Final

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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?

$200,00

The strategy-formulation analytical framework consists of how many stages and how many matrices?

*A.3 and 9* B.2 and 8 C.3 and 8 D.4 and 10 E.3 and 10

In a QSPM analysis, would it ever be appropriate or useful for a company to not include a weight column at all, but rather just sum the AS columns to determine the relative attractiveness of six strategies?

*A.No* B.Yes but only for multi-divisional companies C.Yes but only for small firms D.Yes E.Yes but only for nonprofit organizations

There are four important differences between the BCG Matrix and the IE Matrix. Which statement below is not a difference between the two matrices?

*A.The sizes of the circles and pie slices can vary.* B.The strategic implications of each matrix are different. C.The IE Matrix requires more information about the divisions than does the BCG Matrix. D.The IE Matrix has nine quadrants versus four in a BCG Matrix. E.The x and y axes are different.

What is the range for a firm's total weighted score in a Competitive Profile Matrix (CPM)?

1 to 4

What is the range for a firm's total weighted score in an External Factor Evaluation Matrix?

1 to 4

Name five strategic marketing issues or decisions

1. To use exclusive dealerships or multiple channels of distribution 2.To use heavy, light or no tv advertising vs online advertising 3.To limit or not the share of business done with a single customer 4.To be a price leader or follower 5.To offer a complete or limited warranty

Which word or phrase would be most suitable to use in written objective statements?

10 percent increase

It is predicted that the United States will have no racial or ethnic majorities by the year

2075

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

4.0

The world population is expected to grow to an estimated ________ billion in 2054.

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.

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.

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

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

12) An EPS/EBIT chart can be constructed to determine the break-even point, where one financing alternative becomes more attractive than another.

12) In the SPACE analysis, what does a (+6, +3) strategy profile portray? A) A strong industry position B) An unstable environment C) A stable environment D) A weak industry position E) A weak financial position

12) Structure dictates how resources will be allocated.

13) The most important determinants of an organization's overall strategic position are considered to be the two internal dimensions, financial position (FP) and competitive position (CP), and the two external dimensions, industry position (IP) and stability position (SP).

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

14) Market penetration can be classified as either a conservative, aggressive, or competitive strategy when using the Strategic Position and Action Evaluation (SPACE) Matrix.

15) The firm should pursue conservative strategies if the coordinates of a SPACE directional vector are (-1, +4).

16) The firm should pursue aggressive strategies if the coordinates of a SPACE directional vector are (+5, +4).

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

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.

20) Taking corrective actions does not necessarily mean that existing strategies will be abandoned, or even that new strategies must be formulated.

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.

22) According to the Grand Strategy Matrix, which strategy is recommended for a firm with rapid market growth and a strong competitive position? A) Market penetration B) Unrelated diversification C) Joint venture D) Retrenchment E) Liquidation

22) Controls need to be ________ rather than ________. A) action-oriented; information-oriented B) cultural; political C) qualitative; quantitative D) measurable; timely E) universal; diverse

23) For companies located in Quadrant III of the Grand Strategy Matrix, the first strategy recommended is A) extensive cost and asset reduction. B) asset expansion. C) employee expansion. D) immediate liquidation of assets. E) divestiture.

23) Reengineering does not usually affect the organizational structure or chart, nor does it imply job loss or employee layoffs.

23) The strategy-evaluation process should foster A) mutual understanding. B) doubt. C) corporate culture. D) complexity. E) division.

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.

24) When a firm located in Quadrant I of the Grand Strategy Matrix is too heavily committed to a single product, related diversification may be appropriate to reduce the risks associated with a narrow product line.

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

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.

28) R&D issues include emphasis on product or process improvements.

29) A major effort in R&D may be risky if technology is changing rapidly and the market is growing slowly.

30) Most organizations can afford to pursue only a few corporate-level strategies at any given time.

31) The process of strategic management is facilitated immensely in firms that have an effective information system.

32) Information technology has made it is possible for many firms to have employees who work at home or anywhere, anytime

38) In recent times, ________ perhaps has instituted the most protectionist measures by raising tariffs on most imports and subsidizing its own exports. A) Russia B) The United States C) The European Union D) India E) Switzerland

40) Which of the following is NOT a characteristic that describes the most competitive companies in America? A) Divestiture is essential to growth. B) Hire and retain the best employees and managers possible. C) Continually adapt, innovate, improve—especially when the firm is successful. D) Strive to stay cost-competitive on a global basis. E) Whether it's broke or not, fix it.

44) A ________ integration strategy is used by firms to gain control or ownership of suppliers. A) backward B) forward C) horizontal D) vertical E) vortexed

46) The investor relations pages of a company website ________ information about a firm. A) is a good place to start to find B) is not a reliable source of C) is only acceptable as a last resort for D) should not be used as the first place to look for E) is a waste of time when searching for

48) Without assumptions, planning would be A) impossible. B) easier. C) difficult. D) inexpensive. E) intuitive.

5) A firm's annual objectives can be stated by business segment.

51) One difference between a Competitive Profile Matrix (CPM) and an External Factor Evaluation (EFE) is that A) CPM includes both internal and external issues. B) the weights and total weighted scores have different meanings. C) CPM ratings range from 1 to 10. D) CPM is performed only for the company, whereas EFE is performed for both the company and its competitors. E) CPM is only used in small firms.

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.

7) The purpose of matching key factors is to generate feasible alternative strategies.

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

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

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

9) What are the two external dimensions of the SPACE Matrix? A) Stability position and industry position B) Stability position and competitive position C) Industry position and competitive position D) Competitive position and financial position E) Financial position and industry position

A benefit of using projected balance sheets and income statements is that A) the impact of various implementation decisions can be forecasted. B) money can be put aside to pay future income taxes. C) insurance needs can be computed. D) it is useful in analyzing past performance. E) all of the above

Firms located in which quadrant of the Grand Strategy Matrix are in an excellent strategic position? A) I B) II C) III D) IV E) V

For companies located in Quadrant III of the Grand Strategy Matrix, the first strategy recommended is A) extensive cost and asset reduction. B) asset expansion. C) employee expansion. D) immediate liquidation of assets. E) divestiture.

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

In the Boston Consulting Group (BCG) Matrix, how would a division with a low relative market share position in a high growth industry be described? A) Question Mark B) Cash Cow C) Star D) Stuck-in-the-middle E) Dog

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.

Successful strategists minimize their own political exposure on issues that are ________ and in circumstances where opposition from major power centers is likely. A) highly controversial B) nominally controversial C) power centered D) strategy centered E) tactic optimized

The Boston Consulting Group (BCG) Matrix is designed specifically to enhance which type of firm's efforts to formulate strategies? A) Companies with more than one division B) Large companies C) Companies with annual sales greater than $1 million D) Companies with annual sales of less than $1 million E) All companies

The amount by which retained earnings changes is obtained by subtracting A) any dividends to be paid for that year from net income. B) net income from EBIT. C) taxes from EBIT. D) interest expense from EBIT. E) EBIT from CGS.

Today, boards of directors are composed mostly of A) outsiders. B) management. C) union members. D) company employees. E) past executives.

What are the two external dimensions of the SPACE Matrix? A) Stability position and industry position B) Stability position and competitive position C) Industry position and competitive position D) Competitive position and financial position E) Financial position and industry position

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

What term is defined as the product of multiplying the weights by the Attractiveness Scores in each row of the QSPM? A) Total Attractiveness Scores B) Sum Total Scores C) Weighted Scores D) Total Weighted Scores E) Factors

Which of the following is NOT a current development or trend? A) Efforts to repeal federal laws currently preventing businesses from using GPS devices to monitor employees B) Tracking the location of employees through company provided hand-held devices C) The use of smartphones as hotel room keys D) Desktop videoconferencing E) Assertions by employees that employers are invading their privacy with various monitoring practices

Which stage of the strategy-formulation framework includes an IFE Matrix and the Competitive Profile Matrix? A) Input B) Matching C) Decision D) Penetration E) Research

B) distinctive competencies.

A firm's strengths that cannot be easily matched or imitated by competitors are called A) internal audits. B) distinctive competencies. C) external audits. D) interrelated properties. E) internal properties Ch 4 p. 92

True

A form of customer analysis is administering customer surveys. Ch 4 p. 100

True

A limitation of financial ratios is the fact that they are based on accounting data. Ch 4 p. 105

D) organizational culture.

A pattern of behavior developed by an organization as it learns to cope with its problems of external adaptation and internal integration, and that has worked well enough to be considered valid and to be taught to new members as the correct way to perceive, think, and feel is called A) dysfunctional behavior. B) groupthink. C) behavior modification. D) organizational culture. E) internal audit effect Ch 4 p. 94

True

A recent study reported that the stock price appreciation of technology companies in the lowest third of R&D spending have consistently outperformed companies in the highest third over 1-, 3-, 5-, and 10-year periods since 1977. Ch 4 p. 111

D) not easily substitutable.

A resource is valuable if it is rare, hard to imitate, or A) expensive. B) inexpensive. C) easily substitutable. D) not easily substitutable. E) inefficient. Ch 4 p. 93

True

A ritual is a standardized set of behaviors used to manage anxieties. Ch 4 p. 94 (Table 4-1)

D) ritual.

A standardized set of behaviors used to manage anxieties is called a A) folktale. B) rite. C) metaphor. D) ritual. E) value. Ch 4 p. 94 (Table 4-1)

Medium-sized firms tend to use which type of structure? A) Divisional B) Matrix C) SBU D) Functional E) Centralized

A) Divisional

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) indifference and apathy

Which stage of the strategy-formulation framework contains the IFE Matrix? Question 17 options: A) Input stage B) Analysis stage C) Matching stage D) Decision stage E) Output stage

A) input stage

In the BCG Matrix, how would a division with a low relative market share position in a high growth industry be described? Question 14 options: A) Question Mark B) Cash Cow C) Star D) Stuck-in-the-middle E) Dog

A) question mark

What would an appropriate SP axis number for Apple Inc.?

A.+ 6 B.+ or - 7 *C.- 6* D.- 1 E.+ 1

Fill in the two blanks. An industry can be stable or unstable on SP, yet high or low on IP. The smartphone industry, for instance, would be unstable (_____) on SP yet high-growth on IP, whereas the canned food industry would be stable (_____) on SP yet low-growth on IP.

A.-2; -6 B.-3; -3 C.-6; -6 D.-2; -2 *E.-6; -2*

If a company has high customer loyalty, such as Harley-Davidson's, what rating would be appropriate for that factor in a SPACE Matrix?

A.-7 on SP axis *B.-1 on CP axis* C.-1 on SP axis D.+7 on CP axis E.+1 on CP axis

Four companies-A, B, C, and D-have revenues of 1, 2, 3, and 4, respectively. Company C develops a BCG Matrix. What would the RMSP be for company C if all four firms have the same net income?

A.0.40 B.0.50 C.0.20 *D.0.30* E.0.25

For maximum effectiveness, how many board of director members should there be for a company, according to Lublin and Yermack?

A.17 B.15 C.11 D.13 *E.9*

Any industry whose annual growth in sales exceeds ______ percent could be considered to have rapid growth.

A.20 B.25 *C.5* D.10 E.15

If a corporation's profits are $120, and its three divisions have $30, $80, and $10 of profits respectively, and equal revenues, what percent is the pie slice in Division 3?

A.25.0 B.12.5 C.33.3 *D.8.33* E.None of the above

Women make up only ______ percent of board members at companies in the S&P 500, but in 2014, ______ percent of new board members appointed were women.

A.39; 49 B.9; 19 *C.19; 29* D.29; 39 E.49; 59

Going clockwise beginning with the top axis, what are the four axes of a SPACE Matrix?

A.AP, BP, CP, and DP B.SP, CP, FP, and IP C.CP, FP, IP, and SP *D.FP, IP, SP, and CP* E.IP, SP, CP, and FP

__________ is the unique way an organization does business. It is the human dimension that creates solidarity and meaning, and it inspires commitment and productivity in an organization when strategy changes are made.

A.Humanity *B.Culture* C.Synergy D.Management E.Accountability

Which statement below is false?

A.In a QSPM, if you assign an AS score to one strategy, then assign an AS score(s) to the other-in other words, if one strategy receives a dash, then all others must receive a dash in a given row. B.In a QSPM, never rate one strategy and not the other. C.In a QSPM, an AS value of 4 is 33 percent more important than a 3. D.If you have more than one strategy in the QSPM, then let the AS scores range from 1 to "the number of strategies being evaluated." *E.All statements are true.*

The _________ Matrix determines the relative attractiveness of various strategies based on the extent that key external and internal factors are capitalized on or improved.

A.Internal-External (IE) *B.QSPM* C.SPACE D.SWOT E.BCG

What is a major limitation of the BCG Matrix?

A.Many businesses fall right in the middle of the BCG Matrix and thus are not easily classified. B.The BCG Matrix does not reflect whether various divisions or their industries are growing over time. C.Other variables besides the two used-such as size of the market and competitive advantages-are important in making strategic decisions about various divisions. D.A and B *E.A, B, and C*

What are the four types of strategies generated by a SWOT analysis?

A.SO, ST, SW, and SS B.WO, WT, WS, and SS C.SO, SW, ST, and WW *D.SO, WO, ST, and WT* E.SW, ST, WO, and WT

Which statement is a limitation of the SWOT?

A.SWOT is a static assessment (or snapshot) in time. B.SWOT analysis may lead the firm to overemphasize a single internal or external factor in formulating strategies. C.There are no weights, ratings, or numbers in a SWOT analysis. D.SWOT does not show how to achieve a competitive advantage, so it must not be an end in itself. *E.All of the above.*

Which statement below is false?

A.Successful strategists do a lot of chatting and informal questioning to stay abreast of how things are progressing and to know when to intervene. B.Successful strategists lead strategy but do not dictate it. They give few orders, announce few decisions, depend heavily on informal questioning, and probe and clarify until a consensus emerges. C.Successful strategists ensure that all major power bases within an organization are represented in, or have access to, top management. D.A & C *E.None of the above*

Which statement below is false?

A.Successful strategists let weakly supported ideas and proposals die through inaction. B.Successful strategists establish additional hurdles or tests for strongly supported ideas considered unacceptable but not openly opposed. C.Successful strategists keep a low political profile on unacceptable proposals and strive to let most negative decisions come from subordinates or a group consensus. D.A & B *E.None of the above.*

Which statement below is false?

A.There is no limit to the number of strategies that can be evaluated or the number of sets of strategies that can be examined at once using the QSPM. *B.In a QSPM, the range for Total Attractiveness Scores is 1 = not attractive, 2 = somewhat attractive, 3 = reasonably attractive, and 4 = highly attractive.* C.The magnitude of the difference between the STAS in a given set of QSPM strategic alternatives indicates the relative desirability of one strategy over another. D.The QSPM weights are identical to those in the EFE Matrix and IFE Matrix. E.Work row by row in developing a QSPM.

What is Rudin's Law?

A.When a crisis forces choosing among alternatives, most people guess at the best option. *B.When a crisis forces choosing among alternatives, most people choose the worst possible one.* C.When a crisis forces choosing among alternatives, most people choose a bad option. D.When a crisis forces choosing among alternatives, most people do not choose the best option. E.When a crisis forces choosing among alternatives, most people panic.

In a BCG Matrix, divisions in Quadrant III (lower left) have a high relative market share position but compete in a low-growth industry. They are called _______________.

A.question marks *B.cash cows* C.laggards D.stars E.dogs

In a BCG Matrix, ____________ is defined as the ratio of a division's own market share (or revenues) in a particular industry to the market share (or revenues) held by the largest rival firm in that industry.

A.rival market share B.market share position *C.relative market share position* D.market share E.rival market share position

In both the BCG and IE Matrices, the size of each circle represents the percentage of _______ contribution of each division, and pie slices reveal the percentage of _____ contribution of each division to the company.

A.sales; net income B.revenues; earnings C.sales; profits *D.A, B, and C* E.revenues; retained earnings

True

According to James Van Horne the functions of finance & accounting comprise three decisions: the investment decision, the financing decision, and the dividend decision. Ch 4 p. 103

The three basic functions of finance, according to James Van Horne, are the investment decision, the financing decision, and the dividend decision. The investment decision is the allocation and reallocation of capital and resources to projects, products, assets, and divisions of an organization. The financing decision determines the best capital structure for the firm and includes examining various methods by which the firm can raise capital. Dividend decisions concern issues such as the percentage of earnings paid to stockholders, the stability of dividends paid over time and the repurchase of stock.

According to James Van Horne, what are the three decisions that comprise the functions of finance? Describe each function. Ch 4 p. 103

The five basic functions or decision areas in production are: 1) Process: These decisions include choice of technology, facility layout, process flow analysis, facility location, line balancing, process control, and transportation analysis. Distances from raw materials to production sites to customers are a major consideration; 2) Capacity: These decisions include forecasting, facilities planning, aggregate planning, scheduling, capacity planning, and queuing analysis. Capacity utilization is a major consideration; 3) Inventory: These decisions involve managing the level of raw materials, work-in-process, and finished goods, especially considering what to order, when to order, how much to order, and materials handling; 4) Workforce: These decisions involve managing the skilled, unskilled, clerical, and managerial employees by caring for job design, work measurement, job enrichment, work standards, and motivation techniques; and 5) Quality: These decisions are aimed at ensuring that high-quality goods and services are produced by caring for quality control, sampling, testing, quality assurance, and cost control.

According to Roger Schroeder, there are five basic functions or decision areas in production. Describe these five functions. Ch 4 p. 109 (Table 4-6)

A) Capacity

According to Roger Schroeder, which basic function within production and operations deals with aggregate planning and scheduling? A) Capacity B) Inventory C) Workforce D) Process E) Quality Ch 4 p. 109 Table 4-6

True

According to William King, a task force of managers from different units of the organization should be charged with determining the 20 most important strengths and weaknesses that should influence the future of the organization. Ch 4 p. 92

True

Activity ratios measure how effectively a firm is using its resources. Ch 4 p. 106 (Table 4-4)

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

All of the above

Which of the following is a management issue central to strategy implementation?

All of the above

Which group would be classified as stakeholders?

All of the above (Employees, Governments, Suppliers, Creditors)

When developing a mission statement, what is needed before people can focus on specific strategy formulation activities?

All of the above (Compromise, Eventual agreement, Negotiation)

Which question(s) is answered in an effective mission statement?

All of the above questions are answered in an effective mission statement. (-Geographically, where does the firm compete? -Are employees a valuable asset of the firm? -Is the firm committed to growth and financial soundness? -Who are the firm's customers?)

C) consolidating.

All of the following are basic activities of management EXCEPT A) staffing. B) planning. C) consolidating. D) organizing. E) motivating Ch 4 p. 96

A) value chain analysis.

All of the following are basic functions of marketing EXCEPT A) value chain analysis. B) customer analysis. C) product and service planning. D) pricing. E) distribution. Ch 4 p. 100

A divisional structure by product is most effective when

All of these

False

Allocating resources is one of the five basic activities (functions) performed by managers Ch 4 p. 96

False

Although a useful step in the strategic management process, value chain analysis does little to help a firm monitor whether its prices and costs are competitive. Ch 4 p. 114

E) all of the above

An effective information management system ________ information in such a way that it answers important operating and strategic questions. A) collects B) codes C) stores D) synthesizes E) all of the above Ch 4 p. 112

True

An organization's culture compares to an individual's personality in the sense that no two organizations have the same culture and no two individuals have the same personality. Ch 4 p. 94

D) symbol.

Any object, act, event, quality, or relation used to convey meaning is known as a A) myth. B) rite. C) value. D) symbol. E) metaphor. Ch 4 p. 94 (Table 4-1)

The process of developing a vision and mission statement often includes which of these as the first activity?

Asking managers to read selected articles about vision and mission statements

False

At Google the culture is very rigid, while in contrast the culture at Proctor & Gamble is very informal. Ch 4 p. 94

1) In Rumelt's work, the final broad test of strategy is its A) advantage. B) feasibility. C) consonance. D) consistency. E) distinctiveness

1) Strategy analysis and choice largely involves making ________ decisions based on ________ information. A) long-term; short-term B) subjective; objective C) short-term; long-term D) subjective; short-term E) objective; subjective

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

11) Avoidance, defusion, and confrontation are the classifications for the various types of conflict that can arise in organizations.

11) What type of strategies would you recommend when a firm's SPACE Matrix directional vector has the coordinates (-2, +3)? A) Aggressive B) Conservative C) Competitive D) Defensive E) Integrative

13) Policies largely dictate how structure will be established.

13) When additional stock is issued to finance implementation of strategy, the existing stockholders' ownership and control of the enterprise are strengthened.

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

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.

17) In the Boston Consulting Group (BCG) Matrix, which element represents the industry growth rate in sales, measured in percentage terms? A) X-axis B) Y-axis C) First quadrant D) Second quadrant E) Third quadrant

18) Because activities are organized according to the way work is actually performed, a divisional structure by process is similar to the matrix structure.

18) The percentage-of-sales method should be used for projecting interest and taxes, but not dividends, in the income statements.

19) All of the following are limitations of the Boston Consulting Group (BCG) Matrix EXCEPT A) viewing every business as a star, cash cow, dog or question mark can be an oversimplification. B) the matrix requires at least three years worth of data. C) the matrix does not reflect divisional or industry growth over time. D) the matrix does not allow a company to be classified as somewhere in between two categories. E) variables such as size of market and competitive advantages are not considered in the Matrix.

19) Most quantitative evaluation criteria are geared to long-term objectives rather than annual objectives.

2) An organization's present strategies, objectives, vision, and mission, coupled with the external and internal audit information, provide a basis for A) generating structural strategies, but not evaluating those strategies. B) evaluating structural strategies, but not generating those strategies. C) generating feasible alternative strategies, but not evaluating those strategies. D) evaluating feasible alternative strategies, but not generating those strategies. E) generating and evaluating feasible alternative strategies.

2) Competitive advantage normally is the result of superiority in resources, skills, or A) employees. B) position. C) consistency. D) feasibility. E) governance

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

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.

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.

24) Six Sigma is generally equally successful in retail firms and manufacturing firms.

25) In contingency planning it is crucial that strategists cover all bases

25) The focus of restructuring is changing the way work is actually carried out.

26) Organizational change today should be viewed as a project or event rather than as a continuous process.

27) International financial reporting standards (IFRS) comprise approximately ________ pages. A) 1,000 B) 5,000 C) 10,000 D) 25,000 E) 100,000

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.

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.

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

31) In Japan, performance rather than seniority has traditionally been the key factor in determining pay.

32) Strategists should strive to preserve, emphasize, and build upon aspects of an existing culture that are antagonistic to a proposed strategy.

43) If suppliers are unreliable or too costly, which of these strategies may be appropriate? A) Horizontal integration B) Backward integration C) Market penetration D) Forward integration E) Concentric diversification

47) Which of the following is NOT a published source of external strategic information? A) Periodicals B) Customer surveys C) Journals D) Reports E) Directories

49) A total weighted score of ________ in an External Factor Evaluation (EFE) Matrix indicates that an organization is responding in an outstanding way to existing opportunities and threats in its industry. A) 1.0 B) 4.0 C) 5.0 D) 10.0 E) 100.0

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.

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.

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.

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

8) It is most effective to conduct strategy evaluation annually, at the end of the fiscal year.

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

All of the following are true EXCEPT A) marketing has evolved to be more about building a two-way relationship with consumers. B) in 2015 the number of LinkedIn users was closer to the number of Facebook users than to the number of Twitter users. C) the online community of customers is much quicker, cheaper, and effective to reach than traditional focus groups and surveys. D) successful strategy implementation requires a firm to know what people are saying about it and its products. E) company websites should enable customers to interact with the firm on a variety of social media networks.

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.

In the BCG Matrix, a division with a high relative market share position in a low-growth industry can be described as a A) Star. B) Cash Cow. C) Question Mark. D) Dog. E) Failure.

Strategy analysis and choice largely involves making ________ decisions based on ________ information. A) long-term; short-term B) subjective; objective C) short-term; long-term D) subjective; short-term E) objective; subjective

What is the most widely used technique for determining the best combination of debt and stock? A) Debt-to-Stock Ratio B) Earnings Per Share/Earnings Before Interest and Taxes Analysis C) Gross Profit Analysis D) Capital Asset Pricing Model E) Present Value Analysis

What type of strategies would you recommend when a firm's SPACE Matrix directional vector has the coordinates (-2, +3)? A) Aggressive B) Conservative C) Competitive D) Defensive E) Integrative

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.

Which strategies aim at improving internal weaknesses by taking advantage of external opportunities? A) SO B) WO C) SW D) ST E) WT

Which variable would be considered part of the "product" element of the marketing mix? A) Advertising B) Packaging C) Payment terms D) Inventory levels and location E) Publicity

________ includes the set of shared values, beliefs, attitudes, customs, norms, rites, rituals, personalities, heroes, and heroines that describe a firm. A) Strategy B) Culture C) Mission D) Objectives E) QSPM

Which divisional structure stands out for effectiveness when a few major customers are of paramount importance and many different services are provided to these customers? A) By geographic area B) By customer C) By product D) By process E) By cost

B) By customer

________ includes the set of shared values, beliefs, attitudes, customs, norms, personalities, heroes and heroines that describe a firm. Question 11 options: A) Strategy B) Culture C) Mission D) Objectives E) QSPM

B) Culture

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) Functional structure

A disagreement between two or more parties on one or more issues is called a(n) A) integrated solution. B) conflict. C) compromise. D) diffusion. E) avoidance.

B) conflict.

The primary benefit sought from restructuring is A) employee involvement. B) cost reduction. C) increased morale. D) increased number of hierarchical levels in the organization. E) increased innovation.

B) cost reduction.

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) delivering materials just as they are needed.

Formal statements of organizational philosophy, charters, creeds, materials used for recruitment and selection, and socialization help an organization A) abide by SEC rules. B) link culture to strategy. C) set guidelines for firing. D) increase profits. E) manage conflicts between stakeholders.

B) link culture to strategy.

An effective way to gain commitment and achieve desired results is to Question 12 options: A) emphasize that imposing a particular method is more important than achieving desired results. B) shift from specific to general issues and concerns. C) eliminate middle level managers from strategic decisions. D) switch from long-term to short-term issues and concerns. E) realize that it's better to achieve optimal results with an unpopular strategy than to achieve satisfactory results with a popular strategy.

B) shift from specific to general issue and concerns

Strategy analysis and choice largely involves making ________ decisions based on ________ information. Question 8 options: A) long-term; short-term B) subjective; objective C) short-term; long-term D) subjective; short-term E) objective; subjective

B) subjective; objective

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) the switch is boosting employee morale.

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

Backward integration

True

Benchmarking is an analytical tool used to determine whether a firm's value chain activities are competitive compared to rivals Ch 4 p. 114

What is NOT one of the basic ways a divisional structure can be organized?

By cost

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

10) The two positive-rated dimensions on the SPACE Matrix are A) FP and CP. B) CP and SP. C) FP and IP. D) IP and SP. E) FP and SP.

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

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

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

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.

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

17) What is the most complex form of organizational structure? A) Divisional B) SBU C) Matrix D) Functional E) Geographic

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

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

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.

29) To perform an external audit, a company first must A) get an approval from the Securities and Exchange Commission. B) perform an internal audit. C) gather competitive intelligence and information about external trends. D) hire a consultant to develop a comprehensive strategic plan. E) all of the above

3) The match an organization makes between its internal resources and skills and the opportunities and risks created by its external factors can be defined as A) input. B) concept formulation. C) strategy. D) SWOT. E) weakness.

30) Collecting and evaluating information on competitors is essential for successful A) internal analysis. B) strategy evaluation. C) strategy formulation. D) strategy implementation. E) strategy correction.

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.

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.

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

41) Intensity of competition in lower-return industries. A) is lowest B) is nonexistent C) is highest D) is not important E) fluctuates

45) A systematic and ethical process for gathering and analyzing information about the competition's activities and general trends to further a business' own goals is called A) unethical business practices. B) artificial intelligence. C) competitive intelligence. D) industrial espionage. E) competitive advantage.

50) What is the range for a firm's total weighted score in an External Factor Evaluation Matrix? A) 0 to 4 B) 0 to 5 C) 1 to 4 D) 1 to 5 E) 0 to 10

52) The critical success factors in a Competitive Profile Matrix and EFE Matrix include A) internal but not external issues. B) external but not internal issues. C) both internal and external issues. D) neither internal or external issues. E) only non-quantifiable data.

6) Which of the following is a limitation associated with a SWOT Matrix? A) Viewing every business as a Star, Cash Cow, Dog, or Question Mark is an oversimplification. B) Many businesses fall right in the middle of the matrix. C) It is a static assessment in time. D) Other variables besides relative market share position and industry growth rate in sales need to be considered. E) The matrix does not reflect whether or not various divisions or their industry are growing over time.

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.

In preparing projected statements, to project cost of goods sold in the income statement, which of these methods is recommended? A) Net Worth Method B) Net Income Method C) Percentage-of-Sales Method D) Price-Earnings Ratio method E) Outstanding Shares Method

R&D employees and managers perform all of the following tasks EXCEPT A) transferring complex technology. B) altering products to particular tastes and specifications. C) researching resource availability. D) adapting processes to local markets. E) adjusting processes to local raw materials.

The match an organization makes between its internal resources and skills and the opportunities and risks created by its external factors can be defined as A) input. B) concept formulation. C) strategy. D) SWOT. E) weakness.

Which board of director's duty falls under the category of control and oversight over management? A) Select new directors B) Pass bylaws and related resolutions C) Select the CEO D) Maintain good public image E) Ensure equitable stockholder representation

Which of the following is a limitation associated with a SWOT Matrix? A) Viewing every business as a Star, Cash Cow, Dog, or Question Mark is an oversimplification. B) Many businesses fall right in the middle of the matrix. C) It is a static assessment in time. D) Other variables besides relative market share position and industry growth rate in sales need to be considered. E) The matrix does not reflect whether or not various divisions or their industry are growing over time.

Which of the following variables is NOT directly affected by market segmentation? A) Product B) Place C) Process D) Promotion E) Price

Which of these is a limitation of QSPM? A) Only a few strategies can be evaluated at once. B) It is prohibitively expensive. C) It requires intuitive informed judgments. D) Strategies cannot be examined sequentially. E) It makes it more likely that key factors will be overlooked or weighted inappropriately.

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.

Why is market segmentation an important variable in the strategy-implementation process? A) Company strategies do not require increased sales through new markets and products. B) It allows a firm to operate with no resources. C) It directly affects marketing mix variables. D) It allows a firm to minimize per-unit profits and per-segment sales. E) All of the above

What change strategy involves giving orders and enforcing those orders? A) Self-interest B) Educative C) Force D) Rational E) Diffusion

C) Force

Which of the following is a limitation associated with a SWOT Matrix? Question 19 options: A) Viewing every business as a Star, Cash Cow, Dog, or Question Mark is an oversimplification. B) Many businesses fall right in the middle of the matrix. C) It is a static assessment in time. D) Other variables besides relative market share position and industry growth rate in sales need to be considered. E) The matrix does not reflect whether or not various divisions or their industry are growing over time.

C) It is a static assessment in time

What is the most complex form of organizational structure? A) Divisional B) SBU C) Matrix D) Functional E) Geographic

C) Matrix

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.

C) They should use terms like "maximize," "minimize," and "as soon as possible."

The match an organization makes between its internal resources and skills and the opportunities and risks created by its external factors can be defined as Question 9 options: A) input. B) concept formulation. C) strategy. D) SWOT. E) weakness.

C) strategy

False

Capacity decisions concern distances from raw materials to production sites to customers. Ch 4 p. 109

In the BCG Matrix, a division with a high relative market share position in a low-growth industry can be described as a

Cash Cow

The Family Farmer Bankruptcy Act of 1986 created which of the major types of bankruptcy?

Chapter 12

Which chapter of the bankruptcy code applies to municipalities?

Chapter 9

True

Chief marketing officers now spend more than 50 percent of their budgets on technology to manage activities like online marketing and social media. Ch 4 p. 101

What type of strategies would you recommend when a firm's SPACE Matrix directional vector has the coordinates (-2, +3)?

Conservative

True

Constructing an Internal Factor Evaluation Matrix is a summary step when conducting an internal strategic-management audit. Ch 4 p. 116

True

Cultural products include values, beliefs, stories, and language Ch 4 p. 94 (Table 4-1)

The critiqued mission statements of PepsiCo and Royal Caribbean; both lacked the following component(s).

Customer

The following excerpt from a mission statement illustrates which of the nine essential components of a mission statement? "We believe our first responsibility is to the doctors, nurses, patients, mothers, and all others who use our products and services."

Customers

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

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.

18) In the Boston Consulting Group (BCG) Matrix, which strategy would be most appropriate for a division classified as a Dog? A) Market penetration B) Market development C) Product development D) Retrenchment E) Forward integration

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.

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.

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.

21) What analytical tool has four quadrants based on two dimensions: competitive position and market growth? A) Competitive Profile Matrix (CPM) B) Internal-External (IE) Matrix C) Strategic Position and Action Evaluation (SPACE) Matrix D) Grand Strategy Matrix E) Quantitative Strategic Planning Matrix (QSPM)

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

26) All of the following are principles of good organizational governance, as established by BusinessWeek, EXCEPT A) each director attends at least 75 percent of all meetings. B) the audit, compensation and nominating committees are made up solely of outside directors. C) each director owns a large equity stake in the company. D) at least three directors are current or former company executives. E) the CEO is not also the Chairperson of the Board.

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

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

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.

32) According to I/O theorists, which of the following contributes LEAST to firm's performance? A) Economies of scale B) Barriers to market entry C) Product differentiation D) Internal resources E) Level of competitiveness

34) The world population is expected to grow to an estimated billion in 2054. A) 6 B) 7 C) 8 D) 9 E) 10

36) Which state has the highest union membership rate? A) Arkansas B) Colorado C) New Hampshire D) New York E) North Carolina

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

42) According to Porter, what is usually the most powerful of the five competitive forces? A) Potential development of substitute products B) Bargaining power of suppliers C) Bargaining power of consumers D) Rivalry among competing firms E) Potential entry of new competitors

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.

5) Which of the following is NOT one of the steps involved in constructing a SWOT Matrix? A) List the firm's key external threats. B) Match internal strengths with external opportunities, and record the resultant SO strategies in the appropriate cell. C) Match internal strengths with external threats, and record the resultant ST strategies. D) List the firm's external weaknesses. E) List the firm's external opportunities.

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.

8) The two internal dimensions represented on the axes of the SPACE Matrix are A) stability position and industry position. B) industry position and internationalization. C) internationalization and competitive position. D) competitive position and financial position. E) financial position and stability position.

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.

According to the Grand Strategy Matrix, organizations in which quadrant have a strong competitive position but are in a slow-growth industry? A) I B) II C) III D) IV E) V

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.

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.

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

What portion of the firms going public in 2014 were unprofitable? A) Less than one tenth B) About one quarter C) About one half D) Nearly three quarters E) Nearly all

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.

Which of these is NOT a SPACE Matrix quadrant? A) Aggressive B) Defensive C) Competitive D) Offensive E) Conservative

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.

Why do changes in company strategy often require changes in the way an organization is structured? A) Structure dictates how objectives and policies will be established. B) Structure dictates how resources will be allocated. C) Structure should be designed to facilitate the strategic pursuit of a firm. D) All of the above E) None of the above

D) All of the above

Which approach for managing and resolving conflict involves playing down differences between conflicting parties, while accentuating similarities and common interests? A) Avoidance B) Resistance C) Compliance D) Diffusion E) Confrontation

D) Diffusion

In the BCG Matrix, which strategy would be most appropriate for a division classified as a Dog? Question 10 options: A) Market penetration B) Market development C) Product development D) Retrenchment E) Forward integration

D) Retrenchment

Which strategies use a firm's strengths to avoid or reduce the impact of external threats? Question 4 options: A) SO B) WO C) SW D) ST E) WT

D) ST

All of the following are principles of good organizational governance, as established by Businessweek, EXCEPT Question 18 options: A) each director attends at least 75 percent of all meetings. B) the audit, compensation and nominating committees are made up solely of outside directors. C) each director owns a large equity stake in the company. D) at least three directors are current or former company executives. E) the CEO is not also the Chairperson of the Board.

D) at least three directors are current or former company executives

Aspects of an existing culture that are antagonistic to a proposed strategy should be A) preserved. B) emphasized. C) built upon. D) changed. E) celebrated.

D) changed.

All of the following are examples of offerings at companies to promote a corporate wellness culture EXCEPT A) stress management programs. B) health fairs. C) abundance of bicycle racks onsite. D) free health insurance for employees who exercise regularly. E) cash incentives for completing Ironman triathlons.

D) free health insurance for employees who exercise regularly.

When developing an organizational chart, you should A) recommend dual titles for executives. B) use the title "president" for the top executive of the firm. C) make sure that the chief financial officer is not at the same level as the chief operating officer (COO). D) have division presidents report to a chief operating officer (COO). E) have employees report to more than one person in the chain of command.

D) have division presidents report to a chief operating officer (COO).

"All of our locations will be open at least two evenings per week until 8:30 p.m." is an example of a(n) A) administration. B) goal. C) objective. D) policy. E) procedure.

D) policy.

A change strategy that attempts to convince people that the change is to their personal advantage is A) diffusion. B) force. C) educative. D) rational. E) compromise.

D) rational.

Cultural products are levers that strategists can use to influence and direct strategy formulation, implementation, and evaluation activities. Students can list any six of the following: rites, ceremonies, rituals, myths, sagas, legends, stories, folktales, symbols, language, metaphors, values, beliefs, and heroes/heroines

Define cultural products and give six examples of them Ch 4 p. 94 (Table 4-1)

Which approach for managing and resolving conflict involves playing down differences between conflicting parties, while accentuating similarities and common interests?

Defusion

The controlling function of management includes all of those activities undertaken to ensure that actual operations conform to planned operations, and is particularly important for effective strategy evaluation. Controlling consists of four basic steps: 1) establishing performance standards; 2) measuring individual and organizational performance; 3) comparing actual performance to planned performance standards; and 4) taking corrective actions.

Describe the controlling function of management. Include the four basic steps that comprise this function in your description. Ch 4 p. 99

What is the first step in the comprehensive strategic-management model?

Developing vision and mission statements

Recent research reveals that the most effective marketing methods for firms with fewer than 500 employees is the company website (50 percent), Facebook and/or other social media sites such as Twitter (27 percent), and yellow pages and other (23 percent). Advertising on television is on a downward spiral, according to Time Warner, Discovery Communications, and CoEssayast. Heavy marketers, such as Allstate and Mondelez International, now openly speak about shifting TV ad dollars to digital platforms. Chief marketing officers (CMOs), such as Eduardo Conrado at Motorola, now spend more than 50 percent of the budget on technology to manage activities such as online marketing and social media. Marketing is becoming technical, with software to track and target customers and manage customer relationships, predict consumer behavior, run online storefronts, analyze social media, manage websites, and craft targeted advertisements. With the proliferation of e-books, marketers are experimenting more and more with advertising to consumers as they read e-books.

Discuss how technology has affected advertising and other marketing activities Ch 4 p. 100-101

The first step is to list 20 internal factors, including strengths and weaknesses, using percentages, ratios and comparative numbers. The second step is to assign a weight that ranges from 0.00 (not important) to 1.0 (all-important) to each factor based on its relative importance to being successful in the firm's industry. The third step is to assign a 1 to 4 rating to each factor to indicate whether that factor represents a major weakness, a minor weakness, a major strength, or a minor strength. Next, multiply each factor's weight by its rating to determine a weighted score for each variable. Finally, sum the weighted scores for each variable to determine the total weighted score for the organization.

Discuss the five steps involved in performing an Internal Factor Evaluation (IFE) Matrix. Ch 4 p. 116

There are some limitations of financial ratio analysis. The first is that financial ratios are based on accounting data, and firms differ in their treatment of such items as depreciation, inventory valuation, R&D expenditures, pension plan costs, mergers, and taxes. Second, seasonal factors can influence comparative ratios. A third limitation is that departures from industry averages do not always indicate a firm is doing especially well or badly.

Discuss the limitations of financial ratio analysis Ch 4 p. 105

The analysis should be conducted on three separate fronts: 1. How has each ratio changed over time? This information provides a means of evaluating historical trends. It is important to note whether each ratio has been increasing, decreasing, or nearly constant historically. For example, a 10 percent profit margin could be bad if the trend has been down 20 percent each of the last three years. But a 10 percent profit margin could be excellent if the trend has been up. Therefore, calculate the percentage change in each ratio from one year to the next to assess historical financial performance on that dimension. Identify and examine large percent changes in a financial ratio from one year to the next. 2. How does each ratio compare to industry norms? A firm's inventory turnover ratio may appear impressive at first glance, but may pale when compared to industry standards or norms. Industries can differ dramatically on certain ratios. For example, grocery companies such as Kroger have a high inventory turnover whereas automobile dealerships have a lower turnover. Therefore, comparison of a firm's ratios within its particular industry can be essential in determining strength/weakness. 3. How does each ratio compare with key competitors? Oftentimes competition is more intense between several competitors in a given industry or location than across all rival firms in the industry. When this is true, financial ratio analysis should include comparison to those key competitors. For example, if a firm's profitability ratio is trending up over time and compares favorably to the industry average, but it is trending down relative to its leading competitor, there may be reason for concern.

Discuss the three separate fronts on which an effective financial ratio analysis is conducted Ch 4 p. 104-105

False

Distribution becomes especially important when a firm is striving to implement a product development or diversification. Ch 4 p. 102

C) warehousing.

Distribution includes A) customer analysis. B) pricing. C) warehousing. D) advertising. E) test marketing. Ch 4 p. 102

Procter & Gamble's (P&G) sale of many of its brands in order to focus on its core brands is an example of which type of strategy?

Divestiture

Which term refers to selling a division or part of an organization?

Divestiture

Which of the following is NOT a characteristic that describes the most competitive companies in

Divestiture is essential to growth.

True

Dividend decisions concern issues such as the percentage of earnings paid to stockholders, the stability of dividends paid over time, and the repurchase of stock. Ch 4 p. 104

Which level of strategy is most likely NOT present in small firms?

Divisional

All of the following utility statements are relevant in developing a mission statement EXCEPT

Do not offer me ideas, emotions, ambience, feelings, and benefits. Offer me things.

Who is referred to as "the father of modern management"?

Drucker

True

During the 2015 Super Bowl, a 30-second advertisement cost over $4 million. Ch 4 p. 100

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

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

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

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

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

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

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

20) Which of the following analytical tools consists of a nine-cell matrix? A) Boston Consulting Group (BCG) Matrix B) Competitive Profile Matrix (CPM) C) Strategic Position and Action Evaluation (SPACE) Matrix D) Grand Strategy Matrix E) Internal-External (IE) Matrix

25) Which of the following is the first step in developing a QSPM? A) Compute the Total Attractiveness Scores. B) Examine the Stage 2 matrices and identify alternative strategies the organization should consider implementing. C) Assign weights to each key external and internal factor. D) Determine the Attractiveness Scores. E) Make a list of the firm's key external opportunities and threats and internal strengths and weaknesses in the left column of the QSPM

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.

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.

31) The process of performing an external audit should involve A) key representatives from each stakeholder group. B) as many stakeholders as possible. C) only strategists. D) primarily strategists. E) as many managers and employees as possible.

33) It is predicted that the United States will have no racial or ethnic majorities by the year A) 2035. B) 2045. C) 2055. D) 2065. E) 2075.

35) Who are the world's longest-living people? A) Americans B) Mexicans C) Indians D) Filipinos E) Japanese

37) Changes in which of the following can significantly affect firms? A) Patent laws B) Antitrust legislation C) Tax rates D) Lobbying activities E) All of the above

39) All of the following are political, governmental, and legal variables that can represent key opportunities or threats to organizations EXCEPT A) tariffs. B) environmental regulations. C) level of defense expenditures. D) legislation on equal employment. E) population changes by race, age, sex, and level of affluence.

4) How many cells are in a SWOT Matrix? A) Two B) Four C) Six D) Eight E) Nine

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

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

Forward integration would be an appropriate strategy for which of the following types of divisions in the Boston Consulting Group (BCG) Matrix? A) Dogs B) Failures C) Question Marks D) Cat E) Star

How many cells are in a SWOT Matrix? A) Two B) Four C) Six D) Eight E) Nine

Which analytical tool determines the relative attractiveness of various strategies based on the extent to which key external and internal critical success factors are capitalized upon or improved? A) Boston Consulting Group (BCG) Matrix B) Strategic Position and Action Evaluation (SPACE) Matrix C) Strengths-Weaknesses-Opportunities-Threats (SWOT) Matrix D) Internal-External (IE) Matrix E) Quantitative Strategic Planning Matrix (QSPM)

Which of the following analytical tools consists of a nine-cell matrix? A) Boston Consulting Group (BCG) Matrix B) Competitive Profile Matrix (CPM) C) Strategic Position and Action Evaluation (SPACE) Matrix D) Grand Strategy Matrix E) Internal-External (IE) Matrix

Which stage in the strategy-formulation framework focuses on generating feasible alternative strategies? A) Input B) Output C) Decision D) Throughput E) Matching

What makes market segmentation an important variable in strategy implementation

E All of the above

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) All of the above

Which approach for managing and resolving conflict involves exchanging members of conflicting parties so that each can gain an appreciation of the other's point of view? A) Avoidance B) Resistance C) Compliance D) Diffusion E) Confrontation

E) Confrontation

In 2017, which governmental entity will impose penalties up to $450 on any employee who fails to undergo certain health screenings or treatment plans? A) City of Boston B) City of New York C) Hennepin County Minnesota D) State of Massachusetts E) State of Maryland

E) State of Maryland

Which section of the SWOT Matrix involves matching internal strengths with external opportunities? Question 16 options: A) The WT cell B) The SW cell C) The WO cell D) The ST cell E) The SO cell

E) The SO cell

According to the information in the text, how many Fortune 500 have women CEOs? A) Two B) Five C) Twelve D) Eighteen E) Twenty-six

E) Twenty-six

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) all of the above

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) all of the above

E) all of the above

The act of oversight and direction for an organization is referred to as Question 5 options: A) corporate lawmaking. B) centralized control. C) organizational direction. D) establishing norms. E) governance

E) governance

Which stage in the strategy-formulation framework focuses on generating feasible alternative strategies? Question 13 options: A) Input B) Output C) Decision D) Throughput E) Matching

E) matching

The resource-based view (RBV) approach to competitive advantage contends that internal resources are more important than external factors for a firm in achieving and sustaining competitive advantage, in contrast to the I/O theory. According to the RBV, organizational performance is determined by physical resources, human resources, and organizational resources. RBV theory asserts that resources are actually what help a firm exploit opportunities and neutralize threats. The theory also asserts that in order to maintain a competitive advantage, a resource must either be rare, not easily substitutable, or hard to imitate.

Explain the resource-based view and its relation to strategic management. Ch 4 p. 93

The weights and total weighted scores in a Competitive Profile Matrix (CPM) have the same meaning the weights and total weighted scores in a

External Factor Evaluation (EFE).

Which of these examples of a mission statement focus area does NOT identify the utility of the firm's products to its customers?

ExxonMobil focuses on oil and gas rather than energy.

1) An external audit focuses on identifying and evaluating trends and events within the control of management.

10) There are now more American households consisting of married couples with children than of people living alone or with unrelated people.

11) By 2050, the Census Bureau projects that the number of Americans age 100 and older will dramatically decrease.

14) The United States has been more active than other nations in protectionist measures and has engaged in many "Buy American" policies.

17) The increase in high tech manufacturing base in the United States is reflected in the sharp increase in labor union membership in the last decade.

18) Bargaining power of consumers is usually the most powerful of Porter's five competitive forces.

20) Corporate intelligence is the name for a systematic and ethical process for gathering and analyzing information about the competition's activities and general business trends to further a business's own goals.

23) The Fuld & Co. website explains that the term competitive intelligence is a polite way of referring to corporate espionage.

24) Assumptions have no place in planning.

25) While forecasts might not be perfect, they are never wildly inaccurate.

27) A total weighted score of 1.0 for an EFE Matrix indicates that the firm is responding in an outstanding way to existing opportunities and threats in its industry.

28) Regardless of the number of key opportunities and threats included in an External Factor Evaluation Matrix, the highest possible total weighted score for an organization is 4.0, and the lowest possible total weighted score is 0.0.

3) External audits attempt to identify key variables that offer highly intuitive responses.

5) The I/O approach to competitive advantage advocates that internal factors are more important than external factors in a firm achieving competitive advantage.

6) A low value of the dollar means lower exports and higher imports.

8) It is predicted that, by 2050, over 25 percent of the population in the United States will be 65 years or older.

A firm can usually serve two or more market segments with the same strategy.

A firm should pursue defensive strategies if the coordinates of a SPACE directional vector are (+2, +3).

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.

As a balance sheet entry, goodwill represents the favor a business has acquired through its environmentally conscious and socially responsible actions.

Four common corporate Valuation methods are the Net Worth Method, the Net Income Method, the Gross Income Method, and the Outstanding Shares Method.

If the rate of market growth and technical progress is rapid, then in-house R&D is the preferred solution.

Increased costs are a disadvantage of a good information system.

It is vital that strategists always consider all feasible alternatives that could benefit the firm.

Market penetration can be defined as the subdividing of a market into distinct subsets of customers according to needs and buying habits.

Matching competition and positioning factors would allow factories to produce desirable levels without extra shifts, overtime, or subcontracting.

On the x-axis of the IE Matrix, an IFE total weighted score of 2.5 represents a weak internal position.

One of the four recommended approaches for determining a firm's worth is to base the analysis on the selling price of a similar company.

One positive feature of QSPM is that it does not require intuitive judgments and educated assumptions.

Shifting focus from general issues to specific issues generally helps strategists gain commitment and achieve desired results.

The effects of the Sarbanes-Oxley Act include increased inflation of financial projections.

The first stage of the strategy-formulation framework is the input stage, and it is directly followed by the decision stage.

The midpoint on the x-axis of a Boston Consulting Group (BCG) Matrix is typically set at 0.05.

The online community of customers is more expensive to reach than traditional focus groups and surveys.

The primary sources of capital are known as debt and EPS.

The trend in the United States is toward larger boards of directors, with an average of 18 members being the norm.

There are five component variables in the marketing mix: product, place, promotion, price, and people.

To be a price leader or a price follower is a decision that may require finance/accounting policies.

Too much debt in the capital structure of an organization can endanger stockholders' returns and jeopardize company survival, particularly in periods of high earnings.

Total attractiveness scores are defined as the sum of the attractiveness scores in a given column of the QSPM and are computed in the second step of the Quantitative Strategic Planning Matrix (QSPM).

Trying to achieve optimal results with an unpopular strategy is always better than achieving satisfactory results with a popular strategy.

When additional stock is issued to finance implementation of strategy, the existing stockholders' ownership and control of the enterprise are strengthened.

When completing the matching stage of the strategy-formulation framework, the SWOT Matrix needs to be completed before the SPACE Matrix.

"If it ain't broke, don't fix it" refers to managing by crisis.

FALSE

A differentiation strategy can only be achieved with a large target market.

FALSE

A growing trend is for franchisers to buy out their part of the business from their franchisees.

FALSE

A secondary buyout occurs when a corporation's shares are bought by the company's management and other private investors using borrowed funds.

FALSE

Although bankruptcy can be an effective type of retrenchment strategy, it does not allow firms to avoid major debt obligations and to void union contracts.

FALSE

Avoidance, diffusion, and confrontation are the classifications for the various types of conflict that can arise in organizations.

FALSE

Because a combination strategy bears no risk, many organizations pursue a combination of two or more strategies simultaneously.

FALSE

Changing a strategy to fit an existing culture is usually more effective than changing a firm's culture to fit a new strategy.

FALSE

Chapter 13 bankruptcy is similar to CH. 11, but available only to large corporations.

FALSE

Companies are avoiding outsourcing more and more because it is more expensive than traditional methods and it does not allow a firm to concentrate on its core business.

FALSE

Divestiture has become a popular strategy for firms to become more diversified

FALSE

Divestiture is selling all of a company's assets, in parts, for their tangible worth.

FALSE

Effective strategy formulation can usually guarantee successful strategy implementation.

FALSE

Horizontal consistency is less important than vertical consistency in developing annual objectives, but it still contributes to improved objectives.

FALSE

If a firm's present suppliers are expensive and unreliable in meeting the firm's needs for parts components, and/or raw materials, the firm should pursue a horizontal integration strategy.

FALSE

In Japan, performance rather than seniority has traditionally been the key factor in determining pay.

FALSE

In publicly held U.S. companies it is becoming increasingly common to combine the positions of chairperson of the board and the CEO.

FALSE

In the context of conflict management and resolution, ignoring the problem in the hopes that the conflict will resolve itself is classified as a diffusion technique.

FALSE

Organizational change today should be viewed as a project or event rather than as a continuous process.

FALSE

Policies largely dictate how structure will be established.

FALSE

Research indicates that strategic management in small firms is more formal than in large firms.

FALSE

Strategic objectives include associated with growth in revenues, growth in earnings, higher dividends, larger profit margins, and improved cash flow.

FALSE

Strategies clarify what can and cannot be done in pursuit of an organization's objectives.

FALSE

Strategists in governmental organizations operate with far more strategic autonomy than their counterparts in private firms.

FALSE

Tasks and activities are grouped together by business function in a divisional organizational structure.

FALSE

The focus of restructuring is changing the way work is actually carried out.

FALSE

The purchase of 80% of Proctor & Gamble's pet-food brands by Mars Inc., best known for its M&M chocolates and its Mars and Snickers candy bars, is n example of related diversification.

FALSE

The work and family issue is overwhelmingly a women's issue.

FALSE

To succeed, a differentiation strategy depends on the existence of many different niches and segments within a market, thereby allowing a focuser to pick a competitively attractive niche suited to its own resources.

FALSE

Unrelated diversification may be an especially effective strategy when an organization's basic industry is experiencing increasing annual sales and profits.

FALSE

When the correlation between dollar sales and dollar marketing expenditures has historically been low, marketing penetration is an appropriate strategy.

FALSE

A SWOT matrix is composed of four cells for the four types of strategies it creates

False

A firm can usually serve two or more market segments with the same strategy.

False

Effective strategy formulation can usually guarantee sucessful strategy implementation

False

Horizontal consistency is less important than vertical concistency in developing annual objectives, but it still contributes to improved objectives.

False

Horizontal consistency is less important than vertical consistency in developing annual objectives, but it still contributes to improved objectives.

False

Implementing strategy affects all the functional areas of a business and divisional areas of a business

False

In Japan, performance rather than seniority has traditionally been the key factor in determining pay.

False

In the context of conflict management and resolution, ignoring the problem in the hopes that the conflict will resolve itself is classified as a defusion technique.

False

It is vital that strategists always consider all feasible alternatives that could benefit the firm

False

JIT significantly increases the costs of implementing strategies.

False

Six Sigma is generally equally successful in retail firms and manufacturing firms.

False

Stage 2 in the strategy formulation framework involves the quantitative strategic planning matrix

False

The SWOT matrix, if used appropriately, does not have any limitations.

False

The first stage of the strategy-formulation framework is the input stage, and it is directly followed by the decision stage

False

The online community of customers is more expensive to reach than traditional focus groups and surveys

False

The online community of customers is more expensive to reach than traditional focus groups and surveys.

False

The primary sources of capital are known as debt and EPS.

False

The work and family issue is overwhelmingly a women's issue.

False

When completing the matching stage of the strategy-formulation framework, the SWOT matrix needs to be completed before the SPACE matrix

False

With a divisional structure, it is possible that competition between divisions may become so intense that it leads to improved sharing of ideas and resources for the common good of the firm.

False

Financial ratio analysis becomes less useful if one goes beyond the actual calculation and interpretation of each individual ratio. Ch 4 p. 104-105

False

Financial ratios are not applicable to nonprofit organizations Ch 4 p. 103 (bottom of page)

True

Five major stakeholders that affect pricing decisions are consumers, governments, suppliers, distributors, and competitors. Ch 4 p. 101

True

For a resource to be valuable, it must be either rare, hard to imitate, or not easily substitutable. Ch 4 p. 93

E) "late follower."

For many firms a key decision with great bearing on Research and Development (R&D) spending is whether to be a "first mover" or a A) "first activator." B) "second mover." C) "average player." D) "tech leader." E) "late follower." Ch 4 p. 111

What are educated assumptions about future trends and events called?

Forecasts

Amazon's start of rapid delivery services in some U.S. cities is an example of which type of strategy?

Forward integration

Websites that sell products directly to consumers are examples of which type of strategy?

Forward integration

The four commonly-used approaches to determining R&D budget allocations are: 1) financing as many project proposals as possible; 2) using a percentage-of-sales method; 3) budgeting about the same amount competitors spend for R&D; and 4) deciding how many successful new products are needed and working backward to estimate the required R&D investment.

Four basic approaches exist to determine R&D budget allocations. What are these approaches? Ch 4 p. 111

True

Four common approaches to determine R&D budget allocations are: 1) finance as many project proposals as possible; 2) use a percentage-of-sales method; 3) budget for R&D about what competitors spend; or 4) decide how many successful new products are needed and work backwards to estimate the required R&D investment. Ch 4 p. 111

Which organizational structure is the most widely used?

Functional

An organizations present strategies, objectives, vision, and mission, coupled with the eternal and internal audit information, provide a basis for

Generating and evaluating feasible alternative strategies

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

Generating, evaluating, and selecting strategies

What refers to a strategy of seeking ownership of, or increased control over a firm's competitors?

Horizontal integration

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

Although a firm positioned in Quadrant _____ of the Grand Strategy Matrix is in a growing industry, it is unable to compete effectively and needs to determine why the firm's current approach is ineffective and how to best change to improve competitiveness.

All of the following are true EXCEPT

IN 2015 the number of LinkedIn users was closer to the number of Facebook users than to the number of Twitter users

Which stage of the strategy formulation framework includes the IFE matrix

INput Stage

The five basic functions of management are planning, organizing, motivating, staffing, and controlling. Planning consists of all those managerial activities related to preparing for the future, such as forecasting, establishing objectives, devising strategies, and developing policies. Organizing includes all those managerial activities that result in a structure of task and authority relationships, such as organizational design, job specialization, job descriptions, span of control, coordination, job design, and job analysis. Motivating involves efforts directed toward shaping human behavior. Specific topics include leadership, communication, work groups, behavior modification, delegation of authority, job enrichment, job satisfaction, needs fulfillment, organizational change, employee morale, and managerial morale. Staffing refers to human resource (HR) activities, such as wage and salary administration, employee benefits, interviewing, hiring, firing, training, management development, employee safety, equal employment opportunity, and union relations. Controlling refers to all those managerial activities directed toward ensuring that actual results are consistent with planned results. Key areas of concern include quality control, financial control, sales control, inventory control, expense control, analysis of variances, rewards, and sanctions.

Identify the five basic functions of management, and describe each function. Ch 4 p. 96-99

________ is NOT a basic mission of a competitive intelligence program.

Identifying industry executives who could be hired by the firm

C) 1,000

If total fixed costs are $10,000, variable costs per unit are $5, and the price per unit is $15, what is the breakeven quantity? A) 500 B) 667 C) 1,000 D) 2,000 E) 5,000 Ch 4 p. 108 (BE = TFC divided by (price-VC) 10,000/(15-5) = 1,000

True

In 2014-2016, companies are aggressively boosting their dividends paid to shareholders. Ch 4 p. 104

False

In analyzing big data, there is a shift from focusing largely on outliers to also focusing on aggregates. Ch 4 p. 113 (Capsule 4-2)

False

In most industries, only minor costs of producing a product or service are incurred within operations, so production and operations does not have great value as a competitive weapon in a company's overall strategy. Ch 4 p. 109

D) operations.

In most industries, the major costs of producing a product or service are incurred within A) marketing. B) management. C) research and development. D) operations. E) management information systems Ch 4 p. 109

True

In the area of marketing, a cost/benefit analysis is an appraisal of the costs, benefits, and risks associated with marketing decisions. Ch 4 p. 102 (bottom of page)

True

Increased efficiency, quality, productivity, and job satisfaction can come from cross-training workers. Ch 4 p. 110

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

Input

According to I/O theorists, which of the following contributes LEAST to firm's performance?

Internal resources

Why is market segmentation an important variable in the strategy-implementation process?

It directly affects marketing mix variables

Which of the following is a limitation associated with a SWOT matrix>

It is a static assesment time

Which of these is a limitation of QSPM?

It requires intuitive informed judgements

Who are the world's longest-living people?

Japanese

False

Leverage ratios measure a firm's ability to meet maturing short-term obligations. Ch 4 p. 106 (Table 4-4)

A) values.

Life-directing attitudes that serve as behavioral guidelines are called A) values. B) rites. C) beliefs. D) metaphors. E) legends. Ch 4 p. 94 (Table 4-1)

True

Linkages between a firm's culture and strategies often determine success. Ch 4 p. 95

Which strategy would be effective when the stockholders of a firm can minimize their losses by selling the organization's assets?

Liquidation

Which of the following is NOT one of the steps involved in constructing a SWOT Matrix?

List the firm's external weaknesses

which of the following is NOT one of the steps involved in constructing a SWOT matrix

List the firm's external weaknesses

What principle is based on the belief that the true measure of a really good strategist is the ability to solve problems?

Managing by crisis

Subdividing a market into distinct subsets of customers according to their needs and buying habits is known as

Market Segmentation

Which two variables rank as marketings most important contributions to strategic management?

Market Segmentation and product positioning

Gap's opening of its first five stores in China is an example of which type of strategy?

Market development

According to the Grand Strategy Matrix, which strategy is recommended for a firm with rapid market growth and a strong competitive position?

Market penetration

True

Marketing research is the systematic gathering, recording and analyzing, of data about problems relating to the marketing of goods and services. Ch 4 p. 102

Which stage in the strategy-formulation framework focuses on generating feasible alternative strategies

Matching

What is the most complex form of organizational structure?

Matrix

B) shorthand of words used to capture a vision or to reinforce old or new values.

Metaphors are A) several rites connected together. B) shorthand of words used to capture a vision or to reinforce old or new values. C) narratives based on true events. D) fictional stories. E) any objects, acts, events, qualities, or relations used to convey meaning. Ch 4 p. 94 (Table 4-1)

False

Metaphors are handed-down narratives of some wonderful event that are based on history but which have been embellished with fictional detail. Ch 4 p. 94 (Table 4-1)

According to Campbell and Yeung, what is/are most likely associated with behavior and the present?

Mission

False

Most producers today sell their goods directly to consumers. Ch 4 p. 102

True

Motivation can explain why some people work hard and others do not. Ch 4 p. 98

What portion of the firms going public in 2014 were unprofitable?

Nearly three quarters

How many cells are in a SWOT matrix

Nine

Which of these is NOT a SPACE Matrix quadrant?

Offensive

False

Opportunities are a firm's distinctive competencies that cannot be easily matched or imitated by competitors Ch 4 p. 92 (Strengths... not Opportunities)

Which of the following is in keeping with the current view of organizational change?

Organizational change is a continuous process

A) employee training

Organizational resources include all of the following EXCEPT A) employee training. B) firm structure. C) planning processes. D) information systems. E) copyrights. Ch 4 p. 93

False

Organizing is the cornerstone of effective strategy formulation. Ch 4 p. 96

Which variable would be considered part of the "product" element of the marketing mix?

Packaging

In preparing projected statements, to project cost of goods sold in the income statement, which of these methods is recommended?

Percentage-of-Sales Method

Which of the following is NOT a management issue central to strategy implementation

Performing an internal audit

Which of the following is not a management issue central to strategy implementation

Performing an internal audit

Which component of a mission statement addresses the basic beliefs, values, aspirations, and ethical priorities of the firm?

Philosophy

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

Political

Which method of determining a firm's net worth divides the market price of the firm's stock by the annual earnings per share, and multiplies this number by the firm's average net income for the past five years?

Price-Earnings Ratio Method

A) marketing.

Pricing is one of the basic functions of A) marketing. B) finance/accounting. C) management information systems. D) production/operations. E) research and development. Ch 4 p. 100

Which of the following variables is NOT directly affected by market segmentation?

Process

Which of the following variables is not directly affected by market segmentation?

Process

What is a central strategy-implementation technique that allows an organization to examine the expected results of various strategy implementation decisions?

Projected financial statement analysis

False

Proponents of the resource-based view argue that external factors are more important than internal factors for a firm in achieving and sustaining competitive advantage. Ch 4 p. 93

Which best expresses former Colgate CEO Reuben Mark's thoughts on vision?

Pushing one vision globally is essential.

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

Quantitative Strategic Planning Matrix

Which analytical tool determines the relative attractiveness of various strategies based on the extent to which key external and internal critical success factors are capitalized upon or improved?

Quantitative Strategic Planning Matrix (QSPM)

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

Quantitative Strategic Planning Matrix (QSPM)

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

Quantitative Strategic Planning Matrix (QSPM)

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

Reengineering

Which strategy is effective when new, but unrelated, products could be offered at highly competitive prices?

Related diversification

False

Research and Development (R&D) Management is focused on managing inputs, transformations, and outputs that vary across industries and markets. Ch 4 p. 111

Which term is primarily concerned with shareholder well-being rather than employee well-being?

Restructuring

According to Porter, what is usually the most powerful of the five competitive forces?

Rivalry among competing firms

In recent times, ________ perhaps has instituted the most protectionist measures by raising tariffs on most imports and subsidizing its own exports.

Russia

All of the following are mentioned as places where vision and mission statements can often be found EXCEPT

SEC reports.

Which board of director's duty falls under the category of control and oversight over management?

Select the CEO

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

Self-concept

C) customer analysis

Selling includes all of these marketing activities EXCEPT A) advertising. B) dealer relations. C) customer analysis. D) publicity. E) sales promotion Ch 4 p. 100

C) analyzing customers.

Staffing involves all of these activities EXCEPT A) recruiting employees. B) rewarding employees. C) analyzing customers. D) managing union relations. E) training and developing employees. Ch 4 p. 98

Which stage of the strategy-formulation framework involves the quantitative strategic planning matrix

Stage 3

Forward integration would be an appropriate strategy for which of the following types of divisions in the Boston Consulting Group (BCG) Matrix

Star

In 2017, which governmental entity will impose penalties up to $450 on any employee who fails to undergo certain health screenings or treatment plans?

State of Maryland

Which of the following is NOT one of the nine recommended components of a mission statement?

Strategies

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

Strategy

Strategy analysis and choice largely involves making ___ decisions based on ____ information

Subjective;obkective

False

Successful strategy formulation generally rests upon the ability of an organization to sell some product or service. Ch 4

Matching which factors would allow factories to produce desirable levels without extra shifts, overtime, or subcontracting?

Supply and demand

E) all of the above

Synergy A) is the 2 + 2 = 5 effect. B) can result in powerful competitive advantages. C) can be developed by an organization through planning. D) exists when everyone pulls together as a team that knows what it wants to achieve. E) all of the above Ch 4 p. 97

12) Political issues and stances impact strategic decisions.

13) Protectionism is used by various countries around the world to safeguard their domestic industries.

15) A characteristic that describes the most competitive companies is adopting the adage, "Whether it's broke or not, fix it"; in other words, continually strive to improve everything about the firm.

16) Wisconsin recently passed a law eliminating most collective-bargaining rights for the state's public-employee unions.

19) Laser eye surgery would be considered a substitute product for eyeglasses and contact lenses.

2) External audits attempt to identify key variables that offer actionable responses.

21) Major competitors' strengths may represent key threats.

22) Hiring top executives from rival firms is a way companies obtain competitive intelligence.

26) Wild guesses should never be made in formulating strategies.

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

7) The United States is getting older and less white.

9) U.S. households are making more and more purchases online.

A projected financial analysis can be used to forecast the impact of various implementation decisions.

An EPS/EBIT chart can be constructed to determine the break-even point, where one financing alternative becomes more attractive than another.

An area on a perceptual map where there is a cluster of ideal points indicates a market segment.

An example of a marketing decision is whether or not to limit the share of business done with a single customer.

An organization's present strategies, objectives, vision, and mission, coupled with the external and internal audit information, provide a basis for generating and evaluating feasible alternative strategies.

Both the Internal-External (IE) and Boston Consulting Group (BCG) Matrices are called portfolio matrices.

Conservative strategies in a SPACE Matrix most often include product development, market development, market penetration, and related diversification.

Culture includes the set of shared values, beliefs, attitudes, customs, norms, rites, rituals, personalities, heroes, and heroines that describe a firm.

Decisions about an initial public offering are better described as being finance and accounting matters than as marketing matters.

In general, the Internet makes market segmentation easier.

It is generally not recommended for companies with less than $10 million in sales to go public.

Market penetration can be classified as either a conservative, aggressive, or competitive strategy when using the Strategic Position and Action Evaluation (SPACE) Matrix.

One major R&D approach is to be an innovative imitator of successful products.

Perceptual mapping entails developing schematic representations that reflect how your products or services compare to competitors' on dimensions most important to success in the industry.

R&D issues include emphasis on product or process improvements.

ROne of the steps of the SWOT Matrix is to list the firm's key external opportunities.

RThe most important determinants of an organization's overall strategic position are considered to be the two internal dimensions, financial position (FP) and competitive position (CP), and the two external dimensions, industry position (IP) and stability position (SP).

Relative market share position is given on the x-axis of the Boston Consulting Group (BCG) Matrix.

Segmentation often reveals that large, random fluctuations in demand actually consist of several small, predictable, and manageable patterns.

Stars, Question Marks, Cash Cows, and Dogs are the four quadrants exhibited by the Boston Consulting Group (BCG) Matrix.

Strengths-opportunities strategies are based on using a firm's internal strengths to take advantage of external opportunities.

The BCG Matrix does not reflect whether or not various divisions or their industries are growing over time.

The Sarbanes-Oxley Act put an end to the "country-club" atmosphere of most boards and has shifted power from CEOs to directors.

The Strengths-Weaknesses-Opportunities-Threats (SWOT) Matrix, the Strategic Position and Action Evaluation (SPACE) Matrix, the Boston Consulting Group (BCG) Matrix, the Internal-External (IE) Matrix, and the Grand Strategy Matrix are included in stage two of the strategy-formulation framework.

The cash account is used as the plug figure in projected balance sheets.

The major benefit of the Boston Consulting Group (BCG) Matrix is that it draws attention to the cash flow, investment characteristics, and needs of an organization's various divisions.

The most common bases for segmenting markets are geographic and demographic.

The percentage-of-sales method should be used for projecting the cost of goods sold in the income statements.

The pie slice in a BCG Matrix corresponds to the proportion of corporate revenue generated by that business unit.

To objectively evaluate feasible alternative strategies identified in Stage 2, the Quantitative Strategic Planning Matrix (QSPM) uses input information derived from Stage 1.

When a firm located in Quadrant I of the Grand Strategy Matrix is too heavily committed to a single product, related diversification may be appropriate to reduce the risks associated with a narrow product line.

Whenever two firms merge, it becomes especially important to evaluate and consider culture-strategy linkages.

Which section of the SWOT matrix involves matching internal strengths with external opportunities?

THE SO cell

A cost leadership strategy can be especially effective when the market is composed on many price-sensitive buyers.

TRUE

A firm's annual objectives can be stated by business segment.

TRUE

A leveraged buyout occurs when a firm's management and other private investors use borrowed funds to buy out the firm's shareholders.

TRUE

A low-cost focus strategy offers products or services to a small range of customers at the lowest price available on the market.

TRUE

A recent study reports that nearly 90 percent of employers today offer some kind of wellness incentives or prizes to employees who "get healthier."

TRUE

An acquisition occurs when a large organization purchases a smaller one or vice versa.

TRUE

An appropriate strategy when an organization has excess production capacity is market development.

TRUE

Besides reducing worker alienation and stimulating productivity, ESOPs allow firms other benefits, such as substantial tax savings.

TRUE

Chapter 9 bankruptcy applies to municipalities.

TRUE

Exchanging members of conflicting parties so each can gain an appreciation of the other's point of view exemplifies a confrontation approach.

TRUE

Gaining ownership or increased control over distributors or retailers is called forward integration strategy.

TRUE

In order to exploit common use of a well-known brand name, most companies favor related diversification strategies.

TRUE

Joint ventures tend to fail when managers who must collaborate daily in operating the venture are not involved in forming or shaping the venture.

TRUE

Limited availability of quality distributors is a reason why competitive advantage could result from forward integration.

TRUE

Long-term objectives represent the results expected from pursuing certain strategies.

TRUE

Market penetration, marketing development, and product development are intensive strategies.

TRUE

Most large companies have abandoned the functional structure in favor of decentralization.

TRUE

Product development is an appropriate strategy when an organization has successful products that are in the maturity stage of the product life cycle.

TRUE

Recruitment, promotion, and mentoring are ways to alter an organization's culture.

TRUE

Reengineering does not usually affect the organizational structure or chart, nor does it imply job loss or employee layoffs.

TRUE

Resistance to change can be considered the single greatest threat to successful strategy implementation.

TRUE

The most complex of all organizational structures is a matrix structure.

TRUE

The most effective differentiation bases are those that are hard or expensive for rivals to duplicate.

TRUE

The rational change strategy is one that presents information to convince people of the need for change.

TRUE

Unlike strategy formulation, strategy implementation varies considerably among different types and sizes of organizations.

TRUE

When developing an organizational chart, it is not wise to recommend that any executive have a dual title.

TRUE

When the rational type change strategy is successful, strategy implementation can be relatively easy.

TRUE

With a divisional structure by customer, an organization can effectively cater to the requirements of clearly defined customer groups.

TRUE

False

Technology ties all business functions together and provides the basis for all managerial decisions. Ch 4 p. 112 (It's Information ties all business...)

False

Test marketing is used more frequently by industrial companies than consumer goods companies. Ch 4 p. 101

A) constructed for each autonomous division

The IFE Matrix should be ________ in multidivisional firms. A) constructed for each autonomous division B) all-inclusive C) constructed only for the major divisions D) developed before the EFE Matrix E) revised monthly Ch 4 p. 188

False

The Internal Factor Evaluation (IFE) Matrix should be developed on a multiple business unit basis in multidivisional firms. Ch 4 p. 118

True

The Internal Factor Evaluation (IFE) Matrix should use a total of 20 internal factors. Ch 4 p. 116

Which of the following is NOT an accepted approach for determining a business's worth?

The Return on Investment Method

A) pricing.

The Robinson-Patman Act affects a company's A) pricing. B) product/service planning. C) customer analysis. D) marketing research. E) distribution. Ch 4 p. 101

Which section of the SWOT Matrix involves matching internal strengths with external opportunities?

The SO cell

In recent times, which of the following has largely refrained from protectionist measures?

The United States

A) investment

The ________ decision is the allocation and reallocation of capital and resources to projects, products, assets, and divisions of an organization. A) investment B) dividend C) financing D) restructuring E) benchmark Ch 4 p. 104

True

The basic premise of the research-based view is that the mix, type, amount, and nature of a firm's internal resources should be considered first and foremost in devising strategies that can lead to sustainable competitive advantage. Ch 4 p. 93

True

The controlling function of management is especially important for effective strategy evaluation. Ch 4 p. 99

False

The controlling function of management is synonymous with strategy formulation Ch 4 p. 99

True

The heart of an information system is a database containing the kinds of records and data important to managers. Ch 4 p. 112

True

The idea that paying dividends results in a higher stock price is a myth. Ch 4 p. 104 (listed in #4 on why dividends are paid out)

E) dividing a firm's operations into specific activities or business processes.

The initial step to implementing value chain analysis is A) attaching a cost to each discrete activity. B) establishing costs in terms of time. C) establishing costs in terms of money. D) converting the cost data into information by looking for competitive cost strengths and weaknesses. E) dividing a firm's operations into specific activities or business processes. Ch 4 p. 114

False

The management function of organizing is included in human resource management. Ch 4 p. 98

True

The only certain thing about the future of any organization is change. Ch 4 p. 96

True

The process of performing an internal audit, compared to the external audit, provides more opportunity for participants to understand how their jobs, departments and divisions fit into the whole organization. Ch 4 p. 92

B) Value Chain Analysis.

The process whereby a firm determines the costs associated with organizational activities from purchasing raw materials to manufacturing products to marketing those products is called A) The Resource-Based Approach. B) Value Chain Analysis. C) Strategic Cost Analysis. D) The Internal Factor Evaluation Matrix. E) Cost-Benefit Analysis Ch 4 p. 113

True

The purpose of organizing is to achieve coordinated effort by defining task and authority relationships. Ch 4 p. 97

False

The quantity or number of units of product that a firm must sell to break even is total fixed costs divided by (price per unit + variable costs per unit). Ch 4 p. 108

True

The subtle, elusive and largely unconscious forces that shape the workplace are captured by the organizational culture. Ch 4 p. 94

C) organizational resources.

The three all-encompassing internal resource categories used in the resource-based view are physical resources, human resources, and A) financial resources. B) shareholder resources. C) organizational resources. D) non-renewable resources. E) technological resources Ch 4 p. 93

B) leverage ratio.

The times-interest-earned ratio would be classified as a(n) A) activity ratio. B) leverage ratio. C) profitability ratio. D) liquidity ratio. E) growth ratio. Ch 4 p. 106 (Table 4-4)

False

The total assets turnover ratio is calculated by dividing sales by fixed assets Ch 4 p. 106 (Table 4-4)

The current attitude of U.S. firms toward research and development is best described by which of the following?

The veil of secrecy is being lifted, resulting in more collaboration

Which statement is TRUE?

The vision statement should be established before the mission statement.

True

There are seven basic functions of marketing: customer analysis, selling products and services, product and service planning, pricing, distribution, marketing research, and opportunity analysis. Ch 4 p. 100

What is the highest number of strategies that can be examined at one time wit the QSPM?

There is no limit

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

They are more expensive.

Which one of the following statements regarding stock issuances is true?

They are not always better than debt for raising capital

Which of the following is not true about objectives?

They should use terms like "maximize", "minimize", and "as soon as possible"

Which of the following is not given as an example of a decision that may require finance/accounting policies?

To be a price leader or a price follower

All of the following are strategic marketing issues or decisions except?

To use operating leverage

A firm's annual objectives can be stated by business segment

True

A reason for concern about the dilution of ownership is the possibility of hostile takeover.

True

Alternative strategies dont come out of the blue; they are derived from the firm's vision, mission, objectives, external audit, and internal audit

True

An example of a marketing decision is whether or not to limit the share of business done with a single customer

True

An organizations present strategies, objectives, vision, and mission, coupled with the external and internal audit information, provide a basis for generating and evaluating feasible alternative strategies

True

Annual objectives are key components in the strategic-management process because they dictate how resources will be allocated

True

Good intuitive judgment is always needed to determine appropriate weights and ratings in the input stage matrices

True

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

True

In low earning periods, too much debt in the capital structure of an organization can endanger stockholders' returns and jeopardize company survival.

True

It is always easier to say you are going to do something than to actually do it

True

One of the steps of the SWOT matrix is to list the firm's key external opportunities

True

Packaging is considered part of the "product" element of the marketing mix.

True

R&D issues include emphasis on product or process improvements.

True

Reengineering does not usually affect the organizational structure or chart, nor does it imply job loss or employee layoffs.

True

Seemingly minor ethical and questionable actions can catapult these days into huge public relations problems for companies as a result of the monumental online social and business communications

True

Strategy analysis and choice largely involves making subjective decisions based on objective information

True

Strengths-opportunities strategies are based on using a firm's internal strengths to take advantage of external opportunities

True

Structure dictates how resources will be allocated.

True

The SWOT matrix, the strategic position and action evaluation matrix, the boston consulting group matrix, the Internal External Matrix, and the Grand strategy matrix are included in stage two

True

The most common bases for segmenting markets are geographic and product.

True

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

True

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.

True

The process of strategic management is facilitated immensely in firms that have an effective information system.

True

The purpose of matching key factors is to generate feasible alternative strategies

True

To objectively evaluate feasible alternative strategies identified in stage 1, the Quantitative Strategic PLanning Matrix uses input information derived from Stage 2

True

Undesirable conduct such as distorting the records can be a result of overemphasis on achieving objectives

True

Unlike strategy formulation, strategy implementation varies considerably among different types and sizes of organizations

True

Value chain analysis can enable a firm to better identify its own strengths and weaknesses especially as compared to competitors' value chain analyses and their own data over time. Ch 4 p. 113 (bottom of page)

Which type of statement should be created first and foremost?

Vision

Which strategies aim at improving internal weaknesses by taking advantage of external opportunities?

Which strategies aim at imprving internal weaknesses by taking advantage of external opportunities

Which strateges are defensive tactics directed at reducing internal weaknesses and external threats

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

Which of the following illustrates the self-concept component of a mission statement?

We are committed to leapfrogging ongoing competition within 1,000 days by unleashing the constructive and creative abilities and energies of each of our employees.

What question is asked in conjunction with the philosophy component of a mission statement?

What are the basic beliefs, values, aspirations, and ethical priorities of the firm?

(1) customer analysis, (2) selling products and services, (3) product and service planning, (4) pricing, (5) distribution, (6) marketing research, and (7) cost/benefit analysis

What are the seven basic functions of marketing? Ch 4 p. 100

Which question is NOT addressed in an effective mission statement?

What are the updated balances of leading accounts on the firm's balance sheet?

C) Profitability

What category of ratios includes return on total assets and return on stockholders' equity? A) Leverage B) Activity C) Profitability D) Growth E) Liquidity Ch 4 p. 106 (Table 4-4)

B) Liquidity

What category of ratios measures a firm's ability to meet its short-term obligations? A) Profitability B) Liquidity C) Leverage D) Activity E) Growth Ch 4 p. 106 (Table 4-4)

E) Growth

What category of ratios measures how effectively a firm can maintain its economic position in the growth of the economy and industry? A) Profitability B) Liquidity C) Leverage D) Revenue Growth E) Growth Ch 4 p. 106 (Table 4-4)

Which basic question should the vision statement answer?

What do we want to become?

Which of these basic questions should a vision statement answer?

What do we want to become?

According to Drucker, which question is synonymous with asking "What is our mission?"?

What is our business?

B) Planning

What is the essential bridge between the present and the future that increases the likelihood of achieving desired results? A) Motivating B) Planning C) Controlling D) Staffing E) Organizing Ch 4 p. 96

B) Saga

What is the term for a historical narrative describing the unique accomplishments of a group and its leaders? A) Rite B) Saga C) Story D) Myth E) Folktale Ch 4 p. 94 (Table 4-1)

D) Product and service planning

What marketing function includes test marketing? A) Selling products and services B) Pricing C) Customer analysis D) Product and service planning E) Distribution Ch 4 p. 101

According to Drucker, what is the best time to ask "What do we want to become?" and "What is our business?"?

When the firm is successful

E) Controlling

Which function of management includes all of those activities undertaken to ensure actual operations conform to planned operations? A) Planning B) Organizing C) Motivating D) Staffing E) Controlling Ch 4 p. 99

B) Organizing

Which function of management includes areas such as job design, job specifications, job analysis, and unity of command? A) Planning B) Organizing C) Motivating D) Staffing E) Controlling Ch 4 p. 96 (Table 4-3)

B) Organizing

Which function of management is concerned with span of control and chain of command? A) Planning B) Organizing C) Controlling D) Staffing E) Motivating Ch 4 p. 97

C) Use a percentage-of-costs method.

Which is NOT one of the four common approaches to determine R&D budget allocations? A) Finance as many project proposals as possible. B) Budget for R&D about what competitors spend. C) Use a percentage-of-costs method. D) Decide how many successful new products are needed and work backwards to estimate the required R&D investment. E) Use a percentage-of-sales method. Ch 4 p. 111

C) Organizing

Which management function includes breaking tasks into jobs, combining jobs to form departments, and delegating authority? A) Motivating B) Staffing C) Organizing D) Controlling E) Planning Ch 4 p. 97

B) Emotions

Which of the following are NOT mentioned as an example of cultural products? A) Rites B) Emotions C) Rituals D) Sagas E) Symbols Ch 4 p. 94

A) Planning

Which of the following does the text call an up-front investment in success? A) Planning B) Organizing C) Motivating D) Staffing E) Controlling Ch 4 p. 97 (top of page)

E) Does the firm have good liquidity?

Which of the following is NOT a key question that can reveal internal strengths and weaknesses regarding a firm's marketing function? A) Does the firm have an effective sales organization? B) Has the firm's market share been increasing? C) Are markets segmented effectively? D) Are the firm's products and services priced appropriately? E) Does the firm have good liquidity? Ch 4 p. 103 (Checklist of questions)

C) Listing key internal strengths and weaknesses

Which of the following is the first step in developing an IFE Matrix? A) Determining the organization's structure B) Summing the weighted scores for each variable C) Listing key internal strengths and weaknesses D) Identifying the organization's functions of business E) Assigning a weight to each factor Ch 4 p. 116 and Table 4-8

B) Motivating

Which of the following is the process of influencing people to accomplish specific objectives? A) Staffing B) Motivating C) Planning D) Controlling E) Organizing Ch 4 p. 98

C) Financing

Which of the three finance and accounting decisions involves determining the best capital structure for the firm? A) Investment B) Dividend C) Financing D) Capital budgeting E) Implementation Ch 4 p. 104

E) Times-interest-earned ratio

Which ratio is calculated by dividing profits before interest and taxes by total interest charges? A) Inventory turnover B) Fixed assets turnover C) Total assets turnover D) Debt-to-equity ratio E) Times-interest-earned ratio Ch 4 p. 106 (Table 4-4)

C) Average collection period

Which ratio would be considered an activity ratio? A) Debt-to-equity B) Net profit margin C) Average collection period D) Earnings per share E) Current ratio Ch 4 p. 106 (Table 4-4)

False

While interesting, organizational culture does not significantly affect business decisions. Ch 4 p. 95

C) Representative managers and employees from throughout the firm

Who should perform an internal audit? A) A private auditing firm B) The organization's accounting department C) Representative managers and employees from throughout the firm D) A small team of top-level managers E) The chief executive officer Ch 4 p. 92

A) Customer profiling

________ can reveal the demographic characteristics of an organization's customers. A) Customer profiling B) Test marketing C) Market development D) The vision statement E) Telemarketing Ch 4 p. 100

C) Financial ratio analysis

________ exemplifies the complexity of relationships among the functional areas of business. A) Government auditing B) External auditing C) Financial ratio analysis D) Environmental scanning E) Distribution strategy Ch 4 p. 92

E) All of the above

________ is a commonly used approach to determine R&D budget allocations. A) Financing as many project proposals as possible B) Using a percentage-of-sales method C) Budgeting for R&D about what competitors spend D) Deciding how many successful new products are needed and working backward to estimate the required R&D investment E) All of the above Ch 4 p. 111 (first sentence under "Internal and External Research and Development")

D) Production and operations

________ management deals with inputs, transformations, and outputs that vary across industries and markets. A) Marketing B) Financial C) Research and development D) Production and operations E) Information systems Ch 4 p. 109

C) Information

________ ties all business functions together and provides the basis for all managerial decisions. A) Management B) Marketing C) Information D) Technology E) Workforce Ch 4 p. 112 (first sentence under "Management Info Systems")

A good mission statement has

a customer orientation.

The potential for creative growth in an organization can be limited by

a mission statement that is too specific.

In the context of a balance sheet, goodwill represents

a premium paid over the book value for an acquisition

When the private equity (PE) firm Clayton, Dubilier & Rice Bridal from the PE firm Leonard Green & Partner LP this is was an example of

a secondary buyout

The BCG Matrix is designed specifically to enhance which type of firm's efforts to formulate strategies? Question 7 options: A) Companies with more than one division B) Large companies C) Companies with annual sales greater than $1 million D) Companies with annual sales of less than $1 million E) All companies

a) companies with more than one division

For companies located in Quadrant III of the Grand Strategy Matrix, the first strategy recommended is Question 15 options: A) extensive cost and asset reduction. B) asset expansion. C) employee expansion. D) immediate liquidation of assets. E) divestiture.

a) extensive cost and asset reduction

There were far more global mergers and acquisitions in 2014 than in any year since a.) 2007 b.) 1999 c.) 1985 d.) 1967 e.) 1951

a.) 2007

Amazon's start of rapid delivery services in some U.S. cities is an example of which type of strategy? a.) forward integration b.) backward integration c.) horizontal integration d.) related diversification e.) unrelated diversification

a.) forward integration

What principle is based on the belief that the true measure of a really good strategist is the ability to solve problems? a.) managing by crisis b.) managing by objectives c.) managing by extrapolation d.) managing by exception e.) managing by hope

a.) managing by crisis

Which strategy seeks to increase market share for present products or services in present markets through greater marketing efforts? a.) market penetration b.) forward integration c.) market development d.) backward integration e.) product development

a.) market penetration

External audits attempt to identify key variables that offer ________ responses.

actionable

Effective mission statements can vary in

all of the above (content, length, format, specificity)

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

all of these

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

an annual financial plan.

The amount by which retained earnings changes is obtained by subtracting

any dividends to be paid for that year from net income.

Wellness programs

are becoming more prevalent as companies realize the benefits to the firm

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

as many managers as possible.

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

at least three directors are current or former company executives

What occurs when two or more companies form a temporary partnership or consortium for the purpose of capitalizing on some opportunity? a.) retrenchment b.) a joint venture c.) liquidation d.) forward integration e.) divestiture

b) a joint venture

Which strategy should be implemented when a division is responsible for an organization's overall poor performance? a.) backward integration b.) divestiture c.) forward integration d.) cost leadership e.) related diversification

b.) divestiture

When two organizations of about equal size unite to form one enterprise, which of these occurs? a.) hostile takeover b.) merger c.) acquisition d.) leveraged buyout e.) friendly takeover

b.) merger

When companies are hired by other companies to take over functional operations such as human resources, information systems, payroll, accounting, or customer service, this is called a.) marketing b.) outsourcing c.) licensing d.) franchising e.) divestiture

b.) outsourcing

Which strategy generally entails large research and development expenditures? a.) retrenchment b.) product development c.) backward integration d.) liquidation e.) market penetration

b.) product development

Which strategy is appropriate when an organization competes in an industry characterized by rapid technological developments? a.) retrenchment b.) product development c.) backward integration d.) liquidation e.) market penetration

b.) product development

Which strategy is effective when new, but related, products could be offered at highly competitive prices? a.) forward integration b.)related diversification c.) related integration d.) conglomerate diversification e.) unrelated diversification

b.) related diversification

All of the following are limitations of the BCG Matrix EXCEPT Question 3 options: A) viewing every business as a star, cash cow, dog or question mark can be an oversimplification. B) the Matrix requires at least three years worth of data. C) the Matrix does not reflect divisional or industry growth over time. D) the Matrix does not allow a company to be classified as somewhere in between two categories. E) variables such as size of market and competitive advantages are not considered in the Matrix. Save

b.) the matrix requires at least three years worth of data

Under which condition would would a differentiation strategy be especially effective? a.) when there are few ways to differentiate the product or service that buyers perceive as having value b.) when technological change is fast paced and competition revolves around rapidly evolving product features c.) when most buyers use the product in the same way d.) when many rival firms are following a similar differentiation approach e.) when the differentiation base is easy or inexpensive for rivals to duplicate

b.) when technological change is fast paced and competition revolves around rapidly evolving product features

Which strategy-formulation technique reveals the relative attractiveness of alternative strategies and thus provides an objective basis for selecting specific strategies? Question 20 options: A) SWOT B) SPACE C) QSPM D) IFE E) CPM

c) QSPM

Which stage of the strategy-formulation framework involves the Quantitative Strategic Planning Matrix? Question 6 options: A) Stage 1 B) Stage 2 C) Stage 3 D) Stage 4

c) stage 3

Bankruptcy: a.) should never be used as a strategy b.) should be used only when one is legally forced to do so c.) can be an effective type of retrenchment strategy d.) should only be used for large firms e.) should only be used for small, private firms

c.) can be an effective type of retrenchment strategy

According to Porter, which strategy offers products or services to a niche group of customers at the lowest price available on the market? a.) cost leadership -- low cost b.) cost leadership -- best value c.) focus -- low cost d.) focus -- best value e.) differentiation

c.) focus -- low cost

Websites that sell products directly to consumers are examples of which type of strategy? a.) backward integration b.) product development c.) forward integration d.) horizontal integration e.) conglomerate diversification

c.) forward integration

Retrenchment would be an effective strategy when an organization a.) has shrunk so quickly that major internal reorganization is needed b.) is one of the stronger competitors in a given industry c.) is plagued by inefficiency, low profitability, poor employee morale and pressure from stockholders to improve performance d.) has decided to capitalize on opportunities, maximize threats, take advantage of strengths and overcome weaknesses e.) does not have a clearly distinctive competence and has failed to meet its objectives and goals consistently over time

c.) is plagued by inefficiency, low profitability, poor employee morale and pressure from stockholders to improve performance

All stakeholders' claims on an organization ________ pursued with equal emphasis.

cannot be

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

competitive intelligence.

The Family Farmer Bankruptcy Act of 1986 created which of the major types of bankruptcy? a.) Chapter 7 b.) Chapter 8 c.) Chapter 9 d.) Chapter 12 e.) Chapter 13

d.) Chapter 12

Which of the following is noted in the text as a serious obstacle for many small business owners? a.) a lack of business ethics b.) an excess of employees and managerial staff c.) a lack of experience in networking d.) a lack of strategic-management knowledge e.) having too many suppliers

d.) a lack of strategic-management knowledge

Long-term objectives are needed at which level(s) in an organization? a.) corporate b.) divisional c.) functional d.) all of the above e.) corporate & divisional levels, but not functional levels

d.) all of the above

Which of these strategies is effective when the number of suppliers is small and the number of competitors is large? a.) conglomerate diversification b.) forward integration c.) concentric diversification d.) backward integration e.) horizontal diversification

d.) backward integration

The controversial practice of a company borrowing money simply to find dividend payouts to itself is known as a.) a leveraged buyout b.) retrenchment c.) first mover advantage d.) dividend capitalization e.) dividend divestiture

d.) dividend capitalization

What refers to a strategy of seeking ownership of, or increased control over a firm's competitors? a.) forward integration b.) conglomerate diversification c.) backward integration d.) horizontal integration e.) concentric diversification

d.) horizontal integration

Staples 170 store closings in North America in 2014 is an example of a.) divestiture b.) backward integration c.) liquidation d.) retrenchment e.) forward integration

d.) retrenchment

Which of the following is NOT a reason joint ventures fail? a.) managers who must collaborate daily in operating the venture are not involved in forming or shaping the venture b.) the venture may not be supported equally by both partners c.) the venture by benefit the partnering companies but may not benefit the customers who then complain about poorer service or criticize the companies in other ways d.) venture risk was minimized e.) the venture my begin to compete more with one of the partners than the other

d.) venture risk was minimized

Just-in-time describes

delivering materials just as they are needed

An area on a perceptual map without ideal points indicates a

demand void

An overly general mission statement that ________ could be dysfunctional.

does not exclude any strategy alternatives

Which strategy would be effective when the stockholders of a firm can minimize their losses by selling the organization's assets? a.) integration b.) differentiation c.) diversification d.) cost leadership e.) liquidation

e.) liquidation

Which of the following is NOT a guideline for when an organization should use an unrelated diversification strategy? a.) when revenues derived from an organization's current products or services would increase significantly by adding the new, unrelated products b.) when an organization's present channels of distribution can be used to market the new products to current customers c.) when the new products have counter cyclical sales patterns compared to an organization's present products d.) when an organization competes in a highly competitive and/or a no-growth industry e.) when existing markets for an organization's present products are not yet saturated

e.) when existing markets for an organization's present products are not yet saturated

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

employee wage rates.

A conservative rule of thumb is to establish a business' worth as _____ the firm's current annual profit.

five times

To perform an external audit, a company first must

gather competitive intelligence and information about external trends.

The United States' population is

getting older and less white.

The Financial Accounting Standard Board (FASB) Rule 142 deals with

goodwill

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

governance

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

harder

All stakeholders

have claims and concerns about an organization, but these claims and concerns vary.

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

higher

A weak dollar means

higher exports and lower imports.

Without assumptions, planning would be

impossible.

All of the following are true EXCEPT

in 2015 the number of LinkedIn users was closer to the number of Facebook users than to the number of Twitter users.

An effective mission statement should do all of the following EXCEPT

include monetary amounts, numbers, percentages and ratios.

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

increase.

Competition in virtually all industries is

intense.

Each of the nine techniques included in the strategy formulation framework rely on the use of

intuition and analysis

Intensity of competition ________ in lower-return industries.

is highest

In developing a mission statement, arousing emotion

is important.

Changing a strategy to fit an existing culture

is usually less effective than changing a firm's culture to fit a new strategy

Projected financial analysis is an important strategy-implementation technique because

it allows an organization to examine the expected results of strategies being implemented

An effective mission statement does all of the following EXCEPT

it is static in orientation.

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

it should be broad enough to include all ventures.

The recommended length of an effective mission statement is ________ words.

less than 150

Selling all of a company's assets, in parts, for their tangible worth is called

liquidation

When a domestic company first begins to export to India, it is an example of

market development

As indicated in the strategic-management model, a clear ________ is needed before alternative strategies can be formulated and implemented.

mission statement

The Industrial Organization (I/O) approach to competitive advantage advocates that external factors are ________ internal factors in a firm achieving competitive advantage.

more important than

How many cells are in a SWOT Matrix?

nine

Conflict in an organization is

not always bad

The ideal length of a vision statement is

one sentence.

A divisional structure by geographic area is most appropriate when

organizations have similar branch facilities located in widely dispersed areas.

A(n) ________ with expertise in developing vision and mission statements and with unbiased views, can at times manage the process more effectively than an internal group or committee of managers.

outside facilitator

When companies are hired by other companies to take over functional operations such as human resources, information systems, payroll, accounting, or customer service, this is called

outsourcing

Multidimensional scaling is used in

perceptual mapping

"All of our locations will be open at least two evenings per week until 8:30 pm" is an example of a(n)

policy

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

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

A change strategy that attempt to convince people that the change is to their personal advantage is

rational

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

reconciliatory.

After a draft mission statement has been developed, it is important to

request modifications, additions, and deletions.

Effective and carefully planned mission statements

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

Evaluating the worth of a firm

requires both qualitative and quantitative skills

Mergers and acquisitions are created for all of the following reasons EXCEPT to

shift company profits to the United Stated from countries with low corporate tax rates

The general public is especially interested in ________, whereas stockholders are more interested in ________.

social responsibility; profitability

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

stock price

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

strategy

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

the Northeast to the Sunbelt

Glass ceiling refers to

the invisible barrier in many firms that bars women and minorities from top-level management positions

All of the following are strategic marketing issues or decisions EXCEPT

to use operating leverage

A pasta manufacturer's purchase of some pet food brands is an example of

unrelated diversification

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

utility

Yum Brands owns

virtually all of its outside-U.S. restaurants.

Backward integration is effective in all of these cases EXCEPT

when the advantages of stable prices are not particularly important

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