Updated Capstone one

For strategic management to be effective in achieving organizational goals, - people throughout the organization must work in isolation. - top managers only take an integrative, strategic perspective. - leaders alone are responsible for the organizational outcome. - people throughout the organization must strive toward overall goals.

- people throughout the organization must strive toward overall goals.

The hierarchy of organizational goals is in the following order (least specific to most specific): - vision statements, strategic objectives, mission statements. - mission statements, strategic objectives, vision statements. - vision statements, mission statements, strategic objectives. - mission statements, vision statements, strategic objectives.

- vision statements, mission statements, strategic objectives.

All successful firms compete and outperform their rivals by developing bases for competitive advantage, which can be achieved only through cost leadership. True and False

False

All successful firms compete and outperform their rivals by developing bases for competitive advantage, which can be achieved only through cost leadership. True or False.

False

Although changes in the general environment may often adversely or favorably impact a firm, they seldom alter an entire industry. True or False.

False

Assessing the performance of a firm is less useful if it is evaluated in terms of how it changes over time. True or False.

False

Competitive intelligence generally does not benefit very much from gathering information on competitors from sources in the public domain. True or False.

False

Data privacy is not a source of competitive advantage for companies like Apple. True or False.

False

Even with all the advances in recent years, forecasting is typically considered more of an art than a science and it is of little use in generating accurate predictions. True or False.

False

Managers should focus their attention on interrelationships among value-chain activities within the firm, not on relationships among activities within the firm and other organizations (such as suppliers and customers). True or False.

False

Strategy analysis is the study of only the big picture external environments of the firm. True or False

False

The Internet and digital technologies suppress the bargaining power of buyers by providing them with more information to make buying decisions. True or False.

False

The Porter five-forces model is designed to help us understand how social attitudes and cultural values impact U.S. businesses. True or False.

False

The strategic management process should be addressed only by top-level executives. Mid-level and low-level employees are best equipped to implement the strategies of the organization. True and False.

False

Value-chain analysis can be applied to service organizations as well as manufacturing organizations. True or False

False

Apple's success under its former CEO, Steve Jobs, was largely attributed to the quality of its leader. According to the text, this would be an example of the "romantic" perspective of leadership. True or False

True

Environmental scanning and competitor intelligence provide important inputs for forecasting activities. True or False.

True

Information technology (IT) can also play a key role in enhancing the value that a company can provide its customers and, in turn, increasing its own revenues and profits. IT is an activity within the support activities of general administration. True or False.

True

Management innovations such as total quality, just-in-time, benchmarking, business process reengineering, and outsourcing are important but not enough for building sustainable competitive advantage. True or False.

True

Perceptual acuity, according to Ram Charan, is the ability to sense what will happen in the future. True or False

True

Primary activities contribute to the physical creation of a product or service, its sale and transfer to the buyer, and its service after the sale. True or False.

True

Products and services that are difficult to imitate help firms sustain their profitability. True or False.

True

SWOT analysis is useful in part because it obliges the firm to act proactively by putting an emphasis on identifying opportunities and threats that constrain the action choices a firm might make because of its internal and external environmental scan. True or False.

True

Strategic management consists of the analyses, decisions, and actions an organization undertakes in order to create and sustain competitive advantages. True or False

True

Sustainability is being increasingly recognized as a source of cost efficiencies and revenue growth. True or False.

True

Technological innovations can create entirely new industries and alter the boundaries of industries. True or False.

True

The resource-based view of the firm focuses in part on the internal analysis of the operations of the firm. True or False

True

The vision of an organization is at the top level of its hierarchy of organizational goals. The vision statement should be massively inspiring, overarching, and long term. True or False

True

The vision of an organization is at the top level of its hierarchy of organizational goals. The vision statement should be massively inspiring, overarching, and long term. True or False.

True

Value-chain analysis assumes that the basic economic purpose of a firm is to create value, and it is a useful framework for analyzing the strengths and weaknesses of the firm. True or False.

True

A primary benefit of the balanced scorecard is that it complements financial indicators with operational measures of customer satisfaction, internal processes, and the innovation and improvement activities of the organization. True or False.

True.

Why must successful managers recognize opportunities and threats in their company external environment? a. If they miscalculate the market, opportunities will be lost. b. If they misread the market, they are likely to become rich. c. If they identify all of the environmental threats, they are guaranteed to acquire large market share. d. If they identify all of the environmental opportunities, they are guaranteed to acquire large market share.

a. If they miscalculate the market, opportunities will be lost.

Digital technologies, when used to digitize existing businesses, can improve efficiency. Which of the following is an example of improved efficiency as a result of using digital technologies? a. artificial intelligence used to automate repetitive data entry tasks b. replacement of human heart with the heart of a pig c. elimination of digital apps and replacement with brick-and-mortar solutions d. replacement of 3D imaging with manual drawings

a. artificial intelligence used to automate repetitive data entry tasks

The four key attributes of strategic management include the idea that strategy must a. be directed toward overall organizational goals and objectives. b. be focused only on long-term objectives. c. be focused on only one specific area of an organization. d. focus only on competitor strengths.

a. be directed toward overall organizational goals and objectives.

SWOT analysis is a framework for analyzing the internal and external environment of a company. It consists of strengths, weaknesses, opportunities, and threats. According to a SWOT analysis, which of the following is not an aspect that the strategy of the firm must follow? a. build on its weaknesses b. remedy the weaknesses or work around them c. take advantage of the opportunities presented by the environment d. protect the firm from the threats

a. build on its weaknesses

According to Michael Porter in his book, Competitive Advantage, a key concept used in analyzing the competitive position of a firm is creating value for ________ that exceeds the costs of production (i.e., margin). a. buyers b. suppliers c. government d. employees

a. buyers

A marketing department that promises delivery faster that the ability of the production department to produce is an example of a lack of understanding of the a. interrelationships among value-creating activities within a firm. b. organizational culture and leadership. c. need to maintain the reputation of the company. d. synergy of the business units.

a. interrelationships among value-creating activities within a firm.

The innovation paradox implies that consistency in products and services provokes a tension with the need for new products. This results in a conflict between a. stability and change. b. structure and culture. c. rewards and metrics. d. stability and metrics.

a. stability and change.

As an example of the ________ segment of the general environment, Data Analytics are being used by corporations to understand their customer purchasing patterns. a. technological b. economic c. demographic d. political and legal

a. technological

Coca-Cola has developed data analytic technologies to produce orange juice that meets the taste demands of a global customer base. This is an example of using the ________ value-chain support activity. a. technology development b. marketing and sales c. human resource management d. procurement

a. technology development

What is the overall purpose of a corporation? a. to maximize the long-term return to the shareholders b. to maximize the short-term return to the shareholders c. to maximize the long-term return to all the stakeholders d. to maximize the short-term return to all the stakeholders

a. to maximize the long-term return to the shareholders

Accounting is a sort of transformation process that converts daily records of individual transactions into monthly financial reports. The ________ are the inputs, accounting is the operation that adds value, and ________ are the outputs. a. transaction records; financial statements b. financial statements; transaction records c. employee records; transaction records d. health records; transaction statements

a. transaction records; financial statements

Data analytics is the analysis of large data sets to ________ hidden patterns, ________trends, ________ preferences. a. uncover; market; customer b. overlook; market; business c. overlook; business; customer d. discard; business; partner

a. uncover; market; customer

Which of the following is not an example of a financial strategic objective? a. Increase sales growth 6 percent to 8 percent and accelerate core net earnings growth from 13 percent to 15 percent per share in each of the next 5 years. (Procter & Gamble) b. Reduce volatile air emissions 15 percent by 2015 from 2010 base year, indexed to net sales. (3M) c. Generate Internet-related revenue of $1.5 billion. (AutoNation) d. Cut corporate overhead costs by $30 million per year. (Fortune Brands)

b. Reduce volatile air emissions 15 percent by 2015 from 2010 base year, indexed to net sales. (3M)

Which of the following firms would likely pose the least competitive threat? a. a firm in the same industry and in the same strategic group b. a competitor to your product where a high switching cost exists c. a firm that produces substitute goods to your product line d. a firm in the same industry and in the nearest strategic group looking to join your group

b. a competitor to your product where a high switching cost exists

According to the text, the strategic management process entails three ongoing processes. They are a. analyses, actions, and synthesis. b. analyses, decisions, and actions c. analyses, evaluation, and critique. d. analyses, synthesis, and decisions.

b. analyses, decisions, and actions

In assessing its primary activities, an airline would examine a. employee training programs. b. baggage handling. c. criteria for lease versus purchase decisions. d. the effectiveness of its lobbying activities.

b. baggage handling.

Strategy implementation can be the most difficult part of the strategic management process. Which of the following is not likely to be a cause of implementation failure? a. leadership b. competition c. coordination and integration of activities within and outside of the firm d. organizational commitment to excellence

b. competition

Which of the following methods is used by large data-gathering companies like Google and Apple to address privacy issues? a. development of tools that increase open access to third-party cookies b. creation of app prompts that give permission to track personal activity c. restriction of transparency commitment d. increasing open access to site-gathered data

b. creation of app prompts that give permission to track personal activity

Data might be one of the most valuable resources in the world today. Which of the following is a social movement that threatens the business models of companies that deal in data such as Google and Facebook? a. artificial intelligence-based search b. data privacy protection c. electronic pollution d. miniaturization of computing technologies

b. data privacy protection

In the resource-based view of the firm, examples of tangible resources include: a. financial resources, human resources, and firm competencies. b. financial resources, physical resources, and technological resources. c. financial resources, physical resources, and the capacity to combine intangible resources. d. outstanding customer service, innovativeness of products, and reputation.

b. financial resources, physical resources, and technological resources.

Gathering competitive intelligence a. is illegal. b. is good business practice. c. is considered unethical. d. minimizes the need to obtain information in the public domain.

b. is good business practice.

Mercedes-Benz aggressively pushed for product placement in Hollywood movies. This is an example of a ________ value-chain activity, which is a ________ activity? a. general administration; support b. marketing and sales; primary c. procurement; support d. service; primary

b. marketing and sales; primary

Associated with collecting, storing, and distributing the product or service to buyers is ________. This consists of warehousing, material handling, delivery operation, order processing, and scheduling. a. services b. outbound logistics c. inbound logistics d. operations

b. outbound logistics

A wide variety of firm resources that are costly to imitate due to the social engineering that is required being beyond the capability of competitors include interpersonal relations among managers in the firm, its culture, and its reputation with its suppliers and customers. Such competitive advantages are based upon a. path dependency. b. social complexity. c. physical uniqueness. d. tangible resources.

b. social complexity.

Firms that were successful in the past can fail today because a. they keep pace with changes in the nature of competition. b. the company strategy is outdated. c. their financial situation is resilient. d. management monitors the relevant environmental factors regularly.

b. the company strategy is outdated.

End users are not a. the final consumers in a distribution channel. b. the first customers in a distribution channel. c. likely to have greater bargaining power because of the Internet. d. usually the C in B2C.

b. the first customers in a distribution channel.

________ are the competencies or skills that a firm employs to transform inputs into outputs. a. Tangible resources b. Reputational resources c. Organizational capabilities d. Intangible resources

c. Organizational capabilities

When the management frame of reference gets out of touch with the realities of the actual business situation, what can happen to the firm? a. Management perceptual acuity improves. b. Management gets across-the-board raises. c. The company business strategy no longer works. d. It becomes easier to maintain competitive advantage.

c. The company business strategy no longer works.

Perceptual acuity requires all the following except a. an ability to sense what is coming. b. the ability to detect early warning signals of environmental changes. c. a refusal to consult with others. d. a strong commitment to external environmental monitoring.

c. a refusal to consult with others.

Effective mission statements incorporate the concept of stakeholder management. This suggests that organizations must respond to multiple primary internal constituencies such as all the following except a. customers. b. suppliers. c. competitors. e. employees.

c. competitors.

Artificial Intelligence is behind the algorithms that power many short-form video-sharing apps. One of the most important, inherent problems with these apps is a. oversubscription. b. content variety. c. consumer addiction. d. payment terms.

c. consumer addiction.

Companies that are able to spot key trends in the environment know their business and most importantly know their a. suppliers. b. employees. c. customers. d. competitors.

c. customers.

In contrast to the vision of an organization, its mission should a. be shorter in length. b. encompass all the major rules and regulations of the corporate workforce. c. encompass both the purpose of the company as well as the basis of competition. d. be less detailed.

c. encompass both the purpose of the company as well as the basis of competition.

According to the text, the triple bottom line approach to corporate accounting includes which three components? a. financial, environmental, and customer b. financial, organizational, and customer c. financial, environmental, and social d. financial, organizational, and psychological

c. financial, environmental, and social

The effects of the digital economy include which of the following? a. intermediation of markets b. increased asset intensity of business operations c. increased collaboration and connectedness d. lowering of customer expectations

c. increased collaboration and connectedness

To be considered strategic resources that contribute competitive advantage, they must have several characteristics. Which of the following is not one of these? a. rare b. valuable c. inexpensive to imitate d. costly to substitute

c. inexpensive to imitate

The balanced scorecard provides top managers with a ________ view of the business. a. detailed and complex b. simple and routine c. fast but comprehensive d. long-term financial

c. last but comprehensive

Interest rate increases have a ________ impact on the residential home construction industry and a ________ effect on industries that produce consumer necessities such as prescription drugs or basic grocery items. positive; negligible negative; positive c. negative; negligible d. positive; negative

c. negative; negligible

General administration is sometimes viewed as only ________, but it can be a powerful source of competitive advantage. a. income b. value c. overhead d. unimportant

c. overhead

Firms that were successful in the past can fail today because the company ________ is ________. a. competition; decreasing b. strategy; resilient c. strategy; outdated d. future; positive

c. strategy; outdated

SWOT analysis is a framework for analyzing the internal and external environment of a company. It consists of strengths, weaknesses, opportunities, and threats. According to a SWOT analysis, a company should ________ the ________ presented by the environment. a. build on; weaknesses b. isolate; competition c. take advantage of; opportunities d. strengthen weaknesses

c. take advantage of; opportunities

The resource-based view (RBV) of the firm combines the following two perspectives: a. the primary and support activities of the firm. b. the interrelationships among the primary activities of the firm and corporate management. c. the internal analysis of the firm and the external analysis of the industry and competitive environment. d. the industry and the competitive environment.

c. the internal analysis of the firm and the external analysis of the industry and competitive environment.

Successful organizations are effective in motivating people. Employees work best when a. they are asked to do their best. b. work requirements are vague and unclear. c. they are striving toward specific goals. d. they are guided by an abstract mission statement.

c. they are striving toward specific goals.

Scenario planning is a useful technique for firms competing in industries characterized by ________ and ________. a. predictability; stability b. low-profit margins; stability c. unpredictability; change d. high-profit margins; stability

c. unpredictability; change

Vision statements are used to create a better understanding of the overall purpose and direction of the organization. Vision statements a. are very specific. b. provide specific objectives. c. set organizational structure. d. are massively inspiring.

d. are massively inspiring.

Identifying the appropriate data and generating actionable analytics is a major change for management teams that use data and analytics to manage strategic uncertainties and opportunities. One of the most important tools used increasingly to assist managers with determining key performance indicators is a. spreadsheet analysis. b. human intelligence. c. focal groups. d. artificial intelligence.

d. artificial intelligence.

The three participants in corporate governance are the shareholders, a. board of directors, and employees. b. labor unions, and employees. c. board of directors, and management. d. banks and lending institutions, and management.

d. banks and lending institutions, and management.

According to the external control view of leadership, which of the following factors would not be considered an external factor that might positively or negatively affect a firm's success? a. economic downturns b. governmental legislation c. outbreak of war d. company employee morale

d. company employee morale

The best measure of company ability to meet imminent financial obligations is known as the a. debt ratio. b. profit margin. c. total asset turnover. d. current ratio.

d. current ratio.

Changes in the U.S. national debt can have a big impact on the ability of the country to compete in world markets. This is an example of which factor in the general environment? a. technological b. sociocultural c. demographic d. economic

d. economic

Strategic management involves the recognition of trade-offs between effectiveness and a. cost. b. value. c. return on investment. d. efficiency.

d. efficiency.

Responsible investment approaches evaluate companies based on ________, ________, and ________ criteria (ESG). a. environmental; social; growth b. external; social; growth c. environmental; strategic; growth d. environmental; social; governance

d. environmental; social; governance

Firms must be aware of goals other than short-term profit maximization. One area of concern should be social responsibility, which is the a. idea that businesses are responsible for maintaining a healthy social climate for their employees. b. idea that organizations are solely responsible to local citizens. c. fact that court costs could impact the financial bottom line. d. expectation that business will strive to improve the overall welfare of society.

d. expectation that business will strive to improve the overall welfare of society.

According to the text, the triple bottom line approach to corporate accounting includes which three components? a. financial, environmental, and customer b. financial, organizational, and customer c. financial, environmental, and social d. financial, organizational, and psychological

d. financial, organizational, and psychological

Financial ratio analysis involves identifying how a firm is performing according to all but which of the following? a. balance sheet b. income statement c. market valuation d. innovation

d. innovation

The threat of new entrants is high when there are a. high capital requirements. b. high differentiation among competitor products and services. c. high switching costs. d. low economies of scale.

d. low economies of scale.

Strategy analysis is the starting point of the strategic management process and consists of the a. analysis only of the vision, mission, and objectives of the firm. b. analysis of the relevant internal and external environmental factors only. c. analysis of relevant competitors only. d. matching of vision, mission, and objectives with the relevant internal and external environmental factors.

d. matching of vision, mission, and objectives with the relevant internal and external environmental factors.

The hierarchy of organizational goals is in the following order (least specific to most specific): a. vision statements, strategic objectives, mission statements. b. vision statements, mission statements, strategic objectives. c. mission statements, strategic objectives, vision statements. d. mission statements, vision statements, strategic objectives.

d. mission statements, vision statements, strategic objectives.

A bill passed by the U.S. Congress in October 2000 allowed 195,000 H-1B visas for each of the following three years—up from a cap of 115,000. However, beginning in 2006 and continuing through 2019, the annual cap on H-1B visas has shrunk to only 65,000—with an additional 20,000 visas available for foreigners with a masters or higher degree from a U.S. institution. This is an example of which segment of the general environment? a. economic b. demographic c. sociocultural d. political and legal

d. political and legal

Interest rate increases have a ________ impact on the residential home construction industry and a ________ effect on industries that produce consumer necessities such as prescription drugs or basic grocery items. a. positive; negligible b. negative; positive c. negative; negligible d. positive; negative

d. positive; negative

In the general environment, many relationships exist among the various elements. General environmental trends can have positive and negative impacts on various industries. For example, the aging population might have a ________ impact on the health care industry and a ________ impact on the baby product industry. These are called ________ impacts. a. negative; positive; demographic b. positive; negative; technological c. negative; positive; sociocultural d. positive; negative; demographic

d. positive; negative; demographic

JIT (just-in-time) inventory systems are designed to improve efficiency of company inbound logistics. Which of the following is not a benefit for the company as a result of JIT systems? a. arrival of inputs when needed for production b. reduced inventory management costs c. plant shutdown risk when the JIT works well d. production alignment with current market needs

d. production alignment with current market needs

In strategic management, both the short-term and long-term perspectives need to be considered because a. shareholder value is only measured by short-term returns. b. shareholders only care about long-term returns. c. Long-term vision precludes the analysis of present operating needs. d. The creative tension between the two forces managers to develop more successful strategy.

d. the creative tension between the two forces managers to develop more successful strategy.

Inbound logistics include which of the following? a. machining and packaging b. repair and parts supply c. promotion and packaging d. warehousing and inventory control

d. warehousing and inventory control

Because the Internet lowers barriers to entry in most industries, it a. decreases the threat of new entrants. b. increases supplier power. d. makes it easier to build customer loyalty. e. increases the threat of new entrants.

e. increases the threat of new entrants.