Chapter 2
When a company has been successful and/or unsuccessful, the question "What is our business?" should be asked.
True
When developing a mission statement, it is usually advisable to involve as few managers as possible.
False
A mission statement can sometimes be called a statement of philosophy.
True
A mission statement, sometimes called a creed statement, can be defined as an "enduring statement of purpose that distinguishes one organization from other similar enterprises."
True
A well-conceived mission statement is the cornerstone of effective strategic management.
True
Which of the following dimensions are not recommended aspects of a mission statement? a. Strategies b. Self-concept c. Concern for employees d. Markets e. Customers
A
A sense of shared expectations among all levels and generations of employees is promoted with a mission statement.
True
According to Campbell and Yeung, the process of developing a mission statement should create an "emotional bond" and "sense of mission" between the organization and its employees.
True
According to King and Cleland, carefully developed and written mission statements ensure unanimity of purpose within the organization.
True
Which group would be classified as a stakeholder? a. Communities b. Banks c. Suppliers d. Employees e. All of these
E
Which European country has the highest growth rate in consumer purchases over the internet? a. Germany b. United Kingdom c. Sweden d. Greece e. Ireland
D
A mission statement is sometimes called all of the following except: a. a statement of intent. b. a statement of purpose. c. a statement of beliefs. d. a creed statement. e. a statement of business principles.
A
Good mission statements identify the ______ of a firm's products to its customers. a. utility b. price c. profit margin d. demand e. popularity
A
In the process of developing a mission statement, it is important to involve a. as few managers as possible. b. as many managers as possible. c. upper-level management only. d. lower-level management only. e. the board of directors only.
B
The largest category for online sales in the United States is: a. books b. travel c. computers d. jewelry e. music
B
The purpose of a mission statement is to declare all of these except: a. a reason for being. b. an annual financial plan. c. a statement of purpose. d. a statement of beliefs. e. whom it wants to serve.
B
Which component of a mission statement addresses the basic beliefs, values, aspirations, and ethical priorities of the firm? a. Technology b. Philosophy c. Concern for public image d. Customers e. Self-concept
B
Which of these examples of a mission statement's focus area is not effective? a. AT&T focuses on communication rather than telephones. b. Exxon/Mobil focuses on oil and gas rather than energy. c. Union Pacific focuses on transportation rather than railroads. d. Universal Studios focuses on entertainment rather than movies. e. Starbucks focuses on the café experience rather than coffee.
B
Effective mission statements can vary in a. length. b. content. c. format. d. specificity e. all of the above
E
A firm's philosophy in a mission addresses the question, "What is the firm's distinctive competence?"
False
Although it is important for companies to have a clearly defined mission statement, research has shown that less than 50% of all companies have used a mission statement in the previous five years.
False
An important question a mission statement should answer is, "What do we want to become?"
False
Environmental changes should not change a mission statement
False
Individual sales over the Internet greatly exceed business-to-business sales over the Internet.
False
It is generally a good idea to use the mission statement as a guide when completing an external and internal analysis.
False
Mission statements should be stated with high level of precision.
False
Social policy should be designed and articulated during the strategy-implementation stage.
False
The first step in the process of developing a mission statement is to ask all participants to prepare what they believe the organization's mission should be.
False
The mission statement should be short—preferably one sentence.
False
The most important time for a company to develop a mission and vision statement is when the company is experiencing financial difficulty.
False
There is no need for a mission statement in small, nonprofit organizations.
False
During the strategy-implementation process, social policy should be set and administered.
True
In order to motivate a workforce effectively, both profit and vision are needed.
True
Mission statements are sometimes difficult to derive because top management may disagree over company objectives.
True
Mission statements provide managers with a unit of direction that transcends individual, parochial and transitory needs by promoting a sense of shared expectations among all levels and generations of employees.
True
Precision might stifle creativity in the formulation of an acceptable mission or purpose.
True
Stakeholders both affect and are affected by an organization's strategic decisions.
True
Vision and mission statements can often be found in the front of annual reports.
True
According to McGinnis, a mission statement should be all of the following except: a. it should be specific enough to control creative growth. b. it should be stated in clear terms. c. it should distinguish an organization from all others. d. it should define what an organization is. e. it should serve as a framework for evaluating both current and prospective activities.
A
All stakeholders: a. have claims and concerns about an organization, but these claims and concerns vary. b. have the same claims and concerns about an organization. c. have ownership rights in an organization. d. have the same voting rights in an organization. e. have environmental concerns as their top priority.
A
If an organization chooses to have both a mission and a vision, the mission statement should be established first.
False
Stakeholders of an organization include stockholders, customers and creditors, but not competitors.
False
The relative attention an organization will devote to meeting the claims of various stakeholders is indicated in a good mission statement.
True
According to Campbell and Yeung, what is/are most likely associated with behavior and the present. a. Mission b. Values c. Long-term objectives d. Vision e. Short-term objectives
A
The mission statement answers which question? a. What is our business? b. How can we improve ourselves? c. What do we want to become? d. Who are our stakeholders? e. How can we increase profitability?
A
What is the first step in the comprehensive strategic-management model? a. Developing vision and mission statements b. Performing external audits c. Performing internal audits d. Measuring and evaluating performance e. Establishing long-term objectives
A
Corporate social policy should be designed and articulated during which phase of strategy development? a. implementation b. formulation c. evaluation d. control e. management
B
The process of developing a vision and mission statement includes which of these as the first activity? a. A request to modify the current document b. Ask managers to read selected articles about mission statements. c. Ask managers to prepare a mission statement for the organization. d. Have a brainstorming session on whether the organization should have a mission statement. e. A merging of several mission statements into one document
B
What is the best time to develop a mission statement? a. before a business is opened b. when the firm is successful c. when the firm is in financial trouble d. when the firm is in legal trouble e. when the firm encounters competition
B
Which statement should be created first and foremost? a. Strategic b. Vision c. Objectives d. Mission e. Competitive advantage
B
As indicated in the strategic-management model, a clear _______ is needed before alternate strategies can be formulated and implemented. a. long-term objective b. short-term objective c. policy d. mission statement e. evaluation strategy
D
What is likely to happen if a mission or vision statement is implemented during troubled times for a firm? a. Employees will ignore the new mission or vision statement. b. Profitability will decline. c. The firm will experience a reverse in the decline of profitability. d. No change e. Managers will be unable to resolve divergent views.
C
In developing a mission statement, arousing emotion a. is not a benefit. b. is the most important goal. c. is important. d. should be avoided if possible. e. is counterproductive.
C
The vision statement answers which question? a. What is our business? b. How can we improve ourselves? c. What do we want to become? d. Who are our stakeholders? e. How can we increase profitability?
C
In regard to its elderly workforce, Japan varies from the United States in that: a. A smaller percentage of Japan's senior citizens work b. Japan does not have laws banning discrimination based on age c. Most Japanese workers retire before 60 d. Japanese citizens are required to retire at 60 e. Japan is phasing in a shift from ages 65 to 60 as the date when a pension can be received
B
The three characteristics of a mission statement are a declaration of attitude, a declaration of social policy and: a. an employee orientation. b. a customer orientation. c. a shareholder orientation. d. an environmental orientation. e. a profit orientation.
B
According to the comprehensive strategic-management model, which step needs to be completed immediately following the establishment of long-term objectives? a. Developing vision and mission statements b. Performing external audits c. Performing internal audits d. Generating, evaluating, and selecting strategies e. Measuring and evaluating performance
D
Effective mission statements a. are usually changed every few months. b. are usually changed every few years. c. never require revision. d. become ineffective in the first year. e. stand the test of time and require little revision.
E
When developing a vision statement, input should be received from as many managers as possible.
True
55. The vision and mission statement can often be found a. in the SEC report. b. in annual reports. c. on customer receipts. d. on supplier invoices. e. on community news bulletins.
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
A study by Rarick and Vitton found that firms with a formalized mission statement have the average return on shareholders' equity compared to those firms without a formalized mission statement. a. one quarter b. half c. twice d. three times e. five times
C
Business Week reports that firms using mission statements have __________ percent higher return on certain financial measures than those without such statements. a. 10 b. 15 c. 30 d. 57 e. 86
C
In 2005, which of the following companies was rated highest for social responsibility? a. IBM b. Hewlett-Packard Company c. Fannie Mae d. Green Mountain Coffee Roasters e. Intel Corporation
C
The ideal length of a vision statement is: a. one page. b. several paragraphs. c. one sentence. d. as long as necessary to convey the message. e. several sentences.
C
Who is referred to as "the father of modern management?" a. Deming b. Peters c. Drucker d. McGinnis e. Smith
C
A businesses mission is the foundation for all of the following except: a. priorities. b. strategies. c. plans. d. employee wage rates. e. work assignments.
D
An effective mission statement is all of the following except: a. It reflects judgments about future growth directions that are based upon forward-looking external and internal analyses. b. It provides useful criteria for selecting among alternative strategies. c. It provides a basis for generating and screening strategic options. d. It is static in orientation. e. It should include options that are considered less promising.
D
King and Cleland recommend organizations carefully develop a written mission statement for all of the following reasons except: a. to provide a basis for allocating organizational resources. b. to establish a general tone or organizational climate. c. to ensure unanimity of purpose within the organization. d. to ensure a command-and-control structure. e. to facilitate the translation of objectives into a work structure involving the assignment of tasks to responsible elements within the organization.
D
The corporate social policy should be reaffirmed or changed during which phase of strategy development? a. strategy implementation b. strategic mission c. strategy formulation d. strategy evaluation e. strategy control
D
The potential for creative growth for the organization can be limited by a. an overemphasis on stakeholders. b. not enough emphasis on stakeholders. c. a mission statement that is too general. d. a mission statement that is too specific. e. a mission statement that is too dynamic.
D
Which of these basic questions should a vision statement answer? a. What is our business? b. Who are our employees? c. Why do we exist? d. What do we want to become? e. Who are our competitors?
D
According to recent studies, what percent of companies have used a mission statement sometime in the past five years? a. 15% b. 30% c. 60% d. 75% e. 90%
E
After a draft mission statement has been developed, it is important to: a. ask managers to read several articles about mission statements as background information. b. vote on the mission statement. c. ask managers to prepare a mission statement for the organization. d. ask managers to seek support for the mission statement from their subordinates. e. provide a request for modifications, additions and deletions to the mission statement.
E
The general public is especially interested in , whereas stockholders are more interested in . a. environmental concerns; social responsibility b. social responsibility; the treatment of employees c. the treatment of employees; environmental concerns d. profitability; social responsibility e. social responsibility; profitability
E
What can be used to promote unbiased views and to manage the development of the mission statement more effectively? a. an internal group b. a committee of managers c. command-and-control d. surveys e. a facilitator
E
What is needed before people can focus on specific strategy formulation activities when developing a mission statement? a. Negotiation b. Compromise c. Eventual agreement d. a and b e. All of the above
E
Which component of a mission statement addresses the firm's distinctive competence or major competitive advantage? a. Technology b. Philosophy c. Concern for public image d. Customers e. Self-concept
E
Which question(s) are answered in an effective mission statement? a. What is the purpose of our organization? b. What is our company philosophy or self-concept? c. What technology will we employ to achieve our objectives? d. Who are the firm's customers? e. All of the above
E
A mission statement is a declaration of an organization's financial status.
False
A mission statement is usually a simple statement of specific beliefs.
False
A mission statement should be broad enough to reconcile differences among an organizations various stakeholders.
False
According to Campbell and Yeung, an organization's vision is associated with behavior and with the present.
False
According to Peter Drucker, asking the question "What is our business?" is synonymous with asking the question "What is our vision?"
False
According to a survey completed in 2005, Proctor & Gamble scored very low in corporate responsibility.
False
According to the Nobel Laureate Milton Friedman, organizations have tremendous social obligations.
False
In Europe, Germany has experienced the greatest annual growth rate in consumer purchases over the Internet.
False
In most cases, several paragraphs are required to effectively state a mission statement.
False
In multidivisional organizations, each division should develop a mission statement independent of the parent company.
False
Social policy should be reaffirmed or changed during strategy implementation.
False
Whereas the mission statement answers the question "What do we want to become?," the vision statement answers the question "What is our business?"
False
A declaration of an organization's "reason for being" is the mission statement.
True
A firms concern for employees in a mission addresses the question, "Is the firm responsive to social, community, and environmental concerns?"
True
According to Peter Drucker, developing a clear business vision and mission is the first responsibility of strategists.
True
According to Vern McGinnis, to be effective, all a mission statement need to do is define what the organization is and what the organization aspired to be.
True
An effective mission statement generates the impression a firm is successful, has direction, and is worthy of time, support and investment.
True
Attracting customers is a major reason for developing a mission statement.
True
Carefully prepared statements of vision and mission are widely recognized as the first step in strategic management.
True
Corporate policies related to mandatory retirement are a growing concern in many counties.
True
Good mission statements identify the utility of a firm's products to its customers.
True
Individuals who own stock in a corporation are considered stakeholders.
True
The foundation for development of a comprehensive mission statement is provided by a clear vision.
True