000 D) 25,000 E) 100,000
B
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
President Obama recently said, "________ progress in just two decades is one of the most stunning achievements in human history." A) the Philippines' B) India's C) Taiwan's D) Brazil's E) China's
B
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
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
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
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
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
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; simplistic
B
The valuation of a firm's worth 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. E) is static.
B
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
B
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
Under the U.S. Dodd-Frank Act, employees are encouraged to report possible acts of bribery and are awarded ________ percent of any financial sanctions against companies. A) 5-10 B) 10-30 C) 25-30 D) 30-40 E) 40-60
B
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
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
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
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 tax analysis C) Gross profit analysis D) Capital asset pricing model E) Present value analysis
B
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
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
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
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
What type of strategy would divestiture be classified as? A) Aggressive B) Defensive C) Competitive D) Offensive E) Conservative
B
Which is NOT a required step in product positioning? 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
Which of the following is NOT a reason why some firms prefer to conduct strategic-planning in secret? A) Dissemination of a firm's strategies may translate into competitive intelligence for rival firms. B) It enhances understanding, commitment and communication within the firm. C) It limits criticism, second-guessing, and hindsight. D) Participants in a visible strategy process become more attractive to rival firms, who may lure them away. E) Secrecy limits rival firms from imitating or duplicating the firm's strategies.
B
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
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
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
Which of the following nations has the highest corporate tax rate? A) Ireland B) The United States C) Great Britain D) France E) Germany
B
Which of these is NOT a key financial ratio? A) Market share B) Production quality C) Earnings per share D) Asset growth E) Return on equity
B
Which pay strategy is NOT a form of incentive compensation? A) Bonus system B) Hourly wage C) Gain sharing D) Profit sharing E) All of the above are forms of incentive compensation.
B
Which stage of the strategy-formulation framework contains the Internal-Factor Evaluation Matrix? A) Input stage B) Analysis stage C) Matching stage D) Decision stage E) Output stage
B
Which strategies aim at improving internal weaknesses by taking advantage of external opportunities? A) SO B) WO C) SW D) ST E) WT
B
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
________ 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
________ 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
________ is the fastest-growing market for pocket book maker Coach and the second-largest market for Dell. A) America B) China C) Brazil D) Japan E) Mexico
B
) Looking for a vacant niche helps a company determine A) its advertising budget. B) the size of the marketing department. C) the best place to position a product. D) the best place to locate a new facility. E) its projected R&D expenditures.
C
) 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
A highly ethical company that does an excellent job on social responsibility and environmental sustainability issues, GM spent ________ million in the last quarter of 2010 to give its U.S. union employees profit-sharing payments. A) $42 B) $135 C) $200 D) $339 E) $500
C
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
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
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
All of the following are things that many cultures around the world value more than the competitiveness that is so important in the U.S. EXCEPT A) modesty B) team spirit C) individualism D) collectivity E) patience
C
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
Conflict in an organization is A) always bad. B) always good. C) not always bad. D) a sign of bankruptcy. E) completely avoidable.
C
Establishing objectives is a A) top-level activity. B) centralized activity. C) decentralized activity. D) centralized-decentralized activity. E) command-and-control activity.
C
For what reason did Boeing fire CEO Harry Stonecipher? A) Poor company performance B) Enforcing discriminatory hiring practices C) Having an extramarital affair D) Stealing from the company E) Exorbitant use of company planes
C
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
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
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
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
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
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
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) profit; social
C
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
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
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 process to local raw materials
C
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
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
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
Under the Hawaii Clean Energy Initiative, the state intends to cut its dependence on oil to ________ percent by 2030. A) 10 B) 20 C) 30 D) 40 E) 50
C
Venture capital investments in clean technology companies are ________. A) increasingly rare B) down slightly C) increasing dramatically D) stable E) a conflict of interest
C
What action involves reconfiguring or redesigning work, jobs, and processes for the purpose of improving costs, quality, service, and speed? A) Restructuring B) Downsizing C) Reengineering D) Delayering E) Benchmarking
C
What change strategy involves giving orders and enforcing those orders? A) Self-interest B) Educative C) Force D) Rational E) Defusion
C
What is a drawback of using only equity to raise capital? A) The cost B) Fluctuations in the stock market C) Dilution of the control of the company D) That it will cause EPS to roller coaster E) That it doesn't raise as much capital as debt financing
C
What is the most complex form of organizational structure? A) Divisional B) SBU C) Matrix D) Functional E) Geographic
C
What tactic involves shifting focus from specific issues to more general ones? A) Equifinality B) Focus on Higher-Order Issues C) Generalization D) Satisfying E) None of the above
C
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
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
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
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
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
Which of these is a limitation of QSPM? A) Only a few strategies can be evaluated simultaneously. B) It is prohibitively expensive. C) It requires intuitive judgments and educated assumptions. D) Sets of strategies must be examined in reverse order. E) It requires equal participation from the entire organization.
C
Which of these is the most common type of budgeting time frame? A) Daily B) Quarterly C) Annual D) Every decade E) Monthly
C
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
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
Which organizational structure is the most widely used? A) Departmental B) Strategic business unit C) Functional D) Decentralized E) Matrix
C
Which phrase would most likely be incorporated into written objective statements? A) Maximize B) Minimize C) 10% increase D) Adequate E) All of the above
C
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
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
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
________ 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
________ 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
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
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
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
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
All of the following are principles of good organizational governance, as established by Business Week, 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, excluding stock options. D) At least three directors are current or former company executives. E) The CEO is not also the Chairperson of the Board.
D
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 decreasing difficulty of predicting the future with accuracy E) the rapid rate of obsolescence of even the best plans
D
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
All of these are Richard Rumelt's criteria to evaluate a strategy EXCEPT A) advantage B) consistency C) feasibility D) distinctiveness E) consonance
D
Approximately how many people in the United States are now part of two-career families? A) 2 million B) 8 million C) 21 million D) 60 million E) 85 million
D
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
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
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
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
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 nearly 70 percent
D
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
In 2012, how many Fortune 500 have women CEOs ? A) Two B) Five C) Twelve D) Eighteen E) Twenty-four
D
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
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
In which of the following industries is the U.S. NOT yet greatly challenged by foreign competitors? A) auto industry B) electronics C) manufacturing D) retailing E) None of the above
D
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
Japan is suffering from a decline in overall economical 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
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
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
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
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) product positioning. E) market segmentation.
D
Quantitative criteria commonly used to evaluate strategies are A) ash budgets. B) Balanced Scorecards. C) Capital Asset Pricing Models. D) financial ratios. E) present value analyses.
D
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
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
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
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) made too much of; ignored
D
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
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
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
The lowest cost source for precision machinery is A) Japan. B) Sri Lanka. C) Malaysia. D) Europe. E) Mexico.
D
The strategy-evaluation process should A) dominate decisions. B) be complex. C) be cumbersome. D) foster mutual understanding and trust. E) be restrictive.
D
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
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
What activity is defined as having alternative plans that can be put into effect if certain key events do not occur as expected? A) Corporate agility B) Scenario planning C) Strategy evaluation D) Contingency planning E) Forecasting
D
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
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
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
When developing an organizational chart, you should A) recommend dual titles for executives. B) use the title "president" for the top person. 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 the controller or treasurer report directly to the president.
D
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
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
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
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) Use of corporate assets
D
Which of the following is NOT a major approach to R&D? A) To be a pioneer B) To be an innovative imitator C) To be a low-cost producer by mass-producing products similar to but less expensive than products recently introduced D) To be a liquidator E) All of the above are major approaches to R&D.
D
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
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
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
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
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
Which of the following statements is true? A) The pay of the CEO of a Japanese company is about half the pay of the CEO of an American company. B) The CEO of a Japanese company earns more than the CEO of a European company. C) In Japan, individual excellence is emphasized over harmony among managers. D) Seniority rather than performance has been the key factor in determining pay in Japan. E) All of the above
D
Which of the following was among the most admired companies for social responsibility in 2011 according to Fortune magazine? A) Carlsberg B) Asahi Breweries C) Dillard's D) Walt Disney E) Kirin Holdings
D
Which of these is NOT a SPACE Matrix quadrant? A) Aggressive B) Defensive C) Competitive D) Offensive E) Conservative
D
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
Which tactic emphasizes that a successful outcome is more important than imposing the method of achieving it? A) Generalization B) Satisfying C) Focus on higher-order issues D) Equifinality E) Specialization
D
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
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
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
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
_______ 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
________ has 18 buildings in California alone powered only by solar energy. A) Wal-Mart B) Home Depot C) Starbucks D) Target E) Family Dollar Stores
D
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
According to Fortune magazine, which of the following was among the least admired companies for social responsibility in 2011? A) Statoil B) Ferrovial C) General Electric D) Walt Disney E) None of the above
E
According to researchers, all of the following encourage individuals to accept change EXCEPT A) when they have a cognitive understanding of the changes B) when they have a sense of control over the situation C) when they have an awareness that necessary actions are going to be taken to implement change D) when they participate in strategy-evaluation activities E) when the nature, types, and speed of changes overpower their ability and capacity to adapt
E
All of the following are reasons to be completely open with the strategy process EXCEPT A) Managers, employees and other stakeholders can readily contribute to the process. B) Investors, creditors and other stakeholders have greater basis for supporting a firm that is open. C) Visibility promotes democracy whereas secrecy promotes autocracy. D) Participation and openness enhances understanding, commitment and communication within the firm. E) Openness limits rival firms from imitating or duplicating the firm's strategies.
E
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
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
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
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
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
How many cells are in a SWOT Matrix? A) Two B) Four C) Six D) Eight E) Nine
E
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
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
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
Modern organizational realities demand that employees demonstrate greater A) flexibility. B) innovation. C) creativity. D) initiative. E) all of the above
E
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
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
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
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
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 ________ 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
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
The first time U.S. issuers would report under the international financial reporting standards (IFRS) would be approximately _______. A) 2011 or 2012 B) 2012 or 2013 C) 2013 or 2014 D) 2014 or 2015 E) 2015 or 2016
E
The world population that lives outside of the U.S. is growing ________ the U.S. population. A) 25 percent slower than B) 70 percent slower than C) 25 percent faster than D) 70 percent faster than E) at the same rate as
E
What corrective actions might a firm take during strategy evaluation? A) Revising the business mission B) Issuing stock C) Revising objectives D) Selling a division E) All of the above
E
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
E
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
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
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
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
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
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
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
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
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
Which of the following business actions is considered to be unethical? A) 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
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
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 determine the amount of product diversification
E
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
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
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/threats and internal strengths/weaknesses in the left column of the QSPM.
E
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
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
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
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
Which stage in the strategy-formulation framework focuses on generating feasible alternative strategies? A) Input B) Output C) Decision D) Throughput E) Matching
E
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
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
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
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
________ 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 U.S.; Brazil B) Brazil; Japan C) Japan; Brazil D) Brazil; the U.S. E) Japan; the U.S.
E
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
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
Medium-sized firms tend to use which type of structure? A) Divisional B) Matrix C) SBU D) Functional E) Centralized
A
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
Which stage of the strategy-formulation framework includes an Internal-Factor Evaluation Matrix and a Competitive Profile Matrix? A) Input B) Matching C) Decision D) Penetration E) Research
A
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
Restructuring is also referred to as A) reengineering. B) delayering. C) diversifying. D) upsizing. E) integrating.
B
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
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
Which of the following is NOT a typical characteristic of most Japanese managers? A) Reserved B) Quiet C) Distant D) Impulsive E) Introspective
D
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
