Capstone Test 3
feasibility
According to Rumelt, the final broad test of strategy is its A) advantage. B) feasibility. C) consonance. D) consistency. E) distinctiveness.
qualitative
Also important in evaluating strategies are ________ criteria, like high absenteeism and turnover rates, or low employee satisfaction. A) numerical B) qualitative C) quantitative D) accounting E) financial
inconsistent
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.
take corrective actions
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
5,000
International financial reporting standards (IFRS) comprise approximately ________ pages. A) 1,000 B) 5,000 C) 10,000 D) 25,000 E) 100,000
all of the above
Modern organizational realities demand that employees demonstrate greater A) flexibility. B) innovation. C) creativity. D) initiative. E) all of the above
Financial ratios
Quantitative criteria commonly used to evaluate strategies are A) ash budgets. B) Balanced Scorecards. C) Capital Asset Pricing Models. D) financial ratios. E) present value analyses.
sets of trends
Rumelt's criteria of consonance refers to the need for strategists to examine A) inconsistent goals. B) sets of trends. C) impractical objectives. D) competitive advantages. E) the costs associated with particular strategies.
the largest hospitals
The Fortune 50 includes all of the following EXCEPT A) the largest retailers B) the largest transportation companies C) the largest utilities D) the largest banks E) the largest hospitals
foster mutual understanding and trust
The strategy-evaluation process should A) dominate decisions. B) be complex. C) be cumbersome. D) foster mutual understanding and trust. E) be restrictive.
may be expensive and counterproductive
Too much emphasis on evaluating strategies A) may be expensive and counterproductive. B) is not possible - the more emphasis the better. C) is good for morale, as employees like being closely evaluated. D) is always advised if the firm can afford it. E) is worse than too little or no evaluation.
Increasingly difficult
With the passage of time strategy evaluation is becoming A) increasingly difficult. B) much simpler. C) very convenient. D) an unnecessary activity. E) less important.
future shock
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
all of the above
A particularly important twenty-first-century challenge facing all strategists today is A) deciding whether the process should be more an art or a science. B) deciding whether strategies should be visible or hidden from stakeholders. C) deciding whether the process should be more top-down or bottom-up in their firm. D) all of the above E) none of the above
when the nature, types, and speed of changes overpower their ability and capacity to adapt
According to researchers, all of the following encourage individuals to accept change EXCEPT A) when they have a cognitive understanding of the changes B) when they have a sense of control over the situation C) when they have an awareness that necessary actions are going to be taken to implement change D) when they participate in strategy-evaluation activities E) when the nature, types, and speed of changes overpower their ability and capacity to adapt
the decreasing difficulty of predicting the future with accuracy
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 decreasing difficulty of predicting the future with accuracy E) the rapid rate of obsolescence of even the best plans
Openness limits rival firms from imitating or duplicating the firm's strategies
All of the following are reasons to be completely open with the strategy process EXCEPT A) Managers, employees and other stakeholders can readily contribute to the process. B) Investors, creditors and other stakeholders have greater basis for supporting a firm that is open. C) Visibility promotes democracy whereas secrecy promotes autocracy. D) Participation and openness enhances understanding, commitment and communication within the firm. E) Openness limits rival firms from imitating or duplicating the firm's strategies.
distinctiveness
All of these are Richard Rumelt's criteria to evaluate a strategy EXCEPT A) advantage B) consistency C) feasibility D) distinctiveness E) consonance
position
Competitive advantage normally is the result of superiority in resources, skills, and A) employees. B) position. C) consistency. D) feasibility. E) governance.
the performance of competitors
Financial ratios are used to compare a firm's performance over different time periods, to compare the firm's performance to industry averages, and to compare a firm's performance with A) overall business standards. B) projected goals. C) the performance of suppliers. D) non-financial ratios. E) the performance of competitors.
middle- and lower-level managers, and even nonmanagers, should be involved in the strategic planning process.
Increased education and diversity of the workforce at all levels are reasons why A) the top-down approach is preferred. B) the bottom-up approach is untenable. C) only top executives have the experience and acumen to make strategy decisions. D) middle- and lower-level managers, and even nonmanagers, should be involved in the strategic planning process. E) the horizontal approach is the most pragmatic choice.
top executives
Proponents of the top-down approach contend that ________ are the only persons in the firm with the collective experience, acumen, and fiduciary responsibility to make key strategy decisions. A) top executives B) divisional managers C) middle-level managers D) lower-level managers E) non-management employees
Participation
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
The Balanced Scorecard approach
What aims to balance long-term with short-term concerns, financial with nonfinancial concerns, and internal with external concerns? A) Contingency planning B) The Balanced Scorecard approach C) Taking corrective action D) Benchmarking E) Consonance
EFE matrix
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
IFE matrix
Changes in the organization's management, marketing, finance/accounting, production/operations, R&D, and MIS strengths and weaknesses should be the focus of a revised A) mission. B) IFE matrix. C) vision. D) EFE matrix. E) EPM matrix.
action-oriented; information-oriented
Controls need to be ________ rather than ________. A) action-oriented; information-oriented B) cultural; political C) qualitative; quantitative D) measurable; timely E) universal; diverse
avoid external opportunities
Corrective action should do all of the following EXCEPT A) capitalize upon internal strengths B) avoid external opportunities C) avoid external threats D) improve internal weaknesses E) strengthen an organization's competitive position
needed
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
strengthen an organization's competitive position in its industry
Corrective actions should always A) strengthen an organization's competitive position in its industry. B) streamline asset holdings. C) have no risk. D) involve abandoning existing strategies. E) all of the above
annual; long-term
Most quantitative criteria are geared to ________ objectives rather than ________ objectives. A) top-management; employee B) short-term; annual C) annual; long-term D) environmental; community E) profit; social
more of a science than an art
Most strategy literature advocates that strategic management is A) more of a science than an art. B) more of an art than a science. C) based on analysis rather than research. D) based on intuition rather than analysis. E) based on creativity rather than intuition.
on a continuous basis
Strategy-evaluation activities should ideally be performed A) just on a periodic basis. B) only at the onset of a problem. C) on a continuous basis. D) solely upon completion of major projects. E) annually only.
is no guarantee of success tomorrow
Success today A) guarantees success tomorrow. B) is no guarantee of success tomorrow. C) should lull a firm into complacency. D) is all that really matters. E) none of the above.
2015 or 2016
The first time U.S. issuers would report under the international financial reporting standards (IFRS) would be approximately _______. A) 2011 or 2012 B) 2012 or 2013 C) 2013 or 2014 D) 2014 or 2015 E) 2015 or 2016
mutual understanding
The strategy-evaluation process should foster A) mutual understanding. B) doubt. C) corporate culture. D) complexity. E) division.
all of the above
What corrective actions might a firm take during strategy evaluation? A) Revising the business mission B) Issuing stock C) Revising objectives D) Selling a division E) All of the above
Contingency planning
What has been shown to permit quick response to change, prevent panic in crisis situations, and make managers more adaptable? A) Auditing B) Implementing a Balanced Scorecard C) Contingency planning D) Taking corrective actions E) Measuring performance
Adequate and timely feedback
What is the cornerstone of effective strategy evaluation? A) Adequate and timely feedback B) Quality and quantity of managers C) Smaller ratio of top- to lower-level management D) Evaluation preceding implementation stage E) Punitive corrective actions
Auditing
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) Accounting
Consonance
What term refers to the need for strategists to examine sets of trends, as well as individual trends, in evaluating strategies? A) Consistency B) Consonance C) Synergy D) Feasibility E) Advantage
Amount of physical resources
Which of the following is NOT a key attribute that serves as one of the evaluative criteria for Fortune's "America's Most Admired Companies?" A) People management B) Innovativeness C) Financial soundness D) Amount of physical resources E) Use of corporate assets
Product life cycles are longer
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.
It enhances understanding, commitment and communication within the firm
Which of the following is NOT a reason why some firms prefer to conduct strategic-planning in secret? A) Dissemination of a firm's strategies may translate into competitive intelligence for rival firms. B) It enhances understanding, commitment and communication within the firm. C) It limits criticism, second-guessing, and hindsight. D) Participants in a visible strategy process become more attractive to rival firms, who may lure them away. E) Secrecy limits rival firms from imitating or duplicating the firm's strategies.
Comparing results to competitors' expectations
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
Social responsibility
Which of the following is NOT one of the four perspectives from which the Balanced Scorecard allows firms to evaluate strategies? A) Social responsibility B) Financial performance C) Customer knowledge D) Internal business processes E) Learning and growth
All of the above
Which of the following is a corrective action a company might take to correct unfavorable variances? A) Divesting a division B) Revising objectives C) Raising capital with stock or debt D) Allocating resources differently E) All of the above
It should be determined based on the unique characteristics of a company
Which of the following is true regarding the design of a firm's strategy-evaluation system? A) There is a one-size-fits-all system that works for all companies. B) It does not need to take into account the organization's size. C) The management style of a firm has no bearing on the design. D) It should be determined based on the unique characteristics of a company. E) There is one ideal system.
Strategists should plan for all possible contingencies
Which of the following statements about contingency plans is NOT true? A) Contingency plans should be as simple as possible. B) Only high-priority areas require the insurance of contingency plans. C) Contingency plans should be developed for favorable and unfavorable events. D) Strategists should plan for all possible contingencies. E) Contingency plans minimize the impact of potential threats.
Production quality
Which of these is NOT a key financial ratio? A) Market share B) Production quality C) Earnings per share D) Asset growth E) Return on equity
All of the above
Which of these is a basic activity of strategy evaluation? A) Reviewing the underlying bases of current strategies B) Comparing expected results with actual results C) Taking corrective actions D) Choices B and C only E) All of the above
Large; small
________ 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
Contingency planning
What activity is defined as having alternative plans that can be put into effect if certain key events do not occur as expected? A) Corporate agility B) Scenario planning C) Strategy evaluation D) Contingency planning E) Forecasting
