MADM 760 - Chapter 4 & 5

Reason for firm's existence known as

The mission

The same social force can affect different industries in different ways. True or False

True

Outsourcing efforts can fail because

A FIRM MIGHT OUTSOURCE AN ACTIVITY THAT SHOULD NOT BE OUTSOURCED

11. E-tailing is synonymous with __________. A. B2B B. Business2Consumer C. C2C D. C2B

B. Business2Consumer

8. When a recession occurs __________. A. all industries benefit B. some industries benefit C. no industries benefit D. none of the above

B. some industries benefit A recession tends to help firms in most industries, but it does not benefit all industries.

11. The ethical perspective that suggests that organizational decisions should be made in accordance with established rules or guidelines is known as __________. A. the self-interest view B. the justice view C. the rights view D. the integrative social contracts view

B. the justice view

12. The systematic collection and analysis of information about relevant macroenvironmental trends is known as __________. A. strategic planning B. strategic management C. environmental scanning D. none of the above.

C. environmental scanning

7. Which of the following is not an example of a social force? A. trends B. values C. industrial change D. all of the above

C. industrial change Social forces include such factors as societal values, trends, traditions, and religious practices.

9. An individual's responsibility to make business decisions that are legal, honest, moral, and fair is known as __________. A. social responsibility B. the social imperative C. managerial ethics D. all of the above

C. managerial ethics An individual's responsibility to make business decisions that are legal, honest, moral, and fair is known as managerial ethics. Social responsibility refers to the expectation that business firms should serve both society and the financial interests of the shareholders.

Goals of Creditors?

COMPANY SHOULD MAINTAIN A HEALTHY FINANCIAL POSTURE AND POLICY OF ON-TIME PAYMENTS OF DEBT

10. Leveraged buyouts can __________. A. strap the company with a large amount of debt B. serve as a system of checks and balances C. lead to the sale of company assets D. all of the above

D. all of the above Although LBOs may serve as a system of checks and balances, they can also strap the company with so much debt that assets must be sold to reduce the debt load.

9. Technological forces often __________. A. decimate an entire industry B. spawn new industries C. vary substantially among industries D. all of the above

D. all of the above Technological forces vary across industries and can eliminate existing industries and create new ones.

10. How has the Internet changed strategic management? A. It promotes information symmetry. B. It can often be used as a distribution channel. C. It often reduces costs. D. all of the above

D. all of the above The Internet promotes information symmetry, can be used as a distribution channel in some instances, and has the potential for cost shifting and cost reductions.

8. Which of the following is not an example of a stakeholder? A. customers B. suppliers C. employees D. none of the above

D. none of the above Stakeholders include any groups that have a "stake" in the success of the organization.

12. The assessment of strategies and related processes that promote superior performance from both market and environmental perspectives is known as _________. A. CSR B. managerial ethics C. management decision-making effectiveness D. none of the above

D. none of the above The assessment of strategies and related processes that promote superior performance from both market and environmental perspectives is known as Sustainable Strategic Management.

7. The reason for the firm's existence is known as __________. A. the vision B. organizational goals C. organizational objectives D. none of the above

D. none of the above The reason for the firm's existence is known as the mission.

Commoditization refers to the ability to individualize product and service offerings to meet specific buyer needs. True or False

False

In The World is Flat, Thomas Friedman argued that recent global and technological changes have increased the world dominance of Western powers like the United States. True or False

False

The pace of technological change relative to an industry's development is generally easy to predict. True or False

False

Corporate ethics refers to the expectation that business firms should serve both society and financial interest of shareholders. True or False

False Corporate social responsibility

4. Commoditization refers to the ability to individualize product and service offerings to meet specific buyer needs. True or False

False Mass customization refers to the ability to individualize product and service offerings to meet specific buyer needs.

1. Goals are specific and often quantified versions of objectives. True or False

False Objectives are specific and often quantified versions of goals.

2. If a firm is able to consistently earn above-average profits, it is effectively balancing the goals of its stakeholders. True or False

False Profitability is only one stakeholder goal.

3. The agency problem refers to the balancing act a firm must exhibit when attempting to satisfy the myriad of governmental agencies. True or False

False The agency problem refers to a situation in which a firm's managers (i.e., the owners' agents) fail to act in the best interests of the shareholders.

5. The integrative social contracts view of ethics suggests that decisions should be based on religious convictions. True or False

False The integrative social contracts view of ethics suggests that decisions should be based on existing norms of behavior, including cultural, community, or industry factors.

3. The unconscious reference to one's own cultural values as a standard of judgment is known as cultural bias. True or False

False The unconscious reference to one's own cultural values as a standard of judgment is known as the self-reference criterion.

4. Most organizations can be classified as either ethical or unethical. True or False

False Ethics is an individual phenomenon; managers and other employees can be ethical or unethical.

The need to rely heavily on borrowed funds to fiancé an acquisition is associated with

LEVERAGED BUYOUTS

Utilization of management stock options can support which agency perspective?

MANAGEMENT AND STOCKHOLDER SHARE THE SAME INTERESTS

The ability to individualize product and service offerings to meet specific buyer needs is known as

MASS CUSTOMIZATION

Boards of directors are responsible for

MONITORING ACTIVITIES IN THE ORGANIZATION ESTABLISHING THE BROAD STRATEGIC DIRECTION FOR THE FIRM EVALUATING TOP MANAGEMENT'S STRATEGIC PROPOSALS

The board of directors, institutional investors, and large shareholders (blockholders) who monitor firm strategies to ensure effective management are collectively referred to as

NOT CORPORATE LEADERS NOT CORPORATE ACCESS NOT CORPORATE PHILANTHROPY

Common suggestion to align the goals of managers with those of stockholders is to pursue

NOT INCREASE SALARY NOT LIBERAL VACATION LEAVE NOT JOB ENLARGEMENT

According to the notion of disaggregation and reaggregation,

PROGRESSIVE FIRMS HAVE BEGUN TO FORM PARTNERSHIPS INSTEAD OF FULFILLING ALL OF THE BUSINESS FUNCTIONS THEMSELVES

Which of the following is not a strategic dimension of the Internet?

THE ELIMINATION OF A NEED FOR PROFITABILITY

Specific, quantifiable versions of goals constitute

THE ORGANIZATIONS OBJECTIVES

Scientific improvements and innovations are examples of

Technological Forces

1. In many respects, social forces are the drivers of consumer markets. True or False

True

2. The expansion of a religion in an emerging country is an example of a social force. True or False

True

6. Offshoring refers to the relocation of some or all of a firm's manufacturing or other business activities to another country, usually to reduce costs. True or False

True

Moral hazard exists when the parties in an arrangement do not share equally in the risks and benefits. True or False

True

One of the reasons that outsourcing/offshoring debates are so difficult to resolve is that different countries have markedly different regulations. True or False

True

Situation in which firm's managers fail to act in best interest of shareholders is known as agency problem True or False

True

When additional outsiders are added to insider-dominated boards, CEO dismissal is more likely when corporate performance declines. True or False

True

5. Reading business publications can serve as a means of environmental scanning. True or False

True Environmental scanning is the process of staying abreast of changes in the macroenvironment, a process that can be assisted by reading business publications.

6. Environmental scanning can be difficult for large firms because of the availability of too much information. True or False

True The main problem created by environmental scanning is often one of determining which information available warrants attention.

Ethics suggests that anticipated outcomes and consequence should be only considerations when evaluating an ethical dilemma

UTILITARIAN VIEW