Capstone Test 2

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

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

Increase the number of employees

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

Employee Training

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

Organizational Resources

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.

Leverage ratio

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.

$700 billion

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.

Merger

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

Singapore

Where is the largest seaport, in terms of ship container traffic processed annually? A) Hong Kong B) Shanghai C) Singapore D) Los Angeles E) New York

Chapter 9

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

Controlling

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

Average collection period

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

Product development

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

Product development

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

Liquidation

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

Joint Venture

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

Divestiture

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

Top-level management

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

distinctive competencies

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.

Organizational Culture

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.

Ritual

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

Focus - Low Cost

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

Capacity

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

Consolidating

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

Value Chain Analysis

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

Marketing plans

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

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

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?

Symbol

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.

when the advantages of stable prices are not important

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

can be an effective type of retrenchment strategy

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.

Retrenchment

Borders closing 200 of its 488 superstores and laying off 6,000 of its 19,500 employees is an example of A) divestiture. B) backward integration. C) liquidation. D) retrenchment. E) forward integration.

Warehousing

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

Not easily substitutable

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

larger market share

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

Market development

Hawaiian Airlines beginning to offer flights from Hawaii to Seoul, Korea, and Tokyo, Japan, rather than mostly flying to and from the U.S. mainland, is an example of which type of strategy? A) Forward integration B) Backward integration C) Horizontal integration D) Market development E) Product development

Operations

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.

Vertical integration

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

Values

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

All of the above

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

Unrelated Diversification

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

Divestiture

Marriott selling its timeshare business is an example of which type of strategy? A) Related diversification B) Unrelated diversification C) Retrenchment D) Divestiture E) Liquidation

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

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.

take more direct aim at competitors

One aspect of ads in a recession 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

Marketing

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.

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

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.

Liquidation

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.

Customer Analysis

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

Customer Analysis

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

Forward integration

Starbucks reaching a deal with Green Mountain Coffee Roasters for that firm to sell packs of Starbucks Tazo-branded coffee and tea in their brewers is an example of which type of strategy? A) Forward integration B) Backward integration C) Horizontal integration D) Related diversification E) Unrelated diversification

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

Chapter 12

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

Constructed for each division

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

Pricing

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

Investment

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

Establish performance standards

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.

Chapter 7

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.

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

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.

Value chain analysis

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.

20

Today McDonald's owns about _______ percent of its 32,800 restaurants. A) 20 B) 30 C) 40 D) 50 E) 60

Unrelated Diversification

Tyson Foods opening a manufacturing plan that makes diesel and jet fuel from chicken fat, beef tallow, and leftover food grease from the firm's meat-processing plants is an example of A) backward integration. B) divestiture. C) retrenchment. D) unrelated diversification. E) forward integration.

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

Under which condition would a cost leadership strategy be especially effective? A) when there are many ways to differentiate the product or service and many buyers perceive these differences as having value B) when buyer needs and uses are diverse C) when few rival firms are following a similar approach D) when technological change is fast paced and competition revolves around rapidly evolving product features E) when the products of rival sellers are essentially identical and supplies are readily available from any of several eager sellers

Profitability

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

A turnaround strategy

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

Product/service planning

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

A joint venture

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

Managing by crisis

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

Managing by subjectives

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

Horizontal integration

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

Market development

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.

Department managers

Which of the following is most likely NOT included in the functional level of a small company? A) Finance B) Marketing C) R&D D) Department managers E) Human resource managers

Identifying the organization's strengths and weaknesses

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) Identifying the organization's strengths and weaknesses D) Identifying the organization's functions of business E) Assigning a weight to each factor

Motivating

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

Emotions

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

Financing

Which of the three finance/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

Backward integration

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

Times-interest-earned ratio

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

Data; information

________ 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

Customer Profiling

________ 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

Financial ratio analysis

________ 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

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 the 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

Production/operations

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

Information

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

A lack of strategic-management knowledge

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

Stockholder Equity

All of the following are listed among the "softer" factors in the Balanced Scorecard EXCEPT A) customer service B) employee morale C) product quality D) business ethics E) stockholder equity

When new channels of distribution are expensive and unreliable

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 very 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 becoming rapidly global in scope

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

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

Under which condition would a differentiation strategy be especially effective? A) when the target market niche is large, profitable and growing B) when technological change is fast paced and competition revolves around rapidly evolving product features C) when industry leaders do not consider the niche to be crucial to their own success D) when the industry has many different niches and segments, thereby allowing a company to pick a competitively attractive niche suited to its own resources E) when few, if any, other rivals are attempting to specialize in the same target segment

Cost Leadership - Low Cost

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

Forward integration

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

Liquidity

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

Growth

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

Planning

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

Saga

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

Outsourcing

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.

Organizing

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

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

Divisional

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.

Organizing

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

Planning

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

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

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

Does the firm have good liquidity?

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?

Stakeholders from both partners are equally satisfied

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.

Related Diversification

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

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

Related Diversification

Which strategy should an organization use if it competes in a no-growth or a slow-growth industry? A) Divestiture B) Related diversification C) Backward integration D) Unrelated diversification E) Retrenchment

Divestiture

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

Representative managers and employees from throughout the firm

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

Communication

________, 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