Chapter 9, 10 ,11 Strategic managment

What is NOT one of Michael Porter's five competitive forces? • Bargaining power of consumers • Potential entry of new competitors -Bargaining power of unions -Rivalry among competing firms -Bargaining power of suppliers

Bargaining power of unions

Which of the following is similar to the actuarial methods used by insurance companies to rate customers by the chance of positive or negative outcomes? Strategic planning Research and development Information systems Marketing Business analytics

Business analytics

What has been shown to permit quick response to change , prevent panic in crisis situations , and make managers more adaptable ? Audits Measuring performance O Contingency plans Corrective actions Balanced Scorecards

Contingency plans

The critical success factors in a Competitive Profile Matrix (CPM) and an External Factor Evaluation (EFE) Matrix include both internal and external issues. true or false?

False

The management function of organizing is included in human resource management. T F?

False

The only costs involved in going public are the initial costs . True False

False

_________________ exemplifies the complexity of relationships among the functional areas of business. Environmental scanning Government auditing Financial ratio analysis Distribution strategy External auditing

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? Answers: Leverage Liquidity Revenue Growth Profitabilitv Growth

Growth

As indicated in the strategic-management model, a clear and implemented. • implementation plan • short-term objective O mission statement • audit policy evaluation strategy

Mission statement

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 " ? Auditing O R & D O Strategic Management Innovation Financial ratios

Auditing

In developing an organizational chart , avoid having a particular person reporting to more than one person in the chain of command . True False

True

In the IFE Matrix, weights are industry-based, not company-based. T F?

True

Marketing research is the systematic gathering, recording, and analyzing of data to identify and define opportunities and problems relating to the marketing of goods and services. • True False

True

When measuring organizational performance , a comparison should be made between expected results and actual results . True False

True

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

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

The In the context of a balance sheet goodwill represents . the excess of assets over liabilities . O the value associated with benefits from environmental programs . the excess of current assets over liabilities O the value attached to a firm's reputation . O a premium paid over the book value for an acquisition .

a premium paid over the book value for an acquisition .

While multinational corporations face almost limitless social , cultural , demographic , environmental , political , governmental , legal , technological , and competitive opportunities and threats , the number and complexity of these factors do not dramatically increase with the number of products produced and the number of geographic areas served

false

What marketing function includes test marketing? Answers: Distribution Customer analvsis Pricing Product and service planning Selling products and services

Product and service planning

According to Peter Ducker, answering the question "What is our business?" is the first responsibility of strategists. • True • False

True

All firms have a strategy, even if it is informal, unstructured, and sporadic. True or False?

True

Believing it will make it easier for investors to compare firms across countries and make it easier to raise capital globally , most large accounting firms and multinational firms favor the switch from GAAP to IFRS . True False

True

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

True

For firms with large U.S. sales, a strong dollar provides a boost. True or False?

True

Before entering international markets , firms should do research to try and diminish the risk of doing business in new markets . True False

true

The availability , depth , and reliability of economic and marketing information in different countries vary extensively . True False

true

The average level of union membership across the whole European Union , weighted by the numbers employed in the different member states , is close to 25 percent . True False

true

Which statement best describes intuition? • It is better than analysis in decision making. • It is management by ignorance. • It represents a minor factor in decision making integrated with analysis. • It alone should be used in decision making. • It should be coupled with analysis in decision making

• It should be coupled with analysis in decision making

The general public is especially interested in -profitability; social responsibility -social responsibility; the treatment of employees -the treatment of employees; environmental concerns - social responsibility; profitability - environmental concerns; social responsibility

• social responsibility; profitability

In South Korea , activities involve concern for or harmony based on respect of hierarchical relationships , including obedience to authority . Oinhwa Onemaswashio feng shui 10000 O Wa guanxi

- inhwa

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

• as many managers and employees as possible.

Which word or phrase would be most suitable to use in written objective statements ? Maximize 10 percent increase As soon as possible 1000 Minimize Adequate

10 percent increase

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

Developing vision and mission statements

Which of the following is NOT a key question that can reveal internal strengths and weaknesses regarding a firm's marketing function? Answers: Are markets segmented effectively? Does the firm have an effective sales organization? Does the firm have good liquidity? Has the firm's market share been increasing? Are the firm's products and services priced appropriately?

Does the firm have good liquidity?

A mission statement is usually just a simple statement of specific details. • True - False

False

A mission statement is usually just a simple statement of specific details. • True O False

False

In analyzing big data, there is a shift from focusing largely on outliers to also focusing on aggregates. • True • False

False

In the U.S. food industry, demand for processed packaged foods is increasing. True or False

False

Increasingly in marketing settings, a new breed of robots called collaborative machines, are working alongside people. True False

False

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

False

Research and Development (R&D) Management is focused on managing inputs, transformations, and outputs that vary across industries and markets. Selected Answer: Answers: False True

False

Smaller firms favor the switch to IFRS from GAAP . True False

False

______________ exemplifies the complexity of relationships among the functional areas of business. Answers: Financial ratio analysis Government auditing Distribution strategy External auditing Environmental scanning

Financial ratio analysis

___________ties all business functions together and provides the basis for all managerial decisions. Answers: Management Marketing Technology Information Workforce

Information

Which of the following is NOT a pitfall an organization should avoid in strategic planning? • Top managers not actively supporting the strategic-planning process Doing strategic planning only to satisfy accreditation or regulatory requirements Involving all managers rather than delegating planning to a "planner" Failing to communicate the plan to employees Failing to create a collaborative climate supportive of change

Involving all managers rather than delegating planning to a "planner"

When an effective process is followed, developing a and customers. O Vision • Values Possibilities • Long-term objectives • Mission

Mision

Which of the following is the process of influencing people to accomplish specific objectives? Staffing Controlling • Organizing • Planning Motivating

Motivating

_______________ captures the subtle, elusive, and largely unconscious forces that shape a workplace. Answers: Organizational strategy Business model Regulation Organizational culture Organizational mandate

Organizational culture

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

Representative managers and employees from throughout the firm

What step in the strategic management process involves mobilizing employees and managers to put strategies into action? • Strategy evaluation Competitive advantage Strategic advantage Strategy implementation Strategy formulation

Strategy implementation

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 or False

TRUE

Which of the following is NOT an accepted approach for determining a business's worth ? The Net Income Method The Outstanding Shares Method The Price - Earnings Ratio Method The Return on Investment Method The Net Worth Method

The Return on Investment Method

Which of the following is NOT an accepted approach for determining business's worth ? The Net Income Method The Outstanding Shares Method The Price - Earnings Ratio Method O The Return on Investment Method The Net Worth Method

The Return on Investment Method

In general, what happens to American goods in overseas markets when there is a strong dollar? -They are more expensive. • They are cheaper. They are less expensive. They are more attractive. They are desirable.

They are more expensive.

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

True

A vision statement describes an organization's values and priorities. True or False?

True

Most organizations can afford to pursue only a few corporate - level strategies at any given time . True False

True

Substantial research indicates that a healthier workforce can more effectively and efficiently implement strategies. True or False?

True

The IFE Matrix is an evaluation of the effectiveness of the firm's current strategies, not taking into account opportunities and threats. T F?

True

The United States is a leader globally in promoting women and minorities into mid- and top - level managerial positions in business . True False

True

Which of the following is NOT true of vision statements? A vision statement should reveal the type of business the firm engages. The vision statement needs to be doable, but challenging. A vision statement should describe a desired future state. Vision statements should indicate the expected amounts of profits the firm wants to make. Vision statements should be written from a customer perspective.

Vision statements should indicate the expected amounts of profits the firm wants to make.

A good mission statement has • a customer orientation. an environmental orientation. • a shareholder orientation. • a profit orientation. an employee orientation.

a customer orientation

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

a premium paid over the book value for an acquisition .

To gain_________________ firms need to provide unique products and services. • governmental legitimacy • export orders • a bank loan - a sustainable competitive advantage competitors

a sustainable competitive advantage competitors

The goal of strategic management is to • achieve competitive advantage. eliminate competitive advantage. • maintain competitive advantage. -achieve and maintain competitive advantage. -eliminate and abolish competitive advantage.

achieve and maintain competitive advantage.

Selling includes all of these marketing activities EXCEPT • publicity. • dealer relations. • advertising. • sales promotion. • customer analysis.

customer analysis

The following excerpt from a mission statement illustrates which of the nine essential components of a mission statement? "We believe our first responsibility is to the doctors, nurses, patients, mothers, and all others who use our products and services." • Markets • Technology - Concern for Employees - Customers - Concern for Public Image

customers

Without assumptions, planning would be • easier. difficult. • inexpensive • impossible. intuitive.

imposible

With the passage of time , strategy evaluation is becoming Omuch simpler . Oless important O increasingly difficult . an unnecessary activity . Overy convenient .

increasingly difficult .

A resource is valuable if it is rare, hard to imitate, or Answers: easily substitutable. not easily substitutable. inefficient. expensive. inexpensive.

not easily substitutable.

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 Answers: internal audit effect. dysfunctional behavior. organizational culture. behavior modification. groupthink.

organizational culture.

Sometimes strategic formulation. • strategic planning; strategic processing strategic management; strategic planning strategic implementation; strategic focus • strategic management, strategic processing • strategic planning; strategic management

strategic management; strategic planning

The emergence of 3D printing is an example of a(n) ________force that impacts organizations technological political economic • legal social, cultural, demographic, and environment (SCDE)

technological

Business or military success is -unrelated to external conditions. -undermined by the element of surprise. -unrelated to internal conditions. -the product of both attention to changing external and internal conditions and the insightful adaptations to those conditions. -generally the happy result of accidental strategies.

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

A mission statement, is an enduring statement of purpose that distinguishes one organization from other similar enterprises. • True • False

true

Linkages between a firm's culture and strategies often determine success. T F?

true

Worldwide advertising expenditures are expected to reach $700 billion in 2021. t F?

true

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

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

Changing a strategy to fit an existing culture O is usually more effective than changing a firm's culture to fit a new strategy . O is just as effective as changing a firm's culture to fit a new strategy . O is always the best option . O is usually less effective than changing a firm's culture to fit a new strategy . is never right option .

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

In an industry that is , or is rapidly becoming global , the riskiest possible posture is to O remain a global competitor . O expand beyond the role of domestic competitor . O embrace strategic alliances . Obecome a global competitor . O remain a domestic competitor .

O remain a domestic competitor

Which management function includes breaking tasks into jobs, combining jobs to form departments, and delegating authority? Selected Answer: Answers: Staffing Planning Organizing Motivating Controlling

Organizing

In general U.S. managers feel the day has been productive if it is spent Oresting . O thinking . Olistening . Orushing to meetings , appointments , and conferences . Omeditating .

Orushing to meetings , appointments , and conferences .

Modern organizational realities demand many skills of employees . Which of the following is NOT a required skill ? Flexibility Patience Innovation Initiative O Creativity

Patience

Changing a strategy to fit an existing culture O is usually effective than changing a firm's culture to fit a new strategy . O is just as effective as changing a firm's culture to fit a new strategy . O is always the best option . O is usually less effective than changing a firm's culture to fit a new strategy . is never the right option .

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

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

leverage ratio

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 . unnecessary O prohibitively expensive O futile needed O undesirable

needed

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

provide strong incentives to avoid and evade taxes .

More than _________ businesses in the United States fail annually 75,000 50,000 • 100,000 25,000 • 125,000

100,000

In the first six months of 2017, the United States had ______ data breaches • 791 27 • 198 2,053 • 414

791

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

By involvement in the strategic-management process

The Internal Factor Evaluation (IFE) Matrix should be developed on a multiple business unit basis in multidivisional firms. • True • False

False

The trend toward an older America is bad news for furniture producers, hotels, airlines, and home builders.

False

Too much debt in the capital structure of an organization can endanger stockholders ' returns and jeopardize company survival , particularly in periods of high earnings . O True O False

False

Too much debt in the capital structure of an organization can endanger stockholders ' returns and jeopardize company survival , particularly in periods of high earnings . True O False

False

Too much debt in the capital structure of an organization stockholders ' returns and jeopardize company survival , particularly in periods of high earnings O True O False

False

Union Pacific's mission statement focuses on environmental stewardship rather than on transportation or railroads because good mission statements identify the utility of a firm's products to its customers. • True False

False

Well conceived and properly executed mission and vision statements are not subject to revision. • True • False

False

Which of the three finance and accounting decisions involves determining the best capital structure for the firm? 1 Implementation 2 Capital budgeting 3 Financing

Financing

Which of the following is NOT true regarding European workers and workplaces ? O Many Europeans find the notion of team spirit difficult to grasp . Most European workers are unionized . O A 90 - minute lunch break plus 20 - minute morning and afternoon breaks are common in European firms . O Many Europeans respond enthusiastically to pay - for performance , commission salaries , and objective measurement reward systems . O Most European workers enjoy more frequent vacations and holidays than U.S. workers .

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

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

O a premium paid over the book value for an acquisition .

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

O a premium paid over the book value for an acquisition .

Annual objectives are essential for strategy implementation for all of the following reasons EXCEPT Othey are a primary mechanism for evaluating managers . Othey are essential for keeping a strategic plan on track . Othey help improve organizational morale . Othey represent the basis for allocating resources . Othey establish organizational , divisional , and departmental priorities .

Othey help improve organizational morale

Annual objectives are essential for strategy implementation for all of the following reasons EXCEPT Othey are a primary mechanism for evaluating managers . Othey are essential for keeping a strategic plan on track . Othey help improve organizational morale . Othey represent the basis for allocating resources . Othey establish organizational , divisional and departmental priorities .

Othey help improve organizational morale .

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 ? O Price - Earnings Ratio Method Long - term Asset Method Debt / Equity Method O Current Ratio Method O Outstanding Shares Method

Price - Earnings Ratio Method

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 ? O Price - Earnings Ratio Method O Long - term Asset Method Debt Equity Method O Current Ratio Method O Outstanding Shares Method

Price Earnings Ratio Method

What category of ratios includes return on total assets and return on stockholders' equity? Answers: Activity Profitability Liquidity Growth Leverage

Profitability

__________ forces are shaping the way people live, work, produce, and consume. • SCDE - Porter's five- - VUCA - Internal - io

SCDE

In developing an organizational chart , avoid having a particular person reporting to more than one person in the chain of command True False

True

The United States leader globally in promoting women and minorities into mid- and top - level managerial positions in business . True False

True

A____________ integration strategy is used by firms to gain control or ownership of suppliers. backward forward vertical horizontal vortexed

backward

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

find it

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

include monetary amounts, numbers, percentages and ratios.

The functions of management can be performed best when a firm's ________ and cuolture are integrated. strategy • finances • profits external environment • business model

strategy