STRAT MGMT MIDTERM REVIEW

Why do changes in company strategy often require changes in the way an organization is structured?

Structure dictates how objectives and policies will be established. Structure dictates how resources will be allocated. Structure should be designed to facilitate the strategic pursuit of a firm. (ALL OF THEM)

When using External Factor Evaluation (EFE) Matrix, what is done after multiplying each factor's weight by its rating to determine a weighted score?

Summing the weighted scores for each variable to determine the total weighted score for the organization

(T/F) Laser eye surgery would be considered a substitute product for eyeglasses and contact lenses.

True

(T/F) One of the benefits of having a clear mission and vision is the promotion of a sense of shared expectations among all managers and employees.

True

The Internet has transferred power from ________ to ________.

businesses; individuals

Military strategy is based on an assumption of ________, whereas business strategy is based on an assumption of ________.

conflict; competition

All of the following are basic activities of management EXCEPT

consolidating.

Long-term objectives should be all of the following EXCEPT

continually

The primary benefit sought from restructuring is

cost reduction.

The historical trend of people moving from ________ has dramatically slowed.

the Northeast to the Sunbelt

All of the following are basic functions of marketing EXCEPT

value chain analysis.

Which ratio would be considered an activity ratio?

Average collection period

________ can reveal the demographic characteristics of an organization's customers.

Customer profiling

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."

Customers

Which of the three finance and accounting decisions involves determining the best capital structure for the firm?

Financing

During what stage of strategic management are a firm's specific internal strengths and weaknesses determined?

Formulation

Which group would be classified as stakeholders?

Governments, Creditors, Suppliers, Employees (ALL)

According to the Grand Strategy Matrix, organizations in which quadrant have a strong competitive position but are in a slow-growth industry?

IV

Which stage of the strategy-formulation framework includes an IFE Matrix and the Competitive Profile Matrix?

Input

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

Liquidity

Which function of management includes areas such as job design, job specifications, job analysis, and unity of command?

Organizing

What are guides to decision making that address repetitive or recurring situations called?

Policies

When an industry relies heavily on government contracts, which forecasts can be the most important part of an external audit?

Political

Which matrix is included in the decision stage of the strategy formulation framework?

Quantitative Strategic Planning Matrix (QSPM)

Which component of a mission statement addresses the firm's distinctive competence or major competitive advantage?

Self-concept

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.

An overly general mission statement that ________ could be dysfunctional.

does not exclude any strategy alternatives

All of these are pitfalls an organization should avoid in strategic planning EXCEPT

using plans as a standard for measuring performance.

Good mission statements identify the ________ of a firm's products to its customers.

utility

For many firms a key decision with great bearing on Research and Development (R&D) spending is whether to be a "first mover" or a

"late follower."

A total weighted score of ________ in an External Factor Evaluation (EFE) Matrix indicates that an organization is responding in an outstanding way to existing opportunities and threats in its industry.

4.0

What are the three categories of approaches for managing and resolving conflict?

Avoidance, defusion, and confrontation

If suppliers are unreliable or too costly, which of these strategies may be appropriate?

Backward integration

How do line managers become "owners" of the strategy?

By involvement in the strategic-management process

One difference between a Competitive Profile Matrix (CPM) and an External Factor Evaluation (EFE) is that

CPM includes both internal and external issues.

(T/F) An external audit focuses on identifying and evaluating trends and events within the control of management.

False

(T/F) Capacity decisions concern distances from raw materials to production sites to customers.

False

(T/F) Test marketing is used more frequently by industrial companies than consumer goods companies.

False

(T/F) The rational change strategy is one that presents information to convince people of the need for change.

False

What type of organizational structure promotes specialization of labor and allows rapid decision making?

Functional structure

According to the comprehensive strategic-management model, which step immediately follows the establishment of long-term objectives?

Generating, evaluating, and selecting strategies

Firms located in which quadrant of the Grand Strategy Matrix are in an excellent strategic position?

I

Describe why a mission statement is so important in the strategic-management process.

It has been proven that companies who treat their mission statement as an integral part of their firm's culture will reap great benefits it. The mission statement is important because it establishes objectives and formulates strategies that the company plans to follow in order to succeed. It shows the world what the company is striving to be and who it is the company wants to serve. It is a company's declaration of it's "reason for being."

Which of the following is a limitation associated with a SWOT Matrix?

It is a static assessment in time.

Which of the following is the first step in developing an IFE Matrix?

Listing key internal strengths and weaknesses

What are enduring statements of purpose that distinguish one business from other similar firms?

Mission statements

Which strategy-formulation technique reveals the relative attractiveness of alternative strategies and thus provides an objective basis for selecting specific strategies?

Quantitative Strategic Planning Matrix (QSPM)

________ is NOT a strategy-implementation activity.

Taking corrective actions

In general, what happens to American goods in overseas markets when there is a strong dollar?

They are more expensive.

(T/F) In developing an organizational chart, avoid having a particular person reporting to more than one person in the chain of command.

True

Which strategies are defensive tactics directed at reducing internal weaknesses and avoiding external threats?

WT

Which of these basic questions should a vision statement answer?

What do we want to become?

Resistance to change can manifest itself through

absenteeism. sabotaging production machines. filing unfounded grievances. unwillingness to cooperate. (ALL OF THEM)

The goal of strategic management is to

achieve and maintain competitive advantage.

The purpose of a mission statement is to declare all of these EXCEPT

an annual financial plan.

In the process of developing a mission statement, it is important to involve

as many managers as possible.

A systematic and ethical process for gathering and analyzing information about the competition's activities and general trends to further a business' own goals is called

competitive intelligence.

The two internal dimensions represented on the axes of the SPACE Matrix are

competitive position and financial position.

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

distinctive competencies.

According to Drucker, a business' mission is the foundation for all of the following EXCEPT

employee wage rates.

The act of strengthening employees' sense of effectiveness by encouraging and rewarding them for participating in decision-making and exercising initiative and imagination is referred to as

empowerment

In mass retailing, big-box companies like Walmart, Best Buy, and Sears are

finding that less brick and mortar is better.

The act of oversight and direction for an organization is referred to as

governance

Many economists say the current rash of trade constraints will make it ________ for global economic growth.

harder

When the products being purchased are standard or undifferentiated, it results in ________ bargaining power of consumers.

higher

The strategic-management process

is a continuous process.

Policies

let both employees and managers know what is expected of them. provide a basis for management control. allow coordination across organizational units. reduce the amount of time managers spend making decisions. (ALL OF THEM)

Formal statements of organizational philosophy, charters, creeds, materials used for recruitment and selection, and socialization help an organization

link culture to strategy.

Considerable time and effort should be devoted to assuring objectives are well conceived because they represent the basis for

monitoring progress toward long-term objectives. establishing divisional priorities. allocating resources. evaluating managers. (ALL OF THEM)

All of the following are political, governmental, and legal variables that can represent key opportunities or threats to organizations EXCEPT

population changes by race, age, sex, and level of affluence.

In order to appeal to diverse stakeholders, an effective mission statement should be

reconciliatory

Effective and carefully planned mission statements

require infrequent major changes, but are always subject to revision.

A divisional structure by product is most effective when

special emphasis needs to be placed on specific products. an organization offers few products. an organization's products or services differ substantially. special emphasis needs to be placed on specific services. (ALL OF THEM)

For upper-level executives, ________ is the major variable used for compensation incentives.

stock price

The Boston Consulting Group (BCG) Matrix is designed specifically to enhance which type of firm's efforts to formulate strategies?

Companies with more than one division

In the Boston Consulting Group (BCG) Matrix, how would a division with a low relative market share position in a high growth industry be described?

Question Mark

What action involves reconfiguring or redesigning work, jobs, and processes for the purpose of improving cost, quality, service, and speed?

Reengineering

What are the two external dimensions of the SPACE Matrix?

Stability position and industry position

(T/F) The five major categories of variables known as external forces are: 1) economic forces, 2) social, cultural, demographic, and natural environment forces, 3) political, governmental, and legal forces, 4) technological forces and 5) competitive forces.

True

(T/F) The major benefit of the Boston Consulting Group (BCG) Matrix is that it draws attention to the cash flow, investment characteristics, and needs of an organization's various divisions.

True

All of the following are principles of good organizational governance, as established by BusinessWeek, EXCEPT

at least three directors are current or former company executives.

Whenever new firms can easily enter a particular industry, the intensity of competitiveness among firms tends to

increase

According to Greenley, strategic management offers all of the following benefits EXCEPT

increased resistance to change.

An absence of conflict can signal ________ within an organization.

indifference and apathy

Strategy evaluation is necessary because

internal and external factors are constantly changing.

According to McGinnis, a mission statement should be all of the following EXCEPT

it should be broad enough to include all ventures.

A resource is valuable if it is rare, hard to imitate, or

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

organizational culture.

A divisional structure by geographic area is most appropriate when

organizations have similar branch facilities located in widely dispersed areas.

The match an organization makes between its internal resources and skills and the opportunities and risks created by its external factors can be defined as

strategy