Capstone – Flashcard

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_______ is NOT a strategy-implementation activity.
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taking corrective actions
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In which phase of strategic management are long-term objectives especially important?
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formulation
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Which of the following is NOT a pitfall an organization should avoid in strategic planning?
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Involving all managers rather than delegating planning to a “planner”
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Which is generally considered to be the first step in strategic planning?
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Developing a vision statement
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All of these are pitfalls an organization should avoid in strategic planning EXCEPT
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using plans as a standard for measuring performance
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An important activity in ________ is taking corrective action
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strategy evaluation
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What are guides to decision making called?
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policies
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Which of the following is/are a benefit of strategic planning to a firm?
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All of the above: enhanced communication, deeper understanding, greater commitment, final results
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What can be defined as the art and science of formulating, implementing and evaluating cross-functional decisions that enable an organization to achieve its objectives?
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strategic management
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What are the pitfalls in strategic planning?
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All of the above (Using strategic planning to gain control over decisions and resources. Doing strategic planning only to satisfy accreditation or regulatory requirements. Too hastily moving from mission development to strategy formulation)
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Why do some firms not do strategic planning?
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Lack of knowledge in strategic planning and poor reward structures for planning.
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Which of the following is part of the strategic management model?
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All of the above (Measure and evaluate performance. Develop mission and vision statements. Establish long-term objectives. Implement strategies.)
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Which of the following is NOT a reason given for poor or no strategic planning in an organization?
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Trust of management makes it unnecessary
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What are the means by which long-term objectives will be achieved?
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strategies
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During what stage of strategic management are a firm’s specific internal strengths and weaknesses determined?
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formulation
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What step in the strategic development process involves mobilizing employees and managers to put strategies into action?
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strategy implementation
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Specific results an organization seeks to achieve in pursuing its basic mission are
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objectives
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Long-term objectives should be all of the following EXCEPT
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continually changing
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Effective and carefully planned mission statements
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stand the test of time
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An effective mission statement does all of the following EXCEPT
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it is static in orientation
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The recommended length of an effective mission statement is _____ words.
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less than 250
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Which basic question should the vision statement answer?
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what do we want to become?
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What question is asked in conjunction with the philosophy component of a mission statement?
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What are the basic beliefs, values, aspirations, and ethical priorities of the firm?
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Which component of a mission statement addresses the basic beliefs, values, aspirations, and ethical priorities of the firm?
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philosophy
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A mission statement should:
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all of these answers are correct: a declaration of an organization’s “reason for being.” answers the pivotal question “What is our business?” essential for effectively establishing objectives and formulating strategies
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Which question(s) are answered in an effective mission statement?
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All of the above (Is the firm committed to growth and financial soundness? Are employees a valuable asset of the firm? Geographically, where does the firm compete? Who are the firm’s customers?)
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The purpose of a mission statement is to declare all of these EXCEPT
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an annual financial plan
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An effective mission statement should do all of the following EXCEPT
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include monetary amounts, numbers, percentages and ratios
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Effective mission statements can vary in
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All of the above (length, content, format, and specificity)
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A good mission statement has
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a customer orientation
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In order to appeal to its diverse stakeholders, an effective mission statement should be
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reconciliatory
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The ideal length of a vision statement is
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one sentence
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The potential for creative growth in an organization can be limited by
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a mission statement that is too specific
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Which component of a mission statement addresses the firm’s distinctive competence or major competitive advantage?
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self concept
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A ____ statement needs to be broad to reconcile differences effectively among, and appeal to, an organization’s diverse stakeholders.
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mission
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Which group would be classified as stakeholders?
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All of the above (governments, creditors, suppliers, and employees)
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Which of the following is NOT one of the nine recommended components of a mission statement?
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strategies
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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.”
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customers
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All stakeholders:
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have claims and concerns about an organization, but these claims and concerns vary
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Intensity of competition ________ in lower-return industries
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is highest
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Changes in which of the following can significantly affect firms?
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all of the above: patent laws, antitrust legislation, tax rates, lobbying activities
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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
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competitive intelligence
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According to Porter, what is usually the most powerful of the five competitive forces?
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rivalry among competing firms
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Whenever new firms can easily enter a particular industry, the intensity of competitiveness among firms tends to
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increase
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What are educated assumptions about future trends and events called?
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forecasts
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In general, what happens to American goods in overseas markets when there is a strong dollar?
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they are more expensive
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Which of the following sectors of the economy would be most impacted by technological developments?
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aeronautics
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When an industry relies heavily on government contracts, which forecasts can be the most important part of an external audit?
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political
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Identifying and evaluating key social, political, economic, technological and competitive trends and events comprise
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performing an external audit
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What level of bargaining power do consumers have when the products being purchased are standard or undifferentiated?
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high
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According to I/O theorists, which of the following contributes LEAST to firm’s performance?
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internal resources
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What is competitive intelligence (CI)?
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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
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The I/O approach to competitive advantage advocates that external factors are ________ internal factors in a firm achieving competitive advantage.
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more important than
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The lingering high underemployment rate in the U.S. is an example of a(n) ________ force affecting business.
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economic
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What is the first step in designing an EFE Matrix?
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Identifying key external factors in the industry
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What is NOT one of Michael Porter’s five competitive forces?
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Bargaining power of unions
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______ is NOT part of an external audit.
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analyzing financial ratios
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Which function of management includes areas such as job design, job specifications, job analysis, and unity of command?
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organizing
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Which of the following is the process of influencing people to accomplish specific objectives?
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motivating
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Distribution includes
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warehousing
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A firm’s strengths that cannot be easily matched or imitated by competitors are called
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distinctive competencies
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Empirical indicators of resources are: being rare, hard to imitate, or
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not easily substitutable
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Which function of management includes all of those activities undertaken to ensure actual operations conform to planned operations?
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controlling
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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
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value chain analysis
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Which management function includes breaking tasks into jobs, combining jobs to form departments, and delegating authority?
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organizing
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The three all-encompassing internal resource categories used in the resource-based view are physical resources, human resources, and
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organizational resources
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All of the following are basic functions of marketing EXCEPT
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value chain analysis
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The ________ decision is the allocation and reallocation of capital and resources to projects, products, assets, and divisions of an organization.
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investment
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Which of the three finance and accounting decisions concerns determining the best capital structure for the firm and includes examining various methods by which the firm can raise capital?
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financing
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Staffing involves all of these activities EXCEPT
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analyzing customers
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The functions of finance/accounting includes three decisions, which are:
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Investment, Financing, dividend
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Which of the following is the first step in developing an IFE Matrix?
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Listing key internal strengths and weaknesses
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_____ management deals with inputs, transformations, and outputs that vary across industries and markets.
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production and operations
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All of the following are basic duties of management EXCEPT
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consolidating
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Financial ratios are used to compare a firm’s performance over different time periods, to compare the firm’s performance to industry averages, and to compare a firm’s performance with
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the performance of competitors
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What is a central strategy-implementation technique that allows an organization to examine the expected results of various actions and approaches?
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projected financial statement analysis
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The times-interest-earned ratio would be classified as a(n)
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leverage ratio
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What category of ratios measures how effectively a firm can maintain its economic position in the growth of the economy and industry?
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growth
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Which ratio is calculated by dividing profits before interest and taxes by total interest charges?
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times interest earned ratio
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Which of the following is NOT given as an example of a decision that may require finance/accounting policies?
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To be a price leader or a price follower
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In low-earning periods, too much ________ in the capital structure of an organization can endanger stockholders’ return and jeopardize company survival.
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debt
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What category of ratios includes return on total assets and return on stockholders’ equity?
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profitability
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Projected financial analysis is an important strategy-implementation technique because
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it allows an organization to examine the expected results of various actions and approaches.
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A benefit of using projected balance sheets and income statements is that
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the impact of various implementation decisions can be forecasted
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Which ratio would be considered an activity ratio?
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average collection period
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What is the most widely used technique for determining the best combination of debt and stock (as per the textbook)?
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Earnings per share/earnings before interest and taxes analysis
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The Balanced Scorecard measures performance according to each of the following dimensions EXCEPT:
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technology advancements
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What category of ratios measures a firm’s ability to meet maturing short-term obligations?
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liquidity
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Which of the following is NOT true regarding stock issuances?
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Their effect on stock price is a concern. They can require a company to share future earnings with all new shareholders. Dilution of ownership is a special concern.
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What becomes a more attractive financing technique when cost of capital is high (times of high stock prices)?
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stock issuance
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When a domestic company first begins to export to India, it is an example of
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market development
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Which strategy generally entails large research and development expenditures?
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product development
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What kind of strategy is retrenchment?
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a turnaround strategy
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Backward integration is effective in all of these cases EXCEPT
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when the advantages of stable prices are not important
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____ maintains a presence in every segment of the market; it gains a competitive advantage by distinguishing products with an excellent design, high awareness and easy accessibility.
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broad differentiation
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Which of these strategies is effective when the number of suppliers is small and the number of competitors is large?
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backward integration
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Selling all of a company’s assets, in parts, for their tangible worth is called
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liquidation
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Revlon closing its manufacturing plant in France and laying off 5 percent of its workforce is an example of
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retrenchment
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Websites that sell products directly to consumers are examples of which type of strategy?
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forward integration
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FedEx entering the computer repair business offering major corporations overnight computer repair is an example of
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unrelated diversification
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focuses on the High technology segments (High End, Performance, and Size); it gains competitive advantage by distinguishing products with an excellent design, high awareness, easy accessibility and new products.
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niche differentiation
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What refers to a strategy of seeking ownership of, or increased control over a firm’s competitors?
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horizontal integration
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Retrenchment would be an effective strategy when an organization
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is plagued by inefficiency, low profitability, poor employee morale and pressure from stockholders to improve performance.
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concentrates on the high end, traditional, and low end segments; it gains competitive advantage with excellent design, high awareness, easy accessibility, and new products.
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Differentiation with Product Lifecycle Focus
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Integration strategies are sometimes collectively referred to as which of the following categories of strategies?
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Vertical integration
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____ maintains a presence in all segments of the market; it gains a competitive advantage by keeping R&D, production, and material costs to a minimum, enabling the company to compete on the basis of price.
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broad cost leader
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Which strategy seeks to increase market share for present products or services in present markets through greater marketing efforts?
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market penetration
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____ centers on the High End, Traditional and Low End segments; it gains competitive advantage by keeping R&D costs, production costs and material costs to a minimum, enabling it to compete on the basis of price.
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Cost Leader with Product Lifecycle Focus
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_____ concentrates primarily on the Traditional and Low end segments of the market; it gains a competitive advantage by keeping R&D costs, production costs and material costs to a minimum, enabling the company to compete on the basis of price.
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Niche Cost Leader
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Which strategy should be implemented when a division is responsible for an organization’s overall poor performance?
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divestiture
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Mergers and acquisitions are created for all the following reasons EXCEPT to:
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increase the number of employees
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Formal statements of organizational philosophy, charters, creeds, materials used for recruitment and selection, and socialization help an organization
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link culture to strategy
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A divisional structure by product is most effective when
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all of the above
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The primary benefit sought from restructuring is
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cost reduction
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Which of the following focuses in effectiveness?
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strategy formulation
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Which organizational structure is the most widely used?
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functional
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Why do changes in company strategy often require changes in the way an organization is structured?
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Structure dictates how goals and objectives will be established.
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What is the most complex form of organizational structure?
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matrix
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Medium-sized firms tend to use which type of structure?
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divisional
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Strategy formulation
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requires coordination among a few individuals.
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Which organizational structure has the disadvantage of ambiguous roles for senior executives
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strategic business unit
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A firm uses information technology to reconfigure work, jobs, and processes. As a result, cost, quality, service, and speed are improved. What has the firm engaged in?
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reengineering
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All of the following are ways and means for altering an organization’s culture EXCEPT
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retrenchment
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All of the following are symptoms of an ineffective organizational structure EXCEPT
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less levels of management
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Restructuring is also referred to as
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delayering
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What action involves reconfiguring or redesigning work, jobs, and processes for the purpose of improving cost, quality, service, and speed?
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reengineering
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Strategy implementation is
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Answers B and D are both correct: Managing forces during the action Focuses on efficiency
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What type of organizational structure promotes specialization of labor and allows rapid decision making?
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functional structure
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Which of the followings is also called process management, process innovation, or process redesign?
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reengineering
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What is NOT one of the basic ways a divisional structure can be organized?
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by cost
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Which of these is true about strategy implementation?
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It is primarily an operational process.
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A divisional structure by geographic area is most appropriate when:
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organizations have similar branch facilities located in widely dispersed areas.
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Which of the following is a management issue central to strategy implementation?
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All of the above (devising policies, revising reward and incentive plans, minimizing resistance to change, developing an effective human resources function)
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Market segmentation psychographic variables include factors such as social class, personality, region and user rate’. This statement is:
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False. Psychographic only includes social class and personality.
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Which variable would be considered part of the “product” element of the marketing mix?
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All of these answers are correct (Quality, Packaging, Brand name, Warranty)
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Which variable would be considered part of the “promotion” element of the marketing mix?
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All of these answers are correct (Publicity, personal selling, advertising, sales promotion)
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Subdividing a market into distinct subsets of customers according to their needs and buying habits is known as
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market segmentation
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Why is market segmentation an important variable in the strategy-implementation process?
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It directly affects marketing mix variables.
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Why is market segmentation an important variable in strategy implementation?
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All of the above (It allows a small firm to compete successfully with a large firm., It allows a firm to operate with limited resources., Mass production, mass distribution, and mass advertising are not always required., Market segmentation decisions directly affect marketing mix variables.)
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Which of the following variables is NOT directly affected by market segmentation (marketing mix variables)?
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process
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What entails developing schematic representations that reflect how your products or services compare to competitors’ on dimensions most important to success in the industry?
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perceptual mapping
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Which variable would be considered part of the “place” element of the marketing mix?
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sales territory
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Which variable would be considered part of the “product” element of the marketing mix?
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packaging
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All of the following are potential advantages to initiating, continuing, and/or expanding international operations EXCEPT
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foreign operations could be seized by nationalistic factions
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Bribery involves
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bestowing a gift to influence the recipient’s conduct.
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Simply having a code of ethics
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is insufficient to guarantee that employees behave in an ethical manner
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All of the following are potential disadvantages to initiating, continuing, or expanding business across national borders EXCEPT
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foreign operations can absorb excess capacity, reduce unit costs, and spread economic risks over a wider number of markets
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_____ is a set of standards in fields such as environmental auditing, performance evaluation, and labeling, that is adopted by thousands of firms worldwide to certify to their constituencies that they are conducting business in an environmentally friendly manner
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ISO 14000 / 14001
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______ is the extent that an organization’s operations and actions protect, mend, and preserve rather than harm or destroy the natural environment.
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sustainability
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Preserving the environment should be a permanent part of doing business for which of the following reasons?
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More lenders are examining the environmental liabilities of businesses seeking loans
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_____ can enable firms to learn the technology, culture, and business practices of other people and to make contacts with potential customers, suppliers, creditors, and distributors in foreign countries.
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joint ventures
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Americans place an exceptionally high priority on ________ whereas many foreigners place more worth on ________
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time;relationships
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_____ refers to policies that require employees to report any unethical violations they discover or see in the firm.
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whistle blowing
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According to the text, the first social responsibility of any business is to
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make enough profit to cover the costs of the future, because if this is not achieved then no other social responsibility can be met
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_____ is a process of doing business worldwide, so strategic decisions are made based on global profitability of the firm rather than just domestic considerations
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globalization
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Which of the following is a potential advantage of conducting international operations?
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Competitors in foreign markets may not exist, or competition may be less intense than in domestic markets
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Organizations that conduct business operations across national borders are called
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multinational corporations
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All of the following are things that many cultures around the world value more than the competitiveness that is important in the USA EXCEPT
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individualism
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______includes designing, producing, and marketing products with global needs in mind, instead of considering individual countries alone
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global strategy

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