BUS 450: Exam 2

Failing to follow certain guidelines in conducting strategic management can foster _______ of the process and create problems for the organization.

criticisms

About how many African countries are considered​ democracies?

30

Regarding corporate​ valuation, a conservative rule of thumb is to establish a​ business's worth as​ ______ times the​ firm's current annual profit.

5

Which statement below is​ FALSE? A. Donald Palmer recently reported that misconduct is most often done by people who party weekly. B. Donald Palmer recently reported that misconduct is a normal phenomenon. C. Donald Palmer recently reported that wrongdoing is as prevalent as rightdoing. D. Prior research suggests that being unethical is​ abnormal, rare, and aberrant behavior perpetrated by people who are abhorrent.

A. Donald Palmer recently reported that misconduct is most often done by people who party weekly.

Which statement below is​ FALSE? A. Mintzberg refers to strategic planning as an​ "inevitable" process, whereas strategy scientists use the term​ "absolute" process. B. ​Mintzberg's notion of​ "crafting" strategies embodies the artistic​ model, which suggests that strategic decision making be based primarily on holistic​ thinking, intuition, and creativity. C. Proponents of the artistic view often consider​ strategic-planning exercises to be time poorly spent. D. This textbook rejects the Mintzberg philosophy. E. The Mintzberg philosophy insists on​ informality, whereas strategy scientists​ (and the authors of this​ text) insist on more formality.

A. Mintzberg refers to strategic planning as an​ "inevitable" process, whereas strategy scientists use the term​ "absolute" process.

Which​ statement(s) below is​ TRUE? A. Seeing Goodwill regularly increasing on a balance sheet is not a good thing. B. Goodwill is the same term often used for intangibles. C. Intangibles increase when treasury stock increases. D. FASB Rule 16 requires companies to admit once a year whether the premiums they paid for​ acquisitions, called​ goodwill, were a waste of money. E. Goodwill cannot decrease on balance sheet from one year to the next.

A. Seeing Goodwill regularly increasing on a balance sheet is not a good thing.

Which statement below is​ FALSE? A. There are no good reasons to keep the strategy process and strategies themselves visible and open rather than hidden and secret. B. Keeping strategies secret from employees and stakeholders at large could severely inhibit employee and stakeholder​ communication, understanding, and​ commitment; likewise, maintaining secrecy could mean forfeiting valuable input that employees and stakeholders could offer regarding the formulation or implementation of the strategy.. C. There are good reasons to keep strategies hidden from all but​ top-level executives. D. The Chinese warrior Sun Tzu and military leaders today strive to keep strategies​ secret, because war is based on​ deception; but for business​ organizations, secrecy may not be best. E. Strategists must decide what is best for their firms.

A. There are no good reasons to keep the strategy process and strategies themselves visible and open rather than hidden and secret.

EAT stands for

earnings after tax

A conservative rule of thumb is to establish a business's worth as ___times the firm's current annual profit. In general, this method is more feasible for small business evaluation.

5

According to the​ chapter, "______ may be the​ single-greatest threat to successful strategy​ implementation."

Resistance to change

Who​ said, "When wealth is​ lost, nothing is​ lost; when health is​ lost, something is​ lost; when character is​ lost, all is​ lost."

Rev. Billy Graham

As described in Chapter​ 9, what is the first​ strategy-evaluation activity?

Review the underlying bases of strategy.

Which statement below is FALSE regarding the​ strategic-planning process? A. Pursuing too many strategies at the same time is a critical mistake. B. Strategic decisions require tradeoffs such as​ long-range versus​ short-range considerations and maximizing profits versus increasing​ shareholders' wealth. C. Strategic planning should be a learning process for all managers and employees. D. Executives should keep​ assignments, team​ memberships, and meeting formats constant for a year. E. Strategic planning should be a people process more than a paper process.

D. Executives should keep​ assignments, team​ memberships, and meeting formats constant for a year.

Which​ statement(s) is​ TRUE? A. Another name for the balance sheet account—​additional-paid-in-capital—is treasury stock. B. Balance sheets will not balance if retained earnings are negative. C. New equity issued in a given year goes on the treasury stock row on a balance sheet. D. Sometimes firms will increase their Treasury Stock near the end of the​ quarter, or near the end of the​ year, to inflate their EPS​ "artificially". E. In developing projected financial​ statements, the retained earnings row is used as the plug figure.

D. Sometimes firms will increase their Treasury Stock near the end of the​ quarter, or near the end of the​ year, to inflate their EPS​ "artificially".

Due to its dwindling workforce and aging​ population, what country is increasingly promoting women into managerial​ positions?

Japan

The price and quality of a firm's products and services must be competitive on a ______ basis

worldwide

Policies should be stated in ______ whenever possible. They represent the means for carrying out ________________

writing; strategic decisions

Is CSR related to a firm's financial performance?

yes

Goodwill on the balance sheets of​ S&P 500 firms changed from​ $1.7 trillion in 2007 to how much in​ 2017?

​$3 trillion

Globalization

process of doing business worldwide, so strategic decisions are made based on global profitability of the firm rather than just domestic considerations

With the recent merger and acquisition boom, S&P 500 firms experienced a ______ percent increase in goodwill from $1.7 trillion in 2007 to more than $3 trillion in 2017.

70

Who promoted the notion that "changes in strategy lead to changes in organizational structure"?

Alfred Chandler

2 primary sources of capital

debt and equity

Competitive advantages normally are the result of superiority in one of three areas:

(1) resources, (2) skills, or (3) position.

Projected Financial Statements allows...

- an organization to examine the expected results of various actions and approaches - an organization to compute projected financial ratios under various strategy-implementation decisions

The term​ "corporate wellness" has largely been replaced by what new​ term?

Corporate​ well-being

when stating an objective, terms and phrases such as maximize, minimize, as soon as possible, and adequate should be _______

avoided.

primary benefit sought from restructuring

cost reduction

The most widely used structure is the _________ or centralized type because this structure is the simplest and least expensive of the seven alternatives.

functional

A Divisional (Decentralized) Structure is organized by

geographic area, product or service, customer, or process

Most economists argue that _________ harms the world economy because it inhibits trade among countries and invites retaliation.

protectionism

Whereas restructuring is concerned with eliminating or establishing, shrinking or enlarging, and moving organizational departments and divisions, the focus of ____________ is changing the way work is actually carried out.

reengineering

Policies refer to.....

specific guidelines, methods, procedures, rules, forms, and administrative practices established to support and encourage work toward stated goals.

True or false A corporate objective to become more lean and mean must today include consideration for the fact that a good home life contributes immensely to a good work life.

true

Price-Earnings Ratio Method

(Stock Price ÷ EPS) × NI

__________________________________________, CEO of Philip Morris, is actively shifting consumers worldwide to a smokeless tobacco product, that heats but does not burn tobacco.

Andre Calantzopoulos

​Theoretically, how much debt should a company carry on its balance​ sheet?

An enterprise should carry enough debt in its capital structure to boost its return on investment in projects earning more than the cost of the debt.

____________ may be the most important word in strategic management.

Communication

What three retailers are discussed in the chapter as being the top 3 Green​ Power-Use retailers in 2017.

Kohl's Department​ Stores, Starbucks​ (company-owned café retail​ stores), IKEA

The top 20 most valuable college football programs are listed in the chapter in terms of their monetary value. What team is most​ valuable?

Ohio State Buckeyes

Multinational (international) Firms

Organizations that conduct business operations across national borders

Reshoring

Refers to U.S. companies moving a portion of their manufacturing back to the United States.

Step 2 of EPS/EBIT Analysis

Set Up a Computation Table

issuing bonds can be an effective way to raise needed capital especially when....

a company's balance sheet is strong and its credit rating excellent

Contingency plans should be established if​ _____.

a new technological advancement makes a new product obsolete sooner than expected

In a Divisional (Decentralized) Structure, functional activities are performed both....

centrally and in each separate division

A key ingredient for establishing an ethics culture is to develop a clear _____ of business ethics.

code

human resource issues can make or break successful strategy _________________.

implementation

American managers in China have to be careful about how they arrange office furniture because Chinese workers believe in ​______​, the practice of harnessing natural forces.​ Also, U.S. managers in Japan have to be careful about ​______​, whereby Japanese workers expect supervisors to alert them privately of changes rather than informing them in a meeting.

feng​ shui; nemaswashio

EBIT stands for _________ and is also called _______

earnings before interest and taxes; operating income.

EBT stands for

earnings before tax

EPS stands for ____________ and is net income divided by...

earnings per share; net income divided by number of shares outstanding

The _______ challenge facing all organizations requires managers to formulate strategies that preserve and conserve natural resources and control pollution.

ecological

The availability, depth, and reliability of __________ and _________information in different countries vary extensively, as do industrial structures, business practices, and the number and nature of regional organizations.

economic and marketing

According to the International Standards​ Organization, the word​ _____ is defined as a surrounding in which an organization​ operates, including​ air, water,​ land, natural​ resources, flora,​ fauna, humans, and their interrelations.

environment

According to the ISO 14001​ standard, a community or organization is required to put in place and implement a series of practices and procedures​ that, when taken​ together, result in​ a/an ______.

environmental management system​ (EMS)

True or false Corporate valuation is an exact science; value is never in the eye of the beholder.

false Corporate valuation is not an exact science; value is sometimes in the eye of the beholder.

True or false A bribe is not considered a crime in most countries of the world, including the United States

false it is a crime

A world market has emerged from what previously was a multitude of distinct national markets, and the climate for international business today is more ________ than in years past.

favorable

Goodwill

if a firm acquires another firm and pays more than the book value (market value), then the additional amount paid is called a premium and becomes this, which is a line item on the assets portion of a balance sheet

An absence of conflict can signal ______ and _______

indifference and apathy

Establishing annual objectives can lead to conflict because....

individuals have different expectations and perceptions, schedules create pressure, personalities are incompatible, and misunderstandings occur between line managers and staff managers

When a firm changes its strategy, the existing organizational structure may become _______________.

ineffective

The Mintzberg philosophy insists on _______, whereas strategy scientists (including this text's authors) insist on more ______.

informality; formality

a firm examines six key issues in evaluating its strategies:

(1) Customers, (2) Managers/Employees, (3) Operations/Processes, (4) Community/Social Responsibility, (5) Business Ethics/Natural Environment, (6) Financial

Companies are ranked in seven categories for Corporate Responsibility Magazine's 100 Best Corporate Citizens

(1) environment, (2) climate change, (3) employee relations, (4) human rights, (5) corporate governance, (6) financial performance, and (7) philanthropy and community support

corrective actions are almost always needed except when...

(1) external and internal factors have not significantly changed (2) the firm is progressing satisfactorily toward achieving stated objectives.

Range of Approaches for managing conflict

-Ignoring the problem -Physically separating the conflicting individuals -Holding meetings to seek compromise

Proponents of companies monitoring employees' social-media activities emphasize that...

-a company's reputation in the marketplace can easily be damaged by disgruntled employees venting on social media sites -social media records can be subpoenaed, like email, and used as evidence against the company

Work and family strategies now represent a competitive advantage for those firms that offer such benefits as:

-elder care assistance -flexible scheduling -job sharing -adoption benefits -onsite summer camp -employee help line -pet care -lawn service referrals

The Strategic Business Unit (SBU) Structure

-groups similar divisions into strategic business units and delegates authority and responsibility for each unit to a senior executive who reports directly to the chief executive officer -can facilitate strategy implementation by improving coordination between similar divisions and channeling accountability to distinct business units

The World Bank and the International Finance Corporation annually rank 189 countries in terms of their respective ease of doing business rankings based on how easy it is to (1 (best) to 189 (worst)):

-start a business -deal with construction permits -register property -get credit -protect investors -pay taxes -trade across borders -enforce contracts -resolve insolvency -get electricity

the global challenge

1) America's economy is becoming much less American. 2) A world economy and monetary system are emerging. 3) Markets are shifting rapidly and converging in tastes, trends, and prices. 4) Few companies can afford to ignore the presence of international competition

potential benefits of outsourcing

1) Cost savings: Access lower wages in foreign countries. 2) Focus on core business: Focus resources on developing the core business rather than being distracted by other functions. 3) Cost restructuring: Outsourcing changes the balance of fixed costs to variable costs by moving the firm more to variable costs. 4) Improve quality: Improve quality by contracting out various business functions to specialists. 5) Knowledge: Gain access to intellectual property and wider experience and knowledge. 6) Contract: Gain access to services within a legally binding contract with financial penalties and legal redress. This is not the case with services performed internally. 7) Access to talent: Gain access to a larger talent pool and a sustainable source of skills, especially science and engineering. 8) Catalyst for change: Use an outsourcing agreement as a catalyst for major change that cannot be achieved alone. 9) Reduce time to market: Accelerate development or production of a product through additional capability brought by the supplier. 10) Risk management: Manage risk by partnering with an outside firm. 11) Tax benefit: Capitalize on tax incentives to locate manufacturing plants to avoid high taxes in various countries.

Finance/Accounting Issues

1) Determine capital structure 2) Develop projected financial statements 3) Perform corporate valuation 4) Analyze financial ratios 5) Manage initial public offerings (IPOs), cash levels, and corporate bonds

Business ethics, social responsibility, and environmental sustainability issues are _________________and impact all areas of the strategic management process.

interrelated

Workplace romance is an ____ _______ ______ ______ _______ _____, as opposed to sexual harassment, which the Equal Employment Opportunity Commission (EEOC) defines broadly as unwelcome sexual advances, requests for sexual favors, and other verbal or physical conduct of a sexual nature.

intimate relationship between two consenting employees

Among the BRICS nations, Brazil (123), Russia (40), India (130), China (78), and South Africa (74), India was ranked _______; however, has made substantial progress in some areas such as electricity connections but has slipped in other areas such as payment of taxes and enforcing contracts.

lowest

Consumers are flocking to _______ products.

organic

The Institute of Business Ethics (IBE) recently conducted a study titled "Does Business Ethics Pay?" and concluded that companies displaying a "clear commitment to ethical conduct" consistently _____________ companies that do not display ethical conduct.

outperform

The ______________ business is booming. The current U.S. administration is spurring and rewarding __________

outsourcing; reshoring

For a matrix structure to be effective, organizations need....

participative planning, training, clear mutual understanding of roles and responsibilities, excellent internal communication, and mutual trust and confidence

A product-positioning tool widely used in marketing is _____________________, or developing schematic representations to reflect how a firm's goods or services compare to competitors' in the mind of consumers.

perceptual mapping

Annual objectives are often stated in terms of....

profitability, growth, and market share by business segment, geographic area, customer groups, and product.

Effective resource allocation does not guarantee successful strategy implementation because...

programs, personnel, controls, and commitment must breathe life into the resources provided.

Restructuring involves ______ the size of the firm in terms of number of employees, number of divisions or units, and number of hierarchical levels in the firm's organizational structure

reducing

board of directors responsibilities and duties

1. CONTROL AND OVERSIGHT OVER MANAGEMENT a. Select the Chief Executive Officer (CEO). b. Sanction the CEO's team. c. Provide the CEO with a forum. d. Ensure managerial completely. e. Evaluate management's performance. f. Set management's salary levels, including fringe benefits. g. Guarantee managerial integrity through continuous auditing. h. Evaluate corporate strategies. i. Devise and revise policies to be implemented by management. 2. ADHERENCE TO LEGAL PRESCRIPTIONS a. Keep abreast of new laws. b. Ensure the entire organization fulfills legal prescriptions. c. Pass bylaws and related resolutions. d. Select new directors. e. Approve capital budgets. f. Authorize borrowing, new stock issues, bonds, and so on. 3. CONSIDERATION OF STAKEHOLDERS' INTERESTS a. Monitor product quality. b. Facilitate upward progression in employee quality of work life. c. Review labor policies and practices. d. Improve the customer climate. e. Keep community relations at the highest level. f. Use influence to better governmental, professional association, and educational contacts. g. Maintain good public image. 4. ADVANCEMENT OF STOCKHOLDERS' RIGHTS a. Preserve stockholders' equity. b. Stimulate corporate growth so that the firm will survive and flourish. c. Guard against equity dilution. d. Ensure equitable stockholder representation. e. Inform stockholders through letters, reports, and meetings. f. Declare proper dividends. g. Guarantee corporate survival. h. Guarantee the film's financial statements are feasible and accurate.

Disadvantages of a Divisional Organizational Structure

1. Can be costly 2. Duplication of functional activities 3. Requires a skilled management force 4. Requires an elaborate control system 5. Competition among divisions can become so intense as to be dysfunctional 6. Can lead to limited sharing of ideas and resources 7. Some regions, products, or customers may receive special treatment

Advantages of a Divisional Organizational Structure

1. Clear accountability 2. Allows local control of local situations 3. Creates career development chances 4. Promotes delegation of authority 5. Leads to competitive climate internally 6. Allows easy adding of new products or regions 7. Allows strict control and attention to products, customers, or regions

Advantages of a Matrix Structure

1. Clear project objectives 2. Employees clearly see results of their work 3. Easy to shut down a project 4. Facilitates uses of special equipment, personnel, and facilities 5. Shared functional resources instead of duplicated resources, as in a divisional structure

15 Guidelines for Developing an Organizational Chart

1. Instead of chairman of the board, make it chairperson of the board. 2. Make sure the board of directors reveals diversity in race, ethnicity, gender, and age. 3. Make sure the chair of the board is not also the CEO or president of the company. 4. Make sure the CEO of the firm does not also carry the title president. 5. Reserve the title president for the division heads of the firm. 6. Include a COO if divisions are large or geographically dispersed. 7. Make sure only presidents of divisions report to the COO. 8. Make sure functional executives such as CFO, CIO, CMO, CSO, R&D, CLO, CTO, and HRM report to the CEO, not the COO. 9. Make sure every executive has one boss, so lines in the chart should be drawn accordingly, assuring unity of command. 10. Make sure span of control is reasonable, probably no more than 10 persons reporting to any other person. 11. Make sure diversity in race, ethnicity, gender, and age is well represented among corporate executives. 12. Avoid a functional type structure for all but the smallest firms. 13. Decentralize, using some form of divisional structure, whenever possible. 14. Use a SBU type structure for large firms with more than 10 divisions. 15. Make sure executive titles match product names as best possible in division-by-product and SBU-designated firms.

guidelines for strategic planning to be effective.

1. It should be a people process more than a paper process. 2. It should be a learning process for all managers and employees. 3. It should be words supported by numbers rather than numbers supported by words. 4. It should be simple, non-routine, economical, and provide timely information. 5. It should vary assignments, team memberships, meeting formats, and even the planning calendar. 6. It should challenge the assumptions underlying the current corporate strategy. 7. It should welcome bad news and provide a true picture of what is happening. 8. It should welcome open-mindedness and a spirit of inquiry and learning. 9. It should not be a bureaucratic mechanism. 10. It should not become ritualistic, stilted, or orchestrated. 11. It should not be too formal, predictable, or rigid. 12. It should not contain jargon or arcane planning language. 13. It should not be a formal system for control and should not dominate decisions. 14. It should not disregard qualitative information. 15. It should not be controlled by "technicians." 16. Do not pursue too many strategies at once. 17. Continually strengthen the "good ethics is good business" policy.

Ways and Means for Altering an Organization's Culture

1. Recruitment 2. Training 3. Transfer 4. Promotion 5. Restructuring 6. Reengineering 7. Role modeling 8. Positive reinforcement 9. Mentoring 10. Revising vision or mission 11. Redesigning physical spaces or facades 12. Altering reward system 13. Altering organizational policies, procedures, and practices

Disadvantages of a Matrix Structure

1. Requires excellent vertical and horizontal flows of communication 2. Costly because creates more manager positions 3. Violates unity of command principle 4. Creates dual lines of budget authority 5. Creates dual sources of reward and punishment 6. Creates shared authority and reporting 7. Requires mutual trust and understanding

Advantages of a Functional Organizational Structure

1. Simple and inexpensive 2. Capitalizes on specialization of business activities such as marketing and finance 3. Minimizes need for elaborate control system 4. Allows for rapid decision making

10 Companies With The Best CSR Reputation as Rated by Consumers

1. The Lego Group 2. Microsoft 3. Google 4. Walt Disney Company 5. BMW Group 6. Intel 7. Robert Bosch 8. Cisco Systems 9. Rolls-Royce Aerospace 10. Colgate-Palmolive

Management Trade-Off Decisions Required in Strategy Implementation

1. To offer extensive or limited management development workshops and seminars 2. To recruit through employment agencies, college campuses, or newspapers 3. To promote from within or to hire from the outside 4. To promote on the basis of merit or on the basis of seniority 5. To tie executive compensation to long-term or annual objectives 6. To allow heavy, light, or no overtime work 7. To establish a high- or low-safety stock of inventory

Symptoms of an Ineffective Organizational Structure

1. Too many levels of management 2. Too many meetings attended by too many people 3. Too much attention being directed toward solving interdepartmental conflicts 4. Too large a span of control 5. Too many unachieved objectives 6. Declining corporate or business performance 7. Losing ground to rival firms 8. Revenue or earnings divided by number of employees or number of managers is low compared to rival firms

The Top 15 Green-Power Use Colleges and Universities (2017)

1. University of Tennessee 2. University at Buffalo 3. University of Pennsylvania 4. Georgetown University 5. Stanford University 6. University of Oklahoma 7. Carnegie Mellon University 8. University of California 9. Northwestern University 10. The Ohio State University 11. University of North Texas 12. Oklahoma State University 13. University of Missouri 14. University of Maryland 15. Drexel University

Six benefits of having a diverse workforce:

1. Women and minorities have different insights, opinions, and perspectives that should be considered. 2. A diverse workforce portrays a firm committed to nondiscrimination. 3. A workforce that mirrors a customer base can help attract customers, build customer loyalty, and design/offer products/services that meet customer needs/wants. 4. A diverse workforce helps protect the firm against discrimination lawsuits. 5. Women and minorities represent a huge additional pool of qualified applicants. 6. A diverse workforce strengthens a firm's social responsibility and ethical position

Strategists use common quantitative criteria (financial ratios) to make three critical comparisons:

1.Comparing the firm's performance over different time periods 2.Comparing the firm's performance to competitors' 3.Comparing the firm's performance to industry averages

Reasons Why Preserving the Environment Should Be a Permanent Part of Doing Business

1.Consumer demand for environmentally safe products and packages is high. 2.Public opinion demanding that firms conduct business in ways that preserve the natural environment is strong. 3.Environmental advocacy groups now have more than 20 million Americans as members. 4.Federal and state environmental regulations are changing rapidly and becoming more complex. 5.Many lenders are examining the environmental liabilities of businesses seeking loans. 6.Many consumers, suppliers, distributors, and investors shun doing business with environmentally weak firms. 7.Liability suits and fines against firms having environmental problems are on the rise.

Why Strategy Evaluation is More Difficult Today

1.Domestic and world economies are today more interrelated 2.Product life cycles are shorter 3.Technological advancements are faster 4.Change occurs rapidly 5.Competitors abound globally 6.Planning cycles are shorter 7.Social media and smartphones have changed everything

Three basic activities of Strategy Evaluation:

1.Examine the underlying bases of a firm's strategy. 2.Compare expected results with actual results. 3.Take corrective actions to ensure that performance conforms to plans.

advantages of global business

1.Firms can gain new customers for their products. 2.Foreign operations can absorb excess capacity, reduce unit costs, and spread economic risks over a wider number of markets. 3.Foreign operations can allow firms to establish low-cost production facilities in locations close to raw materials or cheap labor. 4.Competitors in foreign markets may not exist, or competition may be less intense than in domestic markets. 5.Foreign operations may result in reduced tariffs, lower taxes, and favorable political treatment. 6.Multinational joint ventures can enable firms to learn the technology, culture, and business practices of other people and to make contacts with potential customers, suppliers, creditors, and distributors in foreign countries. 7.Economies of scale can be achieved from operation in global rather than solely domestic markets. 8.A firm's power and prestige in domestic markets may be significantly enhanced if the firm competes globally.

7 important limitations/considerations associated with EPS/EBIT analysis

1.Flexibility 2.Dilution of ownership 3.Timing 4.Leveraged situation 5.Continuity 6.EBIT ranges 7.Dividends

disadvantages of global business

1.Foreign operations could be seized by nationalistic factions. 2.Firms confront different and often little-understood social, cultural, demographic, environmental, political, governmental, legal, technological, economic, and competitive forces. 3.Weaknesses of competitors in foreign lands are often overestimated, and strengths are often underestimated. 4.Language, culture, and value systems differ among countries, which can create barriers to communication. 5.Gaining an understanding of regional organizations is difficult. 6.Dealing with two or more monetary systems can complicate international business operations.

Reviewing Bases of Strategy (Questions to ask)

1.How have competitors reacted to our strategies? 2.How have competitors' strategies changed? 3.Have major competitors' strengths and weaknesses changed? 4.Why are competitors making certain strategic changes? 5.Why are some competitors' strategies more successful than others? 6.How satisfied are our competitors with their present market positions and profitability? 7.How far can our major competitors be pushed before retaliating? 8.How could we more effectively cooperate with our competitors?

Financial ratios are examined based on:

1.How they change over time 2.How they compare to industry norms 3.How they compare with key competitors

Guidelines for Effective Strategic Management

1.Keep the process simple and easily understandable. 2.Eliminate vague planning jargon. 3.Keep the process non routine; vary assignments, team membership, meeting formats, settings, and even the planning calendar. 4.Welcome bad news and encourage devil's advocate thinking. 5.Do not allow technicians to monopolize the planning process. 6.To the extent possible, involve managers from all areas of the firm.

Exports of goods and services from the United States account for what percent of U.S. gross domestic product​ (GDP)? In​ contrast, as a percent of gross domestic​ product, exports comprise what percent of the German​ economy?

13.0; 46.0

The new U.S. federal tax law that went into effect in 2018 imposed a one-time ________ percent tax on foreign earnings held offshore in cash accounts, whether the firm brings the cash back to the United States or not.

15.5

What percent tax on foreign earnings held offshore in cash accounts was imposed by new U.S. federal tax law in​ 2018?

15.5

In the corporate​ world, employees reporting any unethical violations they discover or see in the firm receive up to​ ______ percent of the proceeds of legal proceedings against firms for wrongdoing.

25

results of a 7-year study by Fred Kiel, author of "Return on Character," which followed 8,000 employees and 84 top executives of Fortune 500 companies, indicated that character-driven leaders deliver ________ times greater profitability results and ______ percent higher workforce engagement than self-focused leaders. Being unethical is a recipe for headaches, inefficiency, and waste.

5; 26

How many basic types of organizational structure are discussed in the​ chapter?

7

What statement below is​ FALSE? A. Conflict is always bad. B. Conflict may help managers identify problems. C. Conflict can arouse emotions. D. Conflict can serve to energize opposing groups into action. E. Conflict can be managed.

A. Conflict is always bad.

Which statement below is​ FALSE? A. Many companies illegally monitor the social media activities of employees and prospective employees. B. Companies have the legal right to monitor​ employees' conduct and the legal duty to do so only if there is sufficient reason for concern. C. Whenever a company discovers through social media that an employee or potential employee is​ Muslim, disabled,​ gay, or over 40 years old and then denies a promotion or hires someone​ else, that​ "social media discovery​ information" could be the basis of a discrimination suit against the firm. D. It is legal to check your social media accounts during work. E. For a firm to ignore social media communication by employees may be irresponsible.

A. Many companies illegally monitor the social media activities of employees and prospective employees.

The Equal Employment Opportunity Commission​ (EEOC) defines​ ______ broadly as unwelcome sexual​ advances, requests for sexual​ favors, and other verbal or physical conduct of a sexual nature.

sexual harassment

Shares outstanding is similar to...

shares issued (shares issued also include treasury stock)

Market segmentation, target marketing, and product positioning are marketing's most important contributions to ______________________

strategic management

Which of the following statements are​ TRUE? A. About 50 percent of all traffic on the Internet is reportedly​ fake; it is the result of bogus computers programmed to visit websites to take advantage of marketers who typically pay for ads whenever they are loaded when a user visits a webpage. Marketers must pay whether the user is a bogus computer or a real person. B. Although the exponential increase in​ social-media engagement has created huge opportunities for​ marketers, it also has produced severe​ threats; any kind of negative publicity travels fast online. C. About 75 percent of all traffic on the Internet is reportedly​ fake; it is the result of bogus computers programmed to visit websites to take advantage of marketers who typically pay for ads whenever they are loaded when a user visits a webpage. Marketers must pay whether the user is a bogus computer or a real person. D. Millennials include people age 60 and above. E. Millennials spend more time watching television each week than they spend on the​ Internet, listening to the​ radio, and watching movies combined.

B. Although the exponential increase in​ social-media engagement has created huge opportunities for​ marketers, it also has produced severe​ threats; any kind of negative publicity travels fast online.

Which​ statement(s) below is​ FALSE? A. Organizational structure is important for gaining and sustaining competitive advantage. B. The percentage of large companies in the United States with a chief operating officer​ (COO) has declined almost every year for a​ decade, to about 60 percent today. C. A recommended guideline in developing an organizational structure is to avoid having a particular person reporting to more than one person in the chain of command. D. A recommended guideline in developing an organizational structure is to avoid letting a single individual be both chairman of the board and CEO of a company. E. Organizational structure is more a strategy implementation than a strategy formulation issue.

B. The percentage of large companies in the United States with a chief operating officer​ (COO) has declined almost every year for a​ decade, to about 60 percent today.

Which statement below is​ FALSE? A. Among 342 professions in the United​ States, women earn more than men in only nine. B. There are more female CEOs in the United States than male CEOs. C. More women than men earn both undergraduate and graduate degrees in the United States. D. In the United States​ today, the average age for women to get married is 30 years old for those with a college​ degree, and 26 years old for those with only a high school degree. E. On​ average, women, earn 25 percent less than men in the United States.

B. There are more female CEOs in the United States than male CEOs.

Which​ statement(s) below is​ FALSE? A. Restructuring is concerned primarily with shareholder​ well-being rather than employee​ well-being. B. The primary benefit sought from restructuring is cost reduction. C. Restructuring is concerned primarily with employee​ well-being rather than shareholder​ well-being. D. Reengineering does not usually affect the organizational structure. E. Reengineering does not usually affect an organizational chart.

C. Restructuring is concerned primarily with employee​ well-being rather than shareholder​ well-being.

triple-bottom-line approach

success depends on (1) the financial bottom line, (2) the social bottom line, (3) the natural environment bottom line.

What​ country's strategic plan is to develop and use quantum computers to gain world dominance and superiority in information​ technology, financial​ systems, power​ grids, and military​ weapons?

China

Which statement below is​ FALSE? A. Changes in strategy often require changes in an​ organization's structure. B. Symptoms of an ineffective organizational structure include too many meetings being attended by too many people. C. Consumer goods companies tend to emulate the divisional​ structure-by-product form of organization. D. Structure dictates how an​ organization's resources will be allocated. E. Changes in structure often require changes in an​ organization's strategies.

E. Changes in structure often require changes in an​ organization's strategies.

Which statement below is​ FALSE? A. Reengineering does not usually imply job loss or employee layoffs. B. Reengineering is characterized by many tactical​ (short-term, business functiondash-​specific) decisions. C. Reengineering does not usually affect the organizational structure. D. Reengineering does not usually affect an organizational chart. E. Reengineering is an analogous term for benchmarking.

E. Reengineering is an analogous term for benchmarking.

Union membership varies widely across _______, ranging from 74 percent of employees in Finland, 70 percent in Sweden, 67 percent in Denmark, and 8 percent in Lithuania and France

Europe

Step 1 of EPS/EBIT Analysis

Gather the Input Data Needed; Determine the Following Numbers: 1) The dollar amount in capital the firm needs to raise = the total associated costs of recommendations 2) Number of shares outstanding; usually given on a firm's balance sheet 3) Interest rate (%) that funds can be borrowed (use 3 to 5 percent) 4) Tax rate (%) the firm is paying (calculated from a firm's income statement; i.e., taxes or provision for taxes divided by EBT. (Note: in 2018 the US corporate tax rate changed to 21 percent). 5) The dollar amount of EBIT range; use the most recent year EBIT number plus or minus the impact of recommendations to determine a range; select a low, medium, and high dollar amount of EBIT to simulate pessimistic, realistic, and optimistic values for the year ahead.

environment

surroundings in which an organization operates, including air, water, land, natural resources, flora, fauna, humans, and their interrelation

Perform corporate valuation

In the event an offer is received or a rival firm is to be acquired

According to statistics from the United​ Nations, the rate of female participation in the labor force of​ ______ is 35​ percent; this is quite​ low, especially because women make up 42 percent of college graduates in that country. But women in this country with a college degree are expected to let their careers take a back seat to caring for their​ husband, children, and elderly parents. According to Sylvia Ann​ Hewlett, president of the Center for​ Work-Life Policy, a Manhattan think​ tank, "The measures of daughterly guilt are much higher in women in this country than in other​ countries."

India

______ generates about 62 million tons of solid waster every year and that amount is expected to increase fivefold by 2051, so the country is revamping how it handles garbage.

India

countries with the highest bribery rates include

India, Liberia, and Vietnam

Americans tend to use first names instantly in business dealings with​ foreigners, but foreigners find this presumptuous.​ In what country are first names used only among family members and intimate​ friends, with even longtime business associates and coworkers shying away from the use of first​ names?

Japan

Horizontal consistency of objectives

Objectives need to be compatible across functions; for example if marketing wants to sell 10% more, then production must produce 10% more.

Advantages of keeping the​ strategic-planning process secret include which statement​ below?

Participants in a visible strategy process become more attractive to rival​ firms, that may lure them away.

Four reasons to be completely open with the strategy process and resultant decisions are given in the​ chapter; these reasons include all of the following except which​ one?

Participation and openness lead to conciseness and accuracy.

What is the broad term that refers to all other terms listed below. The term can apply to all divisions and departments​ (such as​ "We are an equal opportunity​ employer"), or to a single department​ ("Employees in this department must take at least one training and development course each​ year").

Policies

First activity in the strategy-evaluation process

Reviewing the underlying bases of an organization's strategy

The balanced scorecard was developed by Harvard Business School professors ________ and _______

Robert Kaplan and David Norton.

Develop projected financial statements

Show expected impact of recommendations

​A(n) ______ reveals how a​ firm's operations impact the natural environment. This document discloses to shareholders information about the​ firm's labor​ practices, product​ sourcing, energy​ efficiency, environmental​ impact, and business ethics practices.

sustainability report

Is it true or false that the free Excel strategic planning template at www.strategyclub.com will automatically balance your projected balance​ sheets, but​ 1) you likely will need to make adjustments to the cash​ account, and​ 2) the template does not automatically balance your existing balance​ sheets, i.e. once you enter your​ firm's financial statements into the template​ format, you will need to make adjustments as needed.

True

What university in the USA leads all universities in annual usage of green​ power?

University of Tennessee

In performing​ EPS/EBIT analysis, how is the first row​ (EBIT) determined?

Use the most recent year EBIT number plus or minus the impact of recommendations to determine a range.

In​ EPS/EBIT analysis, from where does the tax rate percentage​ come?

Use the​ company's prior year tax rate as revealed by dividing income before taxes by taxes paid off the​ firm's income statement.

The final strategy-evaluation activity

taking corrective actions, requires making changes to competitively reposition a firm for the future.

glass ceiling

the artificial barrier that women and minorities face in moving into upper levels of management

True or false Strategy-formulation concepts and tools do not differ greatly for small, large, for-profit, or nonprofit organizations, BUT strategy implementation varies substantially among different types and sizes of organizations.

true

true or false A bad sustainability record will hurt the firm in the market, jeopardize its standing in the community, and invite scrutiny by regulators, investors, and environmentalists.

true

true or false An organization should not strictly forbid workplace romance because such a policy could be construed as an invasion of privacy, overbearing, or unnecessary.

true

true or false As the number, size, and diversity of divisions in an organization increase, controlling and evaluating divisional operations become increasingly difficult for strategists in the Strategic Business Unit (SBU) Structure

true

true or false Employees should practice whistle-blowing, and organizations should have policies that encourage whistle-blowing.

true

true or false Merely having a code of ethics, however, is not sufficient to ensure ethical business behavior.

true

true or false Some strategists agree with Ralph Nader, who proclaims that organizations have tremendous social obligations. Friedman may contend that it is irresponsible for a firm to give monies to charity.

true

true or false Strategy evaluation is necessary for all sizes and kinds of organizations.

true

true or false Strategy evaluation is vital to an organization's well-being; timely evaluations can alert management to problems or potential problems before a situation becomes critical.

true

true or false Successful strategy implementation hinges on managers' ability to develop an organizational climate conducive to change.

true

true or false The EPS/EBIT Analysis involves a 4-step process.

true

true or false no social need can be met if the firm fails.

true

Research reveals a ____-shaped relationship between CSR and corporate financial performance, whereby firms with the greatest CSR are generally also the firms with the highest financial performance; firms with the lowest CSR tend to have higher performance than those with moderate social responsibility

u-shaped

Without ________ and ________, strategy-implementation efforts face major problems.

understanding and commitment

To be successful in ______ markets, U.S. managers must obtain a better knowledge of historical, cultural, and religious forces that motivate and drive people in other countries.

world

​In Japan, business relations operate within the context of ​______​, which stresses group harmony and social cohesion. In​ China, business behavior revolves around ​______​, or personal relations. In South​ Korea, activities involve concern for ​______​, or harmony based on respect of hierarchical​ relationships, including obedience to authority.

​Wa; Guanxi; Inhwa

The U.S. Foreign Corrupt Practices Act​ (FCPA) governs​ ______ in the United States and has stepped up enforcement.

bribery

Cultural Differences between U.S. and Foreign Managers

•Americans place an exceptionally high priority on time, viewing time as an asset. Many foreigners place more worth on relationships. •Personal touching and distance norms differ around the world. Americans generally stand about three feet from each other when carrying on business conversations, but Arabs and Africans stand about one foot apart. •Family roles and relationships vary in different countries. •Business and daily life in some societies are governed by religious factors. •Many cultures around the world value modesty, team spirit, collectivity, and patience much more than competitiveness and individualism, which are so important in the United States. •Eating habits differ dramatically across cultures. •Rules of etiquette vary and managers must learn the rules of others. •Americans often do business with individuals they do not know, unlike businesspersons in many other cultures.

Communication Differences Across Countries

•Americans sometimes come across as intrusive, manipulative, and garrulous; this impression may reduce their effectiveness in communication. •Managers from the United States are much more action-oriented than their counterparts around the world; they rush to appointments, conferences, and meetings—and then feel the day has been productive. •U.S. managers often use blunt criticism, ask prying questions, and make quick decisions.

china business climate

•As the world's most populous country, China's economic output annually exceeds the United States. •China ranks about 90th out of 190 countries in terms of doing business. •China accounts for nearly one-third of the global market for cars. •China has a relatively low ranking in ease of doing business because of human rights issues and substantial disregard for copyright, patent, and trademark rules of law. •China has tremendous importance globally because of its economic might.

Some contingency plans commonly established by firms include these elements

•If a major competitor withdraws from particular markets as intelligence reports indicate, what actions should our firm take? •If our sales objectives are not reached, what actions should our firm take to avoid profit losses? •If demand for our new product exceeds plans, what actions should our firm take to meet the higher demand? •If certain disasters occur, what actions should our firm take? •If a new technological advancement makes our new product obsolete sooner than expected, what actions should our firm take?

indonesia business climate

•Indonesia is a democratic Pacific archipelago comprised of thousands of islands. •Indonesia's currency is the rupiah and its economy is one of the fastest growing in Asia, behind China and the Philippines. •Indonesia's G D P growth is 5 percent in 2017. •The economic forecast for Indonesia is very bright. •Despite its large population and densely populated regions, Indonesia has the world's second-highest level of biodiversity, with vast areas of wilderness and abundant natural resources.

Four Challenges Facing Strategists

•Is the process more of an art or a science? •Should strategies be visible or hidden from stakeholders? •Contingency planning •Auditing

india business climate

•Online activity has accelerated in India - in 2017, India replaced the U.S. as the country that downloaded more apps from Google's Play Store than any other on the planet. •India ranks 130 in terms of ease of doing business. •While it ranks the lowest among BRICS nations, India has made substantial progress in some areas.

The underpinnings of strategic management hinge on managers gaining an understanding of...

competitors, markets, prices, suppliers, distributors, governments, creditors, shareholders, and customers worldwide.

Despite its complexity, the matrix structure is widely used in many industries, such as:

construction, health care, research, and defense

The balanced scorecard is a strategy evaluation and _____technique.

control

The term corporate wellness has largely been replaced with ___________________,

corporate well-being

Four reasons why some firms prefer to conduct strategic planning in secret and keep strategies hidden from all but the highest-level executives are as follows:

1) Free dissemination of a firm's strategies may easily translate into competitive intelligence for rival firms who could exploit the firm given that information. 2) Secrecy limits criticism, second-guessing, and hindsight. 3) Participants in a visible strategy process become more attractive to rival firms who may lure them away. 4) Secrecy limits rival firms from imitating or duplicating the firm's strategies and undermining the firm.

reasons to establish guidelines and policies that address workplace romance

1) Guidelines can enable the firm to better defend against and avoid sexual harassment or discrimination charges. 2) Guidelines can specify reasons (such as the seven listed previously) why workplace romance may not be a good idea. 3) Guidelines can specify resultant penalties for romancing partners if problems arise. 4) Guidelines can promote a professional and fair work atmosphere. 5) Guidelines can help assure compliance with federal, state, and local laws, as well as recent court cases. 6) Lack of any guidelines sends a lackadaisical message throughout the firm.

The top 10 Best Corporate Citizens for 2017 were as follows:

1) Hasbro 2) Intel 3) Microsoft 4) Altria Group 5) Campbell's Soup Company 6) Cisco Systems 7) Accenture 8) Hormel Foods 9) Lockheed Martin 10) Ecolab

principles of good governance (BusinessWeek)

1) Never have more than two of the firm's executives (current or past) on the board. 2) Never allow a firm's executives to serve on the board's audit, compensation, or nominating committee. 3) Require all board members to own a large amount of the firm's equity. 4) Require all board members to attend at least 75 percent of all meetings. 5) Require the board to meet annually to evaluate its own performance, without the CEO, COO, or top management in attendance. 6) Never allow the CEO to be chairperson of the board. 7) Never allow interlocking directorships (where a director or CEO sits on another director's board).

The Top 20 College Football Programs in Terms of Monetary Value (in millions of $)

1) Ohio State1 ($1,511) 2) Texas ($1,243) 3) Oklahoma ($1,002) 4) Alabama, SEC ($930) 5) LSU, SEC ($911) 6) Michigan ($893) 7) Notre Dame ($857) 8) Georgia, SEC ($822) 9) Tennessee, SEC ($756) 10) Auburn, SEC ($724) 11) Florida, SEC ($682) 12) Penn State ($550) 13) Texas A&M, SEC ($523) 14) Nebraska ($508) 15) South Carolina, SEC ($484) 16) Iowa ($484) 17) Arkansas, SEC ($456) 18) Wisconsin ($439) 19) Washington ($434) 20) Florida State ($385)

5 steps of perceptual mapping

1) Select key criteria that effectively differentiate products in the industry. Specifically, consider the key characteristics of your brand offerings that provide unique value to your target customers. 2) Diagram a two-dimensional product-positioning map with specified criteria on each axis. 3) Plot major competitors' brands in the resultant four-quadrant matrix. 4) Assess whether your brand's location in the matrix is ideal, especially relative to competitors. That is, consider whether your brand's position, as perceived by consumers, offers unique value. 5) Reposition your brand's offering as needed to shift consumers' perceptions of the brand to a location that provides a competitive advantage over rival brands.

2 reasons changes in strategy often require changes in the way an organization is structured

1) Structure largely dictates how objectives and policies will be established 2) Structure dictates how resources will be allocated

Four methods are often used to determine the monetary value of a company (corporate valuation)

1) The Net Worth Method 2) The Net Income Method 3) Price-Earnings Ratio Method 4) Outstanding Shares Method

benefits of reshoring

1) U.S. laws protect female and minority employees 2) Reliable energy at low cost 3) Excellent security to protect designs from overseas copycats 4) Enable closer tabs on quality control and supply chains 5) Excellent economy with consumers purchasing more 6) Less shipment costs with consumers nearby 7) Excellent human rights, education, legal, and political systems that promote freedom and opportunity for citizens 8) Capitalize on the new 21 percent corporate tax rate

Resources allocation...

1) central management activity that allows for strategy execution 2) Strategic management enables resources to be allocated according to priorities established by annual objectives

characteristics of objectives

1) measurable 2) consistent 3) reasonable 4) challenging 5) clear 6) communicated 7) timely 8) accompanied by commensurate rewards and sanctions 9) specific

3 P's that explain organizational performance

1) people 2) planet 3) profit

A sustainability report...

1) reveals how a firm's operations impact the natural environment. 2) discloses to shareholders information about the firm's labor practices, product sourcing, energy efficiency, environmental impact, and business ethics practices

Policies are essential instruments for strategy implementation for at least six reasons:

1) set boundaries, constraints, and limits on the kinds of administrative actions that can be taken to reward and sanction behavior. 2) let both employees and managers know what is expected of them, thereby increasing the likelihood that strategies will be implemented successfully. 3) provide a basis for management control and allow coordination across organizational units. 4) reduce the amount of time managers spend making decisions; clarify what work is to be done and by whom. 5) promote delegation of decision making to appropriate managerial levels where various problems usually arise. 6) clarify what can and cannot be done in pursuit of an organization's objectives.

Disadvantages of a Functional Organizational Structure

1. Accountability forced to the top 2. Delegation of authority and responsibility not encouraged 3. Minimizes career development 4. Low employee and manager morale 5. Inadequate planning for products and markets 6. Leads to short-term, narrow thinking 7. Leads to communication problems

Corrective Actions Possibly Needed to Correct Unfavorable Variances

1. Alter the firm's structure. 2. Replace one or more key individuals. 3. Divest a division. 4. Alter the firm's vision or mission. 5. Revise objectives. 6. Alter strategies. 7. Devise new policies. 8. Install new performance incentives. 9. Raise capital with stock or debt. 10. Add or terminate salespersons, employees, or managers. 11. Allocate resources differently. 12. Outsource (or reshore) business functions.

Seven Principles of Admirable Business Ethics

1. Be trustworthy; no individual or business wants to engage in business with an organization it does not trust 2. Be open-minded, continually asking for "ethics-related feedback" from all internal and external stakeholders. 3. Honor all commitments and obligations. 4. Avoid misrepresenting, exaggerating, or misleading with print materials, actions, or words. 5. Visibly be a responsible community citizen. 6. Use your accounting practices to identify and eliminate questionable activities. 7. Follow the Golden Rule: "Do unto others as you would have them do unto you."

india business culture

•People in India do not like to say "no," verbally or nonverbally. •Rather than disappoint you, they often will say something is not available, or will offer you the response that they think you want to hear, or will be vague with you. •Do not disagree publicly with anyone in India •Titles such as professor, doctor, or engineer are important in India, as is a person's age, university degree, caste, and profession. •Indians prefer to do business with those whom they have established a relationship built upon mutual trust and respect. •Punctuality is important. •Indians generally do not trust the legal system and someone's word is often sufficient to reach an agreement. •Use the right hand to give and receive business cards. •Business cards need not be translated into Hindi •Always present your business card so the recipient may read the card as it is handed to him or her.

japan business culture

•The Japanese place great importance on group loyalty and consensus, a concept called Wa. •When confronted with disturbing questions or opinions, Japanese managers tend to remain silent.

mexico business climate

•The country of Mexico is now the fourth-largest auto exporter in the world, behind Japan, Germany, and South Korea. •Mexico auto industry now employs one of every six Mexican factory workers and comprises one third of all exports from Mexico. •Foreign direct investment (F D I) in Mexico has surged to exceed $30 billion annually. •Mexico is especially attractive for manufacturing products that are bulky or costly to transport, such as automobiles.

outstanding shares method is also called

1) book value 2) market value 3) market capitalization

Strategic marketing issues

1.How to make advertisements more interactive to be more effective 2.How to take advantage of social-media conversations about the company and industry 3.To use exclusive dealerships or multiple channels of distribution 4.To use heavy, light, or no TV advertising versus online advertising 5.To limit (or not) the share of business done with a single supplier or business customer 6.To be a price leader or a price follower 7.To offer a complete or limited warranty 8.To extend an existing product line or create a new line of products

Reviewing the underlying bases of an organization's strategy could be approached by developing a revised ____ Matrix and ____ Matrix.

EFE; IFE

What is another term for​ profits?

Earnings

Who asserts that organizations have no obligation to do any more for society than is legally required?

Milton Friedman

Controls need to be _______-oriented rather than information-oriented

action

The strategic-management process is conceptually the same for multinational firms as for purely domestic firms except the process is

more complex for international firms as a result of more variables and relationships.

The divisional structure can be organized by​ ____.

process or customer

Linking Performance and Pay to Strategies

•Decisions on salary increases, promotions, merit pay, and bonuses need to support the long-term and annual objectives of the firm •Gain sharing and bonus systems can be used

Most companies have both ___ and ____

"carrots," such as giving employee discounts on insurance premiums or even extra cash; "sticks," such as imposing surcharges on premiums for those who do not make progress toward getting healthy.

Linneman and Chandran suggest that effective contingency planning involves a five-step process:

1) Identify both good and bad events that could jeopardize strategies. 2) Determine when the good and bad events are likely to occur. 3) Determine the expected pros and cons of each contingency event. 4) Develop contingency plans for key contingency events. 5) Determine early warning trigger points for key contingency events

Four reasons to be primarily open with the strategy process and resultant decisions are these:

1) Managers, employees, and other stakeholders can readily contribute to the process. They often have excellent ideas. Secrecy would forgo many excellent ideas. 2) Investors, creditors, and other stakeholders have greater basis for supporting a firm when they know what the firm is doing and where the firm is going. 3) Visibility promotes democracy, whereas secrecy promotes autocracy. Domestic firms and most foreign firms prefer democracy over autocracy as a management style. 4) Participation and openness enhance understanding, commitment, and communication within the firm.

four practices recommended by Donald Palmer to minimize and deter ethical wrongdoings

1) Punish wrongdoing swiftly and severely when detected. 2) Hire employees who possess high ethical standards. 3) Develop socialization programs to reinforce desired cultural values. 4) Encourage subordinates to challenge questionable orders from superiors.

Oceans cover more than​ ______ percent of the earth.

71

There is great variation across Europe with regard to levels of union​ membership, ranging from​ ______ percent of employees in Finland to​ ______ percent in France.

74; 8

Fully​ ___ percent of the​ world's population lives outside the United​ States, and this group is growing​ ___ percent faster than the U.S. population.

95; 70

Which​ term(s) below would not be a good annual​ objectives?

Add new suppliers as soon as possible.

an ever-growing number of firms today are outsourcing their product design to _______ developers.

Asian

According to​ Schein, what statement below is not included as a useful element in linking culture to​ strategy?

Benchmarking

the top national statutory corporate tax rates in 2018 among sample countries ranged from 0 percent in _______ to 55 percent in the ___________________

Bermuda; United Arab Emirates (UAE)

Does this textbook advocate a​ top-down or​ bottom-up approach to strategic​ planning?

Bottom-up

Who is a big advocate for economies of​ scale, arguing that growth for the sake of growth is a misguided​ strategy? He suggests firms should be careful not to venture into areas outside their corporate​ strategy; instead, they should deploy resources into areas that will build economies of scale.

CEO of JPMorgan Jamie Dimon

What country ranks about 90th out of 190 countries in terms of doing business due to​ human-rights' issues and substantial disregard for​ copyright, patent, and trademark rules of​ law?

China

​______ requires many firms to share their technological knowledge as a condition of doing business​ there; this is a growing problem for U.S. firms and America in general.

China

vertical consistency of objectives

Compatibility of objectives from the CEO (corporate level) down to the Presidents (divisional level) on down to the Managers (functional level).

The​ strategy-evaluation process includes three basic activities. Which​ activity(s) below is not one of the​ three?

Develop a clear vision and mission.

Chapter​ 8's exemplary​ strategist, Jamie​ Dimon, CEO of JP​ Morgan, is a big advocate for economies of scale. What does Dimon advice regarding​ this?

Firms should be careful not to venture into areas outside their corporate strategy.

Who is featured at the beginning of the chapter as a most​ "exemplary strategist?"

Former CEO of​ PepsiCo, Indra Nooyi Fortune's second-most powerful woman in business in the U.S. in 2017

Which publication annually publishes the​ "World's Most Admired​ Companies," which provides helpful​ strategy-evaluation information?

Fortune

When evaluating​ strategies, GAAP stands for what​ term?

Generally Accepted Accounting Principles

When evaluating​ strategies, GAAS stands for what​ term?

Generally Accepted Auditing Standards

The entertainment and media industries were recently rocked by sexual harassment allegations against these public figures

Harvey Weinstein, Kevin Spacey, Louis C. K., Mark Halperin, Charlie Rose, Matt Lauer, and Garrison Keillor.

_____ generates about 62 million tons of solid waste every​ year, and that amount is expected to increase fivefold by 2051. Currently only about 28 percent of the​ country's garbage is treated and processed.

India

Currently only about 28 percent of ______'s garbage is treated and processed out of the 82 percent that is actually collected.

India's

According to Chapter​ 10, which of the following actions is​ unethical?

Insider trading and overpricing

Step 3 of EPS/EBIT Analysis

Insert Numbers in the Table Following These Row-by-Row Steps/Guidelines: 1) For the $ EBIT row, select a pessimistic (low), realistic (medium), and optimistic (high) $ amount for EBIT based on the previous year EBIT plus what you expect your recommendations to yield; use large ranges to get variation; place these three $ EBIT numbers across the EBIT row under each capital structure scenario; thus place the three numbers three times across that first row. 2) For the $ Interest row, in the three All-Stock columns, place zeros because no new interest will be paid if the firm elects to use the All-Stock approach. In the interest row for the All-Debt columns, multiply the $ capital needed times the interest rate and place the resultant amount in the three All-Debt columns. Similarly, in the 50-50 Combo columns, multiply the $ capital needed (50% of total) times the interest rate and place the resultant amount in the 50-50 Combo columns. (Note: Change the percentage if using a different combination such as 70-30 stock-debt). 3) For the $ EBT row, subtract row 2 from row 1, in each respective column. 4) For the $ Taxes row, multiply row 3 by the tax percentage, in each respective column. 5) For the $ EAT row, subtract row 4 from row 3, in each respective column. 6) For the # Shares Issued row, in the three All-Stock columns, divide the $ capital needed by the stock price and add that number to the existing number of shares outstanding and place the resultant number in the All-Stock columns. In the three All-Debt columns, simply place the existing number of shares outstanding number because no new shares are being added. In the three 50-50 Combo columns, multiply the $ capital needed by 50 percent; then divide this number by the stock price and add the resultant number to the existing number of shares outstanding to determine the number in the 50-50 Combo columns. (Note: Change the percentage if using a different mix of stock versus debt.) 7) For the $ EPS row, divide row 5 by row 6, in each respective column. Take notice of which EPS values are highest along the row for each capital structure scenario. The highest EPS values reveal the best financing decision. If the EPS values are the same or nearly the same across the bottom row for the same level of EBIT, then the amount of funds raised may be too low to reveal significant differences based on the current interest rates or stock price, or the EBIT range may be too narrow. If you are recommending strategies that require high capital requirements, there should be differences in EPS values between All-Debt and All-Stock for the same level of EBIT.

When evaluating​ strategies, IFRS stands for what​ term?

International Financial Reporting Standards

When a firm buys more of its own common​ stock, what is the effect on the​ firm's earnings per share​ (EPS) value?

It goes up.

Which statement below is not a guideline for effective strategic​ planning, according to R. T.​ Lenz?

It should contain vague planning jargon.

_____________ claims that successful strategic planning has more to do with heart than mind. This means recognize people, admit you do not have all the answers, value others' expertise and experiences, provide people a platform to contribute, applaud people for their contributions, and basically let people know you care

Jamie Dimon

Countries with the lowest bribery rates include

Japan, Hong Kong, South Korea, Mauritius, Botswana, and Cyprus

Which statement below is not a guideline for developing an organizational​ chart?

Make sure only presidents of divisions report to the CEO. OR Reserve the title president for the CEO of the firm.

Which of the following sequences of marketing activities is​ correct?

Market​ segmentation, target​ marketing, product positioning

What type of structure is the most complex of all the organizational designs or​ structures?

Matrix

What is the second of the three​ strategy-evaluation activities?

Measure organizational performance.

Second activity in the strategy-evaluation process

Measuring Organizational Performance

What country is an authoritarian society in terms of​ schools, churches,​ businesses, and families where employers seek workers who are​ agreeable, respectful, and obedient rather than​ innovative, creative, and​ independent?

Mexico

What country is especially attractive for manufacturing products that are bulky or costly to​ transport, such as​ automobiles? A key variable hurting this country is​ drug-related violence since its homicide rate exceeds 15 people per​ 100,000, compared with a​ per-capita rate of about 5.0 in the United States and 1.1 in China.

Mexico

The Net Income Method

Net Income × Five

The World Bank and the International Finance Corporation annually rank 189 countries in terms of their respective ease of doing business. The index ranks nations from 1​ (best) to 189​ (worst). What country is​ #1?

New Zealand

A​ full-blown example of a projected financial statement analysis is worked out and presented in Chapter 8 for​ _____.

P&G

Perceptual mapping is a marketing tool associated with​ _____.

Product positioning

The marketing mix variables include what aspects of a product​ offerings?

Product, place,​ promotion, price

​______ refers to countries imposing​ tariffs, taxes, and regulations on firms outside the country to favor their own companies and people.

Protectionism

Who proclaims that organizations have tremendous social obligations?

Ralph Nader

____to change regularly occurs in organizations in the form of sabotaging production machines, absenteeism, filing unfounded grievances, and an unwillingness to cooperate.

Resistance

In developing projected financial​ statements, with what row item does one​ start?

Revenues

According to Table​ 8-5 in Chapter​ 8, what are the three most corrupt countries in the​ world?

Somalia, South​ Sudan, North Korea

According to Chapter​ 10, a country with one of the lowest bribery rates is​ ______ and a country with one of the highest bribery rates is​ ______.

South​ Korea; India

What company is featured in Ethics Capsule 10 as being exemplary in the shoe​ business, aiming to put shoes on every child on the planet and donating a pair of shoes for every pair it​ sells?

TOMS​ Shoes, Inc.

​_____ is the third​ strategy-evaluation activity.

Take corrective actions.

____ ______ in countries are important in strategic decisions regarding where to build manufacturing facilities or retail stores or even where to acquire other firms.

Tax rates

The _____________________________ is the most complex structure of all designs because

The Matrix Structure; it depends upon both vertical and horizontal flows of authority and communication

capital structure.

The proportion of debt to equity on a balance sheet

As discussed in Chapter​ 10, what do the following people have in​ common: Harvey​ Weinstein, Kevin​ Spacey, C. K.​ Louis, Mark​ Halperin, Charlie​ Rose, Matt​ Lauer, and Garrison​ Keillor?

They all were implicated in sexual harassment allegations.

Issue corporate bonds (IPOs)

This is analogous to going to the bank and borrowing money, except that with bonds, the company obtains funds from investors rather than banks.

code of busines ethics

To ensure that the code of ethics is read, understood, believed, and remembered, periodic ethics workshops are needed to sensitize people to workplace circumstances in which ethics issues may arise.

The __________ cut its top statutory corporate tax in 2018 to 21 percent, the lowest rate among the Group of Seven (G7) nations

United States

The year 2017 was the seventh straight year that a record dollar value of bonds was sold in the ___________, totaling more than $1.5 trillion.

United States

​______ refers to employees reporting any unethical violations they discover or see in the firm.

Whistle-blowing

Conflict can be defined as

a disagreement between two or more parties on one or more issues

bribe

a gift bestowed to influence a recipient's conduct The gift may be any money, goods, actions, property, preferment, privilege, emolument, object of value, advantage, or merely a promise or undertaking to induce or influence the action, vote, or influence of a person in an official or public capacity.

ISO 14001

a set of standards adopted by thousands of firms worldwide to certify to their constituencies that they are conducting business in an environmentally friendly manner offers a universal technical standard for environmental compliance that more and more firms are requiring not only of themselves but also of their suppliers and distributors.

Several finance and accounting concepts central to strategy implementation:

acquiring needed capital, developing projected financial statements, preparing financial budgets, and evaluating the worth of a business.

social responsibility

actions an organization takes beyond what is legally required to protect or enhance the well-being of living things

Wa requires that...

all members of a group agree and cooperate; this results in constant discussion and compromise

The most important strategic decision facing large companies annually:

allocating resources across business segments (divisions)

Contingency plans can be defined as...

alternative plans that can be put into effect if certain key events do not occur as expected.

ISO 14001 results in

an Environmental Management System (E M S)

people today are especially ________ of firms that conduct operations in a way that mends, conserves, and preserves the natural environment.

appreciative

market segmentation

areas in a perceptual map where there is a cluster of ideal points indicating an attractive group of potential customers to target

Mintzberg's notion of "crafting" strategies embodies the ______model, which suggests that strategic decision making be based primarily on holistic thinking, intuition, creativity, and imagination.

artistic

Developed in the early 1990s by Harvard Business School professors Robert Kaplan and David Norton and refined continually since​ then, the​ ______ is a​ strategy-evaluation and control technique.

balanced scorecard

The basic premise of​ ______ is that firms should establish objectives and evaluate strategies on criteria other than using only financial measures.

balanced scorecard

Why is evaluating the worth of a business central to strategy implementation

because firms acquire other firms, divisions of other firms, or even divest part of their own firm.

For the first time ever in the United States, cars, trucks, planes, and trains have displaced power plants as the _______ polluters.

biggest

The _________________ of countries no longer can define the limits of our imaginations. To see and appreciate the world from the perspective of others has become a matter of survival for businesses.

boundaries

Measuring Organizational Performance includes

comparing expected results to actual results, investigating deviations from plans, evaluating individual performance, and examining progress being made toward meeting stated objectives.

An excellent capital structure can be a __________ _________

competitive advantage

EPS/EBIT Analysis involves an examination of the impact that _____ versus _______ financing has on EPS under various expectations for EBIT, given specific recommendations (strategies to be implemented).

debt; stock

Mintzberg refers to strategic planning as an "emergent" process, whereas strategy scientists use the term _______________process.

deliberate

Annual objectives are....

desired milestones an organization should achieve to ensure successful strategy implementation.

Consumers globally are becoming increasingly intolerant of any business or nation that directly or indirectly _______wildlife, especially endangered wildlife, such as tigers, elephants, whales, songbirds, and coral reefs.

destroys

Performing an EPS/EBIT analysis is a common way to _______ the appropriate capital structure needed.

determine

Outstanding Shares Method

determine the cash worth of a firm # of Shares Outstanding × Stock Price

In general, company guidelines or policies in general should _____________ workplace romance because "the downside risks generally exceed the upside benefits" for the firm.

discourage

Resource allocation can be defined as.....

distributing an organization's "assets" across products, regions, and segments according to priorities established by annual objectives.

second-most common structure

divisional (decentralized) structure

An organization can perhaps be most __________ when its workforce mirrors the diversity of its customers.

effective

whistle blowing

employees reporting any unethical violations they discover or see in the firm

Conflict can serve to _______ opposing groups into action and may help managers identify problems.

energize

Structure should be designed to ____________ the strategic pursuit of a firm and, therefore, follow strategy.

facilitate

The valuation of a firm's worth is based on _________, but common sense and good judgment enter into the process.

financial facts

Whereas intangibles include copyrights, patents, and trademarks, ______ arises when a firm acquires another firm and pays more than the book value for that firm.

goodwill

board of directors

group of individuals at the top of an organization with oversight and guidance over management and who look out for shareholders' interests.

Functional structure

groups tasks and activities by business function, such as production/operations, marketing, finance/accounting, research and development, and management information systems

In China, business behavior revolves around ______, or personal relations.

guanxi

A matrix structure can result in ______ overhead because it creates more management positions.

higher

Consumers expect _______ treatment of animals.

humane

global strategy

includes designing, producing, and marketing products with global needs in mind, instead of considering individual countries alone

In South Korea, activities involve concern for _________, or harmony-based on respect of hierarchical relationships, including obedience to authority.

inhwa

China and India have become important suppliers of ________ property

intellectual

The existence or prevalence of ___________ can be an important factor in many strategic decisions, such as where to locate stores or factories because companies often like to avoid these.

labor unions

A disadvantage of a functional structure is​ it____.

leads to poor delegation of authority.

Positioning entails designing a ___________________ that offers unique value to target customers

marketing mix

In contrast to strategy​ formulation, strategy implementation focuses more on​ _____.

motivation skills rather than analytical skills

For ___________ firms, knowledge of business culture variation across countries can be essential for gaining and sustaining competitive advantage.

multinational

Why are tradeoffs necessary when establishing objectives?

no firm has sufficient resources to pursue all strategies that would benefit the firm.

Generally​ speaking, in​ Europe, the farther​ ______ on the​ continent, the more participatory the management style.

north

reengineering does not usually affect the ___________________ structure or chart, nor does it imply job loss or employee layoffs

organizational

For the first time ever in the United​ States, cars,​ trucks, planes, and trains have displaced​ _____ as the biggest USA polluter.

power plants

business ethics

principles of conduct within organizations that guide decision making and behavior

Hundreds of companies annually hold initial public offerings (IPOs) to move from being _______ to being _______.

private; public

marketing mix variables (4 P's)

product, place, promotion, and price

Linneman and Chandran report that contingency planning gives users like​ DuPont, Dow​ Chemical, Consolidated​ Foods, and Emerson Electric three major benefits. It enables​ _____.

rapid responses to​ change, prevents panic in crisis situations and make managers more adaptable

reengineering involves...

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

Employees, consumers, governments, and society are especially ______ of firms that harm rather than protect the natural environment.

resentful

Strategic management itself is sometimes referred to as a _______________________

resource-allocation process

In all but the smallest organizations, the transition from strategy formulation to strategy implementation requires a shift in _______________ from strategists to divisional and functional managers.

responsibility

The practice of hiring employees from rival firms has a long tradition, but increasingly in our lawsuit-happy environment, firms must consider whether that person(s) had access to the "secret sauce formula, customer list, programming algorithm, or any proprietary or confidential information" of the ____firm.

rival

This book is consistent with most of the strategy literature in advocating that strategic management be viewed more as a ______than an art

science

companies engage in market ________ first, then target _______, and then ______ products among industry offerings.

segmentation; marketing; position

Divisions are sometimes referred to as

segments, profit centers, or business units.

Managers and employees are motivated more by perceived ___________________than by organizational interests, unless the two coincide.

self-interests

"Going public" with an IPO means

selling off a percentage of a company to others to raise capital; this action dilutes the owners' control of the firm.

Good business ethics is a prerequisite for good ______________

strategic management

sustainability

the extent that an organization's operations and actions protect, mend, and preserve rather than harm or destroy the natural environment

the balanced scorecard technique is based on

the need to "balance" financial measures with nonfinancial ones.

Shares authorized are...

the number of shares a firm has approval to issue in total

bribery

the offering, giving, receiving, or soliciting of any item of value to influence the actions of an official or other person in discharge of a public or legal duty

culture

the set of shared values, beliefs, attitudes, customs, norms, personalities, heroes and heroines that describe a firm

Resistance to change may be the single greatest _________ to successful strategy implementation.

threat

Limitations of​ EPS/EBIT analysis include​ ______.

timing and control

Implementing strategy affects an organization from _____ to ______, including all the functional and divisional areas of a business.

top to bottom

The corporate valuation formula for the net worth method is​ _____.

total​ shareholders' equity​ (SE) minus​ (goodwill +​ intangibles).

The shares of stock of a firm that are owned by the firm itself are called​ _____.

treasury stock

True or false As a small organization grows, Divisional structures have more difficulty managing different products and services in different markets.

true

True or false In developing an organizational chart, avoid having a particular person reporting to more than one person in the chain of command (except in a matrix structure)

true

True or false The steps outlined for preparing projected financial statements apply equally to nonprofit organizations

true

Corporate tax rates _____ considerably across countries and companies.

vary

The Affordable Care Act increased the maximum incentives and penalties employers may use to encourage employee

well-being

environmental management system

when a firm operates utilizing "green" policies/practices/procedures as outlined by ISO 14001

Three important business ethics topics of current importance

whistle-blowing, bribery, and workplace romance.

china business culture

•The Chinese rarely do business with companies or people they do not know. •Your position on an organizational chart is extremely important in business relationships. •Arriving late to a meeting is an insult and could negatively affect your relationship. •Meetings require patience because mobile phones ring frequently and conversations tend to be boisterous. •Greetings are formal and the oldest person is always greeted first •Like in the United States, handshakes are the most common form of greeting

Determine capital structure

•acquire needed capital to implement strategies •Perform EPS/EBIT analysis

exports comprise ___ percent of the German economy (GDP)

46

Auditing

"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"

All organizations have at least four types of resources (or assets) that can be used to achieve desired objectives:

(1) financial resources (2) physical resources (3) human resources (4) technological resources

7 types of organizational structure:

(1) functional (2) divisional-by-region (3) divisional-by-product (4) divisional-by-customer (5) divisional-by-process (6) strategic business unit (SBU) (7) matrix

The top national statutory corporate tax rates in 2018 among sample countries ranged from​ ______ percent in Bermuda to​ ______ percent in the United Arab Emirates​ (UAE).

0; 55

Seven human resource issues:

1.Linking performance and pay to strategy 2.Balancing work life with home life 3.Developing a diverse work force 4.Using caution in hiring a rival's employees 5.Creating a strategy-supportive culture 6.Using caution in monitoring employees' social media 7.Developing a corporate wellness program

7 steps for projected financial analysis

1.Prepare the projected income statement before the balance sheet. 2.Use the percentage-of-sales method to project cost of goods sold (CO G S) and the expense items in the income statement. 3.Calculate the projected net income. 4.Subtract from the net income any dividends to be paid for that year. 5.Project the balance sheet items, beginning with retained earnings and then forecasting stockholders' equity, long-term liabilities, current liabilities, total liabilities, total assets, fixed assets, and current assets (in that order). 6.Use the cash account as the plug figure. 7.List commentary (remarks) on the projected statements.

Reasons Annual Objectives are essential for strategy implementation:

1.Represent the basis for allocating resources 2.Are a primary mechanism for evaluating managers 3.Are the major instrument for monitoring progress toward achieving long-term objectives 4.Establish organizational, divisional, and departmental priorities 5.Are essential for keeping a strategic plan on track

The trend in the United States is toward much greater board member accountability with smaller boards, now averaging_______members rather than 18 as they did a few years ago.

11

Exports of goods and services from the United States account for only ____ percent of U.S. gross domestic product (GDP).

13

A Wall Street Journal article recapped U.S. standards regarding​ boss-and-subordinate love affairs at work. Only​ ______ percent of all firms sampled had no restrictions on such​ relationships; ______ percent of firms have policies that prohibit relationships between a supervisor and a subordinate.

5; 80

About ______ percent of the cash repatriated by companies is going towards stock buybacks and paying dividends, with the remaining amount going to investments in company infrastructure and employees.

70

What percent of cash repatriated by U.S. companies in going towards stock buybacks and dividend​ payouts, as opposed to investments in employees and company​ infrastructure?

70

Which statement below is​ FALSE? A. Successful companies have a voracious hunger for facts. B. Successful companies see information where others see only data. C. Successful companies maintain loose financial controls. D. The people at successful companies​ don't regard controls as an imposition of autocracy but as the benign checks and balances that allow them to be creative and free. E. Successful companies treat facts as friends and controls as liberating.

C. Successful companies maintain loose financial controls.

What formula below is correct for valuing a company using the​ price-earnings ratio​ method?

Divide the market price of the​ firm's common stock by the annual earnings per share​ (EPS) and multiply this number by the​ firm's average net income for the past 5 years.

Which statement below is​ FALSE? A. ​Mintzberg's notion of​ "crafting" strategies embodies the artistic​ model, which suggests that strategic decision making be based primarily on holistic​ thinking, intuition,​ creativity, and imagination. B. This textbook is consistent with most of the strategy literature in advocating that strategic management be viewed more as a science than an art. C. Firms need to systematically assess their external and internal​ environments, conduct​ research, carefully evaluate the pros and cons of various​ alternatives, perform​ analyses, and then decide on a particular course of action. D. The Mintzberg​ strategic-planning approach insists on​ informality, whereas strategy scientists​ (and this​ text) insist on more formality. E. This textbook is framed primarily on the fact that strategic planning is an art rather than a science.

E. This textbook is framed primarily on the fact that strategic planning is an art rather than a science.

______ is the characteristic of ensuring that​ long-term strategic objectives and plans are established and that the proper management structure is in place to achieve those​ objectives, while at the same time making sure that the structure functions to maintain the​ corporation's integrity,​ reputation, and responsibility to its various constituencies.

Goverance

Step 4 of EPS/EBIT Analysis

Graph Your EPS/EBIT Analysis: Simply place the top row ($ EBIT) on the x-axis and place the bottom row ($ EPS) on the y-axis. Then, plot three resultant lines for All-Stock, All-Debt, and 50-50 Stock-Debt Combo, respectively. The highest line in the graph reveals the highest EPS that maximizes shareholder value; select this highest EPS financing option unless you have a compelling reason(s) to overturn this decision as per limitations of this analysis

______ corporate tax rates deter investment in new factories and also provide strong incentives for corporations to avoid and evade taxes.

High

future shock

High anxiety that results when the nature, types, and speed of changes overpower an individual's or organization's ability and capacity to adapt.

What can lead to conflict?

Honest differences of opinion, turf protection, and competition for limited resources

What country does the following​ describe? This country is a democratic Pacific archipelago comprised of thousands of islands. Its currency is the rupiah and its economy is one of the​ fastest-growing in Asia. This​ country's s GDP growth was 5 percent in 2017 and it continues to grow. Exports are surging. This country has a large population and densely populated regions. It has the​ world's second-highest level of​ biodiversity, with vast areas of wilderness and abundant natural resources.

Indonesia

Outsourcing

Involves companies hiring other companies to take over various parts of their functional operations, such as human resources, information systems, payroll, accounting, customer service, and even marketing.

This is a primary reason why divisional and functional managers should be involved as much as possible in both strategy-formulation and strategy-implementation activities:

Managers and employees are motivated more by perceived self-interests than by organizational interests

steps to develop an organizational chart

Step 1. List executive positions by title and number. Numbering positions enables numbers, rather than boxes or circles, to be used in a structure diagram to reveal reporting relationships; it is just easier to use numbers. Step 2. Using numbers to denote positions, devise your chart to show reporting relationships, consistent with guidelines presented in this chapter. Step 3. Draw lines connecting numbers to reveal reporting relationships. Be mindful that a line connecting one number to another means that person reports to the other; so do not connect, for example, a CFO to a CMO.

governance

The act of oversight and direction

The Net Worth Method

Total Shareholders' Equity (S E) minus (Goodwill + Intangibles)

The ISO 14000 family of standards

concerns the extent to which a firm minimizes harmful effects on the environment caused by its activities and continually monitors and improves its own environmental performance.

Any organization is only as good as its ___________

people

The U.S. and China in early 2018 are imposing tariffs on each other's products imported as a part of _______

protectionism

true or false Different valuation methods will yield different totals for a firm's worth. Evaluating the worth of a business truly requires both qualitative and quantitative skills.

true

____ percent of the Singapore economy (GDP)

172

___ percent of the Chinese economy (GDP)

20

What are the corporate tax rate percentages in the United​ States, Mexico, and​ Canada, respectively?

21; 30; 26.5

Most financial institutions require at least ______ years of projected financial statements whenever a business seeks capital.

3

A​ seven-year study by Fred​ Kiel, author of Return on Character​, followed​ 8,000 employees and 84 top executives of Fortune 500​ companies; the study indicated that​ character-driven leaders deliver​ ______ times greater profitability results than​ self-focused leaders.

5

Which statement below is​ FALSE? A. No department should fail to cooperate with another in evaluating strategies. B. Complex​ strategy-evaluation systems often confuse people and accomplish little. C. Managers in small companies often communicate daily with each other and their employees D. Strategy evaluations should be simple but cumbersome and restrictive. E. Small companies do not need extnsive evaluative reporting systems.

D. Strategy evaluations should be simple but cumbersome and restrictive.

Green power is​ _____.

renewable, such as​ wind, solar, and water

africa business climate

•About 30 African countries are considered democracies. •Currencies in Africa are stabilizing and many countries are fund-raising to build modern highways, ports, and power grids. •Many African and non-African companies are launching operations in Africa due to the rapidly growing middle class and an average G D P growth of 5 percent for the continent through 2020. •McKinsey predicts that by 2025, 50 percent of Africa will be online. •The general stereotype of Africa is rapidly changing from subsistence farmers avoiding lions, to millions of smartphone-carrying consumers in cities purchasing products.

mexico business culture

•Employers seek workers who are agreeable, respectful, and obedient, rather than innovative, creative, and independent. •Mexican employers are paternalistic, providing workers with more than a paycheck, but in return they expect allegiance. •Mexico is an authoritarian society in terms of schools, churches, businesses, and families.

Cultural Pitfalls to Avoid to be a Better Manager

•Waving is a serious insult in Greece and Nigeria, particularly if the hand is near someone's face. •Making a "good-bye" wave in Europe can mean "No," but it means "Come here" in Peru. •In China, last names are written first. •A man named Carlos Lopez-Garcia should be addressed as Mr. Lopez in Latin America but as Mr. Garcia in Brazil. •Breakfast meetings are considered uncivilized in most foreign countries. •Latin Americans are, on average, 20 minutes late to business appointments. •Direct eye contact is impolite in Japan. •Do not cross your legs in any Arab or many Asian countries because it is rude to show the sole of your shoe. •In Brazil, touching your thumb and first finger—an American "Okay" sign—is the equivalent of raising your middle finger. •Nodding or tossing your head back in southern Italy, Malta, Greece, and Tunisia means "No." In India, this body motion means "Yes." •Snapping your fingers is vulgar in France and Belgium. •Folding your arms across your chest is a sign of annoyance in Finland. •In China, leave some food on your plate to show that your host was so generous that you could not finish. •Do not eat with your left hand when dining with clients from Malaysia or India. •One form of communication works the same worldwide. It is the smile; so take that along wherever you go.

Workplace romance can be detrimental to morale and productivity by causing

•favoritism complaints can arise •confidentiality of records can be breached •reduced quality and quantity of work could result •personal arguments can lead to work arguments •whispering secrets can lead to tensions •sexual harassment charges may ensue •conflicts of interest could arise

Which statement below is​ TRUE? A. ​"Going public" means selling off a percentage of a company to others to raise​ capital; consequently, it dilutes the​ owners' control of the firm. B. ​"Going public" is not recommended for companies with less than​ $100 million in sales because the initial costs can be too high for the firm to generate sufficient cash flow to make going public worthwhile. C. Many firms prefer to leave their cash outside in Bermuda banks if it was earned outside the United States. To use those funds to pay dividends or purchase treasury​ stock, for​ example, would trigger a big U.S. corporate income tax payment. D. In some income​ statements, another name for earnings is revenues. E. ​Increasingly, companies are using treasury stock to buy back their own stock and to pay cash dividends to shareholders. This has become a concern.

A. ​"Going public" means selling off a percentage of a company to others to raise​ capital; consequently, it dilutes the​ owners' control of the firm.

In developing projected financial​ statements, how are retained earnings calculated on the balance​ sheet?

Add the net income less dividends to the prior​ year's retained earnings.

Which statement below is​ FALSE? A. Strategic management should be a​ self-reflective learning process that familiarizes managers and employees in the organization with key strategic issues and feasible alternatives for resolving those issues. B. Numbers supported by​ words, rather than words supported by​ numbers, should be the medium used to explain strategic issues and organizational responses. C. Strategic management must not become​ ritualistic, stilted,​ orchestrated, or too​ formal, predictable, and rigid. D. Words supported by​ numbers, rather than numbers supported by​ words, should be the medium used to explain strategic issues and organizational responses. E. R.T. Lenz says a guideline to follow in strategic planning is to welcome bad news and encourage​ devil's advocate thinking.

B. Numbers supported by​ words, rather than words supported by​ numbers, should be the medium used to explain strategic issues and organizational responses.

​______ is defined by ​Black's Law Dictionary as the​ offering, giving,​ receiving, or soliciting of any item of value to influence the actions of an official or other person in discharge of a public or legal duty.

Bribery

Which statement below is​ FALSE? A. Too much emphasis on evaluating strategies may be expensive and counterproductive. B. Too much pressure from top managers may result in lower managers contriving numbers they think will be satisfactory. C. In many​ organizations, strategy evaluation is simply an appraisal of how well an organization has performed. D. The more managers attempt to evaluate the behavior of​ others, the less control they have.

C. In many​ organizations, strategy evaluation is simply an appraisal of how well an organization has performed.

Which of the following statements is TRUE regarding the issuance of corporate bonds in the United​ States? A. The practice of firms issuing bonds to buy back their own stock and to pay cash dividends to shareholders is illegal. B. Firms issue bonds to finance​ acquisitions, to buy back their own stock​ (called preferred stock​), and to refinance old debt. C. The year 2017 was the seventh straight year that a record dollar value of bonds was sold in the United​ States, totalling more than​ $1.5 trillion. D. A large recent bond transaction was​ Anheuser-Busch InBev's​ $4 billion bond issuance to purchase SAB Miller. E. Bonds were discontinued for use in the United States.

C. The year 2017 was the seventh straight year that a record dollar value of bonds was sold in the United​ States, totalling more than​ $1.5 trillion.

Which statement below is​ FALSE? A. Workplace romance can be detrimental to workplace morale and productivity for a number of reasons. B. An organization probably should not strictly forbid workplace​ romance, because such a policy could be construed as an invasion of​ privacy, overbearing, or unnecessary. C. In some​ states, such as​ California, managers can be held personally liable for damages that arise from workplace romance. D. Workplace romances actually decrease work​ performance, adding a dynamism and energy that translates into decreased​ morale, communication,​ creativity, and productivity. E. Some workplace romances actually improve work performance.

D. Workplace romances actually decrease work​ performance, adding a dynamism and energy that translates into decreased​ morale, communication,​ creativity, and productivity.

The​ ______ family of standards concerns the extent to which a firm minimizes harmful effects on the environment caused by its activities and continually monitors and improves its own environmental performance.

ISO 14000

In what way mentioned below would retained earnings on the balance sheet decrease from one year to the​ next?

If the firm had positive net income for the year but pays out dividends greater than the net income

Which factor below commonly prohibits effective resource​ allocation?

Placing too great an emphasis on​ short-run financial criteria

Chapter​ 8's exemplary​ strategist, Jamie​ Dimon, CEO of JP​ Morgan, says successful strategic planning has more to do with heart than mind. What does Dimon say this​ means?

Provide people a platform to which they can contribute.

A recent study by The Institute of Business Ethics​ (IBE) titled,​ "Does Business Ethics​ Pay?" concluded that companies that display a​ "clear commitment to ethical​ conduct" ______ outperform companies that do not display ethical conduct.

consistently