Capstone Chap.7-9
11) What tends to become a more attractive financing technique when interest rates are high? A) Stock issuance B) Debt C) Cost cutting D) Borrowing E) Staying privately owned
A
32) Information technology has made it is possible for many firms to have employees who work at home or anywhere, anytime
A
5) A firm's annual objectives can be stated by business segment.
A
14) Which of these is a potential problem associated with using only quantitative criteria for selecting strategies? A) Most quantitative criteria are geared to long-term objectives rather than annual objectives. B) Different accounting methods can provide different results on many quantitative criteria. C) Intuitive judgments are almost never used in deriving quantitative criteria. D) Quantitative criteria include human factors that may be underlying causes of declining performance. E) Quantitative criteria are not useful for comparisons of the firm's performance over different periods of time.
B
19) Most quantitative evaluation criteria are geared to long-term objectives rather than annual objectives.
B
2) Competitive advantage normally is the result of superiority in resources, skills, or A) employees. B) position. C) consistency. D) feasibility. E) governance
B
20) Evaluating the worth of a firm A) is an exact science. B) requires both qualitative and quantitative skills. C) is based solely on financial facts. D) is known only to the firm's accountants. E) is static
B
22) Just-in-time describes A) implementing strategies just before bankruptcy. B) delivering materials just as they are needed. C) a scheduling method for meetings. D) a personnel planning method. E) a process for improving quality.
B
23) All the methods for determining a business' worth can be grouped into three basic approaches: what a firm earns, what a firm spends, and what a firm will bring in the market.
B
26) Organizational change today should be viewed as a project or event rather than as a continuous process.
B
28) The U.S. Chamber of Commerce supports a change from to IFRS to GAAP, saying it will help the United States compete in the world economy.
B
5) Which is NOT a required step in perceptual mapping? A) Select key criteria that effectively differentiate products or services in the industry. B) Serve two segments with the same strategy. C) Plot major competitors' products or services in the resultant matrix. D) Identify areas in the positioning map where the company's products or services could be most competitive in the given target market. E) Develop a marketing plan to position the company's products and services appropriately.
B
6) An area on a perceptual map without ideal points indicates a A) market segment. B) demand void. C) vacant niche. D) multidimensional scale. E) product reposition.
B
21) A change strategy that attempts to convince people that the change is to their personal advantage is A) defusion. B) force. C) educative. D) rational. E) compromise.
D
3) Subdividing a market into distinct subsets of customers according to their needs and buying habits is known as A) market penetration. B) product diversification. C) market segregation. D) market segmentation. E) positioning.
D
20) Resistance to change can manifest itself through A) absenteeism. B) sabotaging production machines. C) filing unfounded grievances. D) unwillingness to cooperate. E) all of the above
E
1) The online community of customers increasingly mirrors the offline community but is much quicker, cheaper, and effective to reach than traditional focus groups and surveys.
A
10) After completing an EPS/EBIT analysis, what conclusions would you make if the debt line is above the stock line throughout the range of EBIT on the graph? A) Debt appears to be the best financing alternative. B) Stock would be the best financing alternative. C) A combination of debt and stock is probably the best financial alternative. D) Dividends must be considered before conclusions can be made. E) The company should be privately owned.
A
10) What are the three categories of approaches for managing and resolving conflict? A) Avoidance, defusion, and confrontation B) Avoidance, apathy, and defusion C) Ignorance, indifference, and apathy D) Defusion, apathy, and avoidance E) Indifference, avoidance, and role-playing
A
12) An EPS/EBIT chart can be constructed to determine the break-even point, where one financing alternative becomes more attractive than another.
A
17) Research suggests that which of the following is one of the best ways to overcome individuals' resistance to change in strategy evaluation? A) Participation B) Command-and-control C) Laissez-faire system D) Rational argument E) Emotional reactions
A
18) Strengths, weaknesses, opportunities, cost and threats that represent the bases of current strategies should continually be monitored for change because it is not really a question of whether these factors will change, but rather when they will change and in what ways.
A
20) Taking corrective actions does not necessarily mean that existing strategies will be abandoned, or even that new strategies must be formulated.
A
21) In the context of a balance sheet, goodwill represents A) a premium paid over the book value for an acquisition. B) the value attached to a firm's reputation. C) the excess of assets over liabilities. D) the value associated with benefits from environmental programs. E) the excess of current assets over liabilities.
A
22) Controls need to be ________ rather than ________. A) action-oriented; information-oriented B) cultural; political C) qualitative; quantitative D) measurable; timely E) universal; diverse
A
23) Reengineering does not usually affect the organizational structure or chart, nor does it imply job loss or employee layoffs.
A
23) The strategy-evaluation process should foster A) mutual understanding. B) doubt. C) corporate culture. D) complexity. E) division.
A
24) Four common corporate Valuation methods are the Net Worth Method, the Net Income Method, the Price-Earnings Ratio Method, and the Outstanding Shares Method.
A
26) What term is defined as "a systematic process of objectively obtaining and evaluating evidence regarding assertions about economic actions and events to ascertain the degree of correspondence between these assertions and established criteria, and communicating the results to interested users"? A) Auditing B) Innovation C) R&D D) Strategic Management E) Financial ratios
A
27) According to research, the most successful new product companies use a research and development strategy that ties internal strengths to external opportunities and is linked with objectives.
A
28) R&D issues include emphasis on product or process improvements.
A
29) A major effort in R&D may be risky if technology is changing rapidly and the market is growing slowly.
A
18) Because activities are organized according to the way work is actually performed, a divisional structure by process is similar to the matrix structure.
B
18) The percentage-of-sales method should be used for projecting interest and taxes, but not dividends, in the income statements.
B
24) Six Sigma is generally equally successful in retail firms and manufacturing firms.
B
25) In contingency planning it is crucial that strategists cover all bases
B
25) The focus of restructuring is changing the way work is actually carried out.
B
27) International financial reporting standards (IFRS) comprise approximately ________ pages. A) 1,000 B) 5,000 C) 10,000 D) 25,000 E) 100,000
B
28) All of the following statements regarding the recent trend in Japan of switching from seniority-based pay to performance-based approaches are true EXCEPT A) the switch is an effort to cut costs. B) the switch is boosting employee morale. C) the switch is an effort to increase productivity. D) the switch opposes the traditional training of Japanese employees to cooperate rather than compete. E) the switch goes against decades of encouraging workers to work in groups instead of individually.
B
3) Rumelt's criteria of consonance refers to the need for strategists to examine A) inconsistent goals. B) trends. C) impractical objectives. D) competitive advantages. E) the costs associated with particular strategies
B
32) Strategists should strive to preserve, emphasize, and build upon aspects of an existing culture that are antagonistic to a proposed strategy.
B
7) "Beginning in March, production employees will have the option of working up to 12 hours of overtime per week." is an example of a procedure.
B
29) Mintzberg's notion of "crafting" strategies A) is consistent with the view that strategic management is more a science than an art. B) contends that firms need to assess their environments, do research, evaluate alternatives, analyze, and then choose a course of action. C) suggests that strategic decision making be based primarily on holistic thinking, intuition, creativity, and imagination. D) reject strategies that result from subjective imagination in favor of objective analysis. E) insists on formality.
C
30) Wellness programs A) are too expensive for most companies to afford. B) are desired by employees but don't provide value to the company. C) are becoming more prevalent as companies realize the benefits to the firm. D) attract prospective employees who then fail to take advantage of them. E) are facing legal challenges from the health-care industry.
C
30) Which statement is NOT true? A) Having an effective management information system may be the most important factor in differentiating successful from unsuccessful firms. B) Like inventory and human resources, information is now recognized as a valuable organizational asset that can be controlled and managed. C) Computer vulnerability has nearly been eradicated by recent innovations, and it is now possible to secure and safeguard all corporate communications, files, and business conducted over the Internet. D) In many firms, information technology is allowing employees to work at home or anywhere, anytime. E) Improved quality and service often result from an improved management information system.
C
3) Which of the following is NOT true about objectives? A) They should be communicated throughout the organization. B) They should have an appropriate time dimension. C) They should use terms like "maximize," "minimize," and "as soon as possible." D) They should be measurable. E) They should be consistent.
E
4) If success for one organizational department means failure for another department, then strategies may be A) synergistic. B) advantageous. C) trendy. D) feasible. E) inconsistent
E
6) Which is NOT a characteristic of policies? A) let both employees and managers know what is expected of them B) provide a basis for management control C) allow coordination across organizational units D) reduce the amount of time managers spend making decisions E) represent the basis for allocating resource
E
30) Most organizations can afford to pursue only a few corporate-level strategies at any given time.
A
31) The process of strategic management is facilitated immensely in firms that have an effective information system.
A
6) Which of the following is NOT a reason for the increasing difficulty of evaluating strategies? A) Product life cycles are longer. B) Domestic and world economies are less stable. C) Product development cycles are shorter. D) Technological advancement is more rapid. E) Change is occurring more frequently.
A
8) Which is NOT a major factor that commonly prohibits effective resource allocation? A) Underprotection of resources B) Organizational politics C) Having vague strategy targets D) A reluctance to take risks E) A lack of sufficient knowledge
A
9) An absence of conflict can signal ________ within an organization. A) indifference and apathy B) insight and apathy C) indifference and indignation D) disputes E) all of the above
A
9) In low-earning periods, too much ________ in the capital structure of an organization can endanger stockholders' return and jeopardize company survival. A) debt B) liquidity C) equity D) cash E) tax liability
A
31) In Japan, performance rather than seniority has traditionally been the key factor in determining pay.
B
21) The strategy-evaluation process should A) dominate decisions. B) be complex. C) be cumbersome. D) foster mutual understanding and trust. E) be highly restrictive.
D
25) If an initial stock issuance is $800,000, what would be the expected cost paid to lawyers, accountants, and underwriters, based on the average for IPOs in this range? A) $20,000 B) $40,000 C) $80,000 D) $200,000 E) $400,000
D
27) For upper-level executives, ________ is the major variable used for compensation incentives. A) Balanced Scorecard performance B) revenue C) net income D) stock price E) none of the above
D
29) What pay strategy requires employees or departments to establish performance targets, which, if exceeded, result in bonuses for all members? A) Profit sharing B) Bonus system C) Salary D) Gain sharing E) Hourly wage system
D
4) Matching which factors would allow factories to produce desirable levels without extra shifts, overtime, or subcontracting? A) Markets and competitors B) Competition and positioning C) Customer behavior and positioning D) Supply and demand E) Segments and competitors
D
5) All of the following are reasons strategy evaluation is more difficult today EXCEPT A) a dramatic increase in the environment's complexity. B) the increasing number of variables. C) the increase in the number of both domestic and world events affecting organizations. D) the increasing time span for which planning can be done with any degree of certainty. E) the rapid rate of obsolescence of even the best plans.
D
7) Multidimensional scaling is used in A) determining the size of a new building. B) determining the size of a new department. C) evaluating the amount of high-tech equipment a firm needs. D) perceptual mapping. E) market segmentation.
D
8) Which of these is NOT a rule for using product positioning as a strategy-implementation tool? A) Look for the hole or vacant niche, a segment of the market currently not being served. B) Do not serve two segments with the same strategy. C) Position yourself in the middle of the map, if you are one of only two competitors. D) Position yourself in the middle of the map, if there are more than two competitors. E) All of these are rules for using product positioning as a strategy-implementation tool.
D
15) A divisional structure by product is most effective when A) special emphasis needs to be placed on specific products. B) an organization offers few products. C) an organization's products or services differ substantially. D) special emphasis needs to be placed on specific services. E) all of the above
E
17) Which is NOT a step in performing a projected financial analysis? A) Prepare the projected income statement before preparing the balance sheet B) Forecast sales as accurately as possible C) Use the percentage-of-sales method to project CGS D) Subtract from the net income any dividends to be paid for that year and bring this retained earnings amount over to the balance sheet E) Use the revenue account as the plug figure
E
19) Which term is primarily concerned with shareholder well-being rather than employee wellbeing? A) Benchmarking B) Reengineering C) Product redesign D) Process management E) Restructuring
E
2) Considerable time and effort should be devoted to assuring objectives are well conceived because they represent the basis for A) monitoring progress toward long-term objectives. B) establishing divisional priorities. C) allocating resources. D) evaluating managers. E) all of the above
E
2) Which two variables rank as marketing's most important contributions to strategic management? A) Diversification and budgeting B) Marketing penetration and competition C) Competition and collaboration D) Product development and market development E) Market segmentation and product positioning
E
26) Many U.S. firms with a large percentage of their revenues derived in foreign countries prefer to leave their cash outside the United States because using those funds to pay dividends or purchase treasury stock would A) promote foreign investment. B) decrease foreign exchange. C) inflate stock prices. D) create pressure for decreased exporting. E) require a big U.S. corporate income tax payment.
E
1) In Rumelt's work, the final broad test of strategy is its A) advantage. B) feasibility. C) consonance. D) consistency. E) distinctiveness
B
11) A revised ________ should focus on changes in the organization's management, marketing, finance and accounting, production and operations, research and development (R&D), and management information systems (MIS) strengths and weaknesses. A) mission B) IFE Matrix C) vision D) EFE Matrix E) EPM Matrix
B
11) Avoidance, defusion, and confrontation are the classifications for the various types of conflict that can arise in organizations.
B
13) Policies largely dictate how structure will be established.
B
13) When additional stock is issued to finance implementation of strategy, the existing stockholders' ownership and control of the enterprise are strengthened.
B
14) What type of organizational structure promotes specialization of labor and allows rapid decision making? A) Divisional structure by product B) Functional structure C) Divisional structure by customer D) Strategic business unit E) Matrix structure
B
7) Success today A) guarantees success tomorrow. B) is no guarantee of success tomorrow. C) provides significant assurance of success tomorrow. D) is all that really matters. E) none of the above
B
8) It is most effective to conduct strategy evaluation annually, at the end of the fiscal year.
B
9) Corrective actions are almost always ________ except when external and internal factors have not significantly changed and the firm is progressing satisfactorily toward achieving stated objectives. A) unnecessary B) needed C) undesirable D) prohibitively expensive E) futile
B
12) Structure dictates how resources will be allocated.
A
13) Which of the following is NOT included in measuring organizational performance? A) Comparing results to competitors' expectations B) Examining progress being made toward meeting stated objectives C) Investigating deviations from plans D) Evaluating individual performance E) Comparing expected results to actual results
A
10) If you discover during the course of strategy evaluation that major changes have occurred in the firm's internal strategic position, you should A) continue on the present strategic course. B) wait until the next quarter to see if things revert. C) take corrective actions. D) follow the original strategic plan. E) none of the above
C
12) A revised ________ should indicate how effective a firm's strategies have been in response to key opportunities and threats. A) IFE Matrix B) mission C) EFE Matrix D) vision E) CPM Matrix
C
15) Most quantitative criteria are geared to ________ objectives rather than to ________ objectives. A) top-management; employee B) short-term; annual C) annual; long-term D) environmental; community E) long-term; short-term
C
16) According to author Alvin Toffler, what occurs when the nature, types, and speed of changes overpower an individual's or organization's ability and capacity to adapt? A) Corporate insecurity B) Corrective actions C) Future shock D) Corporate agility E) Projected performance
C
16) If a firm incurs a loss during a particular year, or if the firm paid out more in dividends than it had in net income, what happens to the retained earnings (RE) amount? A) It increases. B) It is unchanged. C) It decreases. D) It doubles. E) It cannot be determined from the information given.
C
16) Which organizational structure has the disadvantage of ambiguous roles for some senior executives? A) Functional B) Divisional C) Strategic Business Unit (SBU) D) Matrix E) Process
C
17) What is the most complex form of organizational structure? A) Divisional B) SBU C) Matrix D) Functional E) Geographic
C
22) A conservative rule of thumb is to establish a business' worth as ________ the firm's current annual profit. A) twice B) three times C) five times D) ten times E) fifteen times
C
24) ________ organizations require more elaborate and detailed strategy-evaluation systems than ________ ones, because it is more difficult to coordinate efforts among different divisions and functional areas. A) Non-profit; for-profit B) For-profit; non-profit C) Large; small D) Small; large E) Foreign; domestic
C
4) Which word or phrase would be most suitable to use in written objective statements? A) Maximize B) Minimize C) 10 percent increase D) Adequate E) As soon as possible
C
14) What is a central strategy-implementation technique that allows an organization to examine the expected results of various strategy implementation decisions? A) EPS/EBIT B) Financial budgeting C) TOWS analysis D) Projected financial statement analysis E) External analysis
D
15) Which element in the projected income statement CANNOT be forecasted using the percentage-of-sales method? A) Cost of goods sold B) Selling expense C) Administrative expense D) Interest expense E) All of these items can be forecasted using the percentage-of-sales method.
D
19) Which item is included in net worth? A) Retained earnings B) Common stock C) Additional paid-in-capital D) All of the above are included in net worth. E) None of the above are included in net worth.
D
1) Which of the following is a management issue central to strategy implementation? A) Devising policies B) Revising reward and incentive plans C) Minimizing resistance to change D) Developing an effective human resources function E) All of the above
E
