BUS 195 (CHAPTER 4)

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?

1,000

During the 2015 Super Bowl, a 30-second advertisement cost over $4 million.

TRUE

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

investment

Which is NOT one of the four common approaches to determine R&D budget allocations?

Use a percentage-of-costs method.

Selling includes all of these marketing activities EXCEPT

Customer Analysis

A standardized set of behaviors used to manage anxieties is called a

ritual.

All of the following are basic functions of marketing EXCEPT

value chain analysis.

Life-directing attitudes that serve as behavioral guidelines are called

values.

All of the following are basic activities of management EXCEPT

Consolidating

Distribution becomes especially important when a firm is striving to implement a product development or diversification.

False

Financial ratio analysis becomes less useful if one goes beyond the actual calculation and interpretation of each individual ratio.

False

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

Financial ratio analysis

What category of ratios measures how effectively a firm can maintain its economic position in the growth of the economy and industry?

Growth

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

TRUE

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

TRUE

According to William King, a task force of managers from different units of the organization should be charged with determining the 20 most important strengths and weaknesses that should influence the future of the organization.

TRUE

Activity ratios measure how effectively a firm is using its resources.

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

Benchmarking is an analytical tool used to determine whether a firm's value chain activities are competitive compared to rivals.

TRUE

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

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

Marketing research is the systematic gathering, recording and analyzing, of data about problems relating to the marketing of goods and services.

TRUE

The Internal Factor Evaluation Matrix should use a total of 20 internal factors.

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 idea that paying dividends results in a higher stock price is a myth.

TRUE

The purpose of organizing is to achieve coordinated effort by defining task and authority relationships.

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

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

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

Times-interest-earned ratio

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

Value Chain Analysis.

________ is a commonly used approach to determine R&D budget allocations.

All of the above

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

FALSE

Financial ratios are not applicable to nonprofit organizations.

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

Most producers today sell their goods directly to consumers.

FALSE

Opportunities are a firm's distinctive competencies that cannot be easily matched or imitated by competitors.

FALSE

Organizing is the cornerstone of effective strategy formulation.

FALSE

Research and Development (R&D) Management is focused on managing inputs, transformations, and outputs that vary across industries and markets.

FALSE

Successful strategy formulation generally rests upon the ability of an organization to sell some product or service.

FALSE

Technology ties all business functions together and provides the basis for all managerial decisions.

FALSE

Test marketing is used more frequently by industrial companies than consumer goods companies.

FALSE

The management function of organizing is included in human resource management.

FALSE

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

FALSE

While interesting, organizational culture does not significantly affect business decisions.

FALSE

What category of ratios measures a firm's ability to meet its short-term obligations?

Liquidity

Which function of management is concerned with span of control and chain of command?

Organizing

What is the essential bridge between the present and the future that increases the likelihood of achieving desired results?

Planning

Which of the following does the text call an up-front investment in success?

Planning

What marketing function includes test marketing?

Product and service planning

________ management deals with inputs, transformations, and outputs that vary across industries and markets.

Production and operations

An effective information management system ________ information in such a way that it answers important operating and strategic questions.

all of the above

Synergy

all of the above

Staffing involves all of these activities EXCEPT

analyzing customers.

The IFE Matrix should be ________ in multidivisional firms.

constructed for each autonomous division

A firm's strengths that cannot be easily matched or imitated by competitors are called

distinctive competencies.

Organizational resources include all of the following EXCEPT

employee training.

Pricing is one of the basic functions of

marketing.

A pattern of behavior developed by an organization as it learns to cope with its problems of external adaptation and internal integration, and that has worked well enough to be considered valid and to be taught to new members as the correct way to perceive, think, and feel is called

organizational culture.

Metaphors are

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

Distribution includes

warehousing.