MGMT 4303 – Chapter 1 – Flashcards
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Which of the following is an example of a corporate strategy?
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diversify product line to appeal to more people
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According to organizational learning theory, an organization uses knowledge to improve the fit between itself and its environment (T/F)
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true
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Which one of the following is included in the firm's societal environment?
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economic forces
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An example of an objective is "increased profitability" while an example of a goal is "to increase profitability in 2010 by 15% over 2009" (T/F)
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false
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As a part of the strategic management process, evaluation and control is concerned with all of the following EXCEPT
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determining top management compensation
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Which of the following is an example of a policy?
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pay highest salary to keep high quality employees
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The ability of an organization to reshape its environment is described by
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the strategic choice perspective
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Research done by Henry Mintzberg suggests that strategy formulation
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is typically an irregular and a discontinuous process
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The time horizon involved with regard to basic financial planning is usually
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one year
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One tenet of the learning organization is to maintain stability (T/F)
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false
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In the externally oriented planning phase, plans are developed by heavily involving the input of managers from lower levels (T/F)
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false
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The currency used to integrate the monetary systems of the European Union (EU) is called the
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euro
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A goal differs from an objective because it
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is open-ended
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The goal of NAFTA is complete economic integration (T/F)
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false
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The strategic audit is an all-inclusive list of critical questions needed for a detailed strategic analysis of any business (T/F)
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false
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While there are litigation and physical risks to companies as a result of climate change, there is no risk currently identified to the company on its overall reputation (T/F)
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false
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The monitoring, evaluating, and disseminating of information form the external and internal environments to key people within the corporation is referred to as
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environmental scanning
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Climate change has become a growing concern for businesses to include in their corporate strategies (T/F)
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true
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The corporate missions is best described by which one of the following?
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the purpose or reason for the corporation's existence
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A large, multidivisional business has three levels in its hierarchy of strategy:
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corporate, business, and functional
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Which of the following is an example of an objective?
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increase sales by 10% over last year
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All of the following reflect activities of a learning organization EXCEPT
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alienating competitors in the industry
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Strategic management is that set of managerial decisions and actions that determine the long-run performance of a corporation. Which one of the following is NOT one of the basic elements of the strategic management process?
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statistical process control
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The regional trade association composed of Argentina, Brazil, Uruguay, and Paraguay is called
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mercosur
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According to Alfred Chandler
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all of the above
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A budget is a statement of a corporation's programs in dollar terms. Which if NOT true of the budgetary function?
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only one budget is necessary to capture all programs
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Performance results are monitored at the strategy formulation phase of the strategic management process (T/F)
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false
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The emphasis of strategic management is on
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monitoring and evaluation external opportunities and threats in light of a corporation's strengths and weaknesses
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One of the benefits of strategic management is a clearer sense of vision for the firm (T/F)
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true
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All of the following reflect categories of organizational risk as a result of climate change EXCEPT
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sustainability risk
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The task environment
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includes those elements of groups within an organization's industry
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One member of the European Union (EU) is Chile (T/F)
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false
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The mode of strategy formulation used when top management has a reasonably clear idea of the corporation's mission and objectives, but it chooses to develop a series of tentative or partial strategies instead of developing full blown strategies is called
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logical incrementalism
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Mintzberg's entrepreneurial mode is sometimes referred to as "muddling through" since this decision making mode tends to be more reactive than proactive in the search for new opportunities (T/F)
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false
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The type of strategy which describes a company's overall direction in terms of its general attitude toward growth and the management of its various businesses and product line is
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corporate
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As more industries become global, strategic management is becoming less important in positioning a company for long-term competitive advantage (T/F)
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false
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The internal environment includes the variables of opportunities and threats (T/F)
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false
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The process by which strategies and policies are put into action through the development of programs, budgets, and procedures is
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strategy implementation
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Research indicates that a broad missions statement may be best in a turbulent environment (T/F)
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false
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Research of the planning practices of companies in the oil industry concluded that the real value of modern strategic planning is more
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in strategic thinking and organizational learning
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A hierarchy of strategy emphasized the need for the three levels of strategy to complement and support one another (T/F)
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true
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A business strategy may include competitive or cooperative strategies (T/F)
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false
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Strategic planning in a multidivisional corporation
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should be a formalized and sophisticated system
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Punctuated equilibrium described organizations as evolving through relatively long periods of stability punctuated by relatively short bursts of fundamental change (T/F)
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true
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Strategic flexibility is the ability to shift from one dominant strategy to another (T/F)
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true
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Which of the following is an example of a mission statement?
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develop and sell quality appliances worldwide
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Which one of the following is included in the firm's task environment?
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stockholders
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Logical incrementalism is a useful decision making mode when the environment is rapidly changing and when it is important to build consensus (T/F)
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true
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Member of the European Union (EU) include all of the following EXCEPT
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malaysia
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In the final phase of strategic management, strategic information is available to
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people throughout the organization
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Corporate strategy occurs at the business unit or product level (T/F)
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false
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One of the benefits of globalization is
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economies of scale
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The type of strategy which achieves corporate and business unit objectives and strategies by maximizing resource productivity is
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functional
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Which of the following is an example of a program?
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reduce final assembly time to three days by having suppliers build plan sections
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Canada, the United States, and Mexico are affiliated economically under which trade alliance?
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NAFTA
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Which theory proposes that once an organization is successfully established in a particular environmental niche, it is unable to adapt to changing conditions?
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population ecology
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Strategic planning within a small organization
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may be informal or irregular
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Population ecology is a theory that proposes organizations can and do adapt to change by imitating other successful organizations (T/F)
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false
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A checklist of questions, by area or issue that enables a systematic analysis to be made of various corporate functions and activities is referred to as a/an
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strategic audit
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The Strategic Management Model presents the following process of strategy formulation:
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mission, objective, strategies, and policies
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The ability of a corporation to shift from one dominant strategy to another is called
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strategic flexibility
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IBM under CEO Louis Gerstner and his strategic decision to invest in services in 1993, is an example of which mode of strategic decision making?
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planning
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As defined in this course, a policy is
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a broad guideline for making decisions that links the formulation of strategy with its implementation
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According to Henry Mintzberg, the three most typical approaches to strategic decision making are
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entrepreneurial, adaptive, and planning
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The S in S.W.O.T. stands for
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strengths
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The T in S.W.O.T. stands for
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threats
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The integrated internationalization of markets and corporations is called
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globalization
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Environmental sustainability reflects business practices to reduce a firm's impact on the physical environment (T/F)
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true
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The development of long range plans for the effective management of environmental opportunities and threats in light of corporate strengths and weaknesses is known as
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strategy formulation
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Research suggests that strategic management evolves through four sequential phases in corporations. The first phase is
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basic financial planning
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A strategic decisions is rare, consequential, and directive (T/F)
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false
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Strategic Management includes:
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internal and external environment scanning, strategy formulation, strategy implementations, and evaluation and control
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Phases of Strategic Management
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1. basic financial planning, 2. forecast-based planning, 3. externally oriented strategic planning, and 4. strategic management
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Benefits of Strategic Management
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clearer sense of strategic vision for the firm, sharper focus on what is strategically important, and improved understanding of a rapidly changing environment
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Risk of Climate Change include
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regulatory risk, supply chain risk, product and technology risk, litigation risk, repetitional risk, and physical risk
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Learning Organization
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an organization skilled at creating, acquiring, and transferring knowledge and at modifying its behavior to reflect new knowledge and insights
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Main activities of a learning organization include
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solving problems systematically, experimenting with new approaches, learning form past experience, history, and experiences of others, and transferring knowledge quickly and easily throughout the organization
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Vision
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describes what the organization would like to become
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Objectives
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the end results of planned activities
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Strategies
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form a comprehensive master plan that states how the corporation will achieve its mission and objectives (corporate, business, and functional)
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Evaluation and Control
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the process in which corporate activities and performance results are monitored so that actual performance can be compared to desired performance
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Feedback/ Learning Process
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revise or correct decisions based on performance
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Triggering Event
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something that acts as a stimulus for a change if strategy and can include: new CEO, external intervention, threat of change of ownership, performance gap, and strategic inflection point
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Characteristics of Strategic Decision making include:
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rare, consequential, and directive
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Strategic Decisions Making Process
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evaluate current performance results, reviewing corporate governance, scan and assess the external environment, scan and assess the internal corporate environment, analyze strategic (SWOT) factors, generate, evaluate and select the best alternative strategy, implement selected strategies, and evaluate implemented strategies
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The real value of strategic planning is ___ and ___
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strategic thinking; organizational learning
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Organizations that engage in strategic management generally do not outperform those that do not (T/F)
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false
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The Phase Three of strategic management, externally-oriented planning, planning is given directly to lower-level managers as top management attempts to involve itself less (T/F)
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false
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Many companies today are becoming more horizontally managed, interactive organization while attempting to adapt more quickly to changing conditions by becoming "learning organizations" (T/F)
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true
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The effects of climate change on industries and companies throughout the world can be grounded into six categories of risks. among these risks is
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all of the above
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A business strategy describes a company's overall direction in terms of its general attitude toward growth and the management of its various businesses and product lines (T/F)
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false
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Strategic decisions must be made by a conglomerate or group and must occur over an extended period of careful considerations (T/F)
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true
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The decision making mode that is characterized by a focus on opportunities and in which problems are secondary is the ___ mode of strategic decision making
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entrepreneurial
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A strategic audit includes an evaluation of current performance, environmental scanning, strategy formulation, strategy implementations, and evaluation control (T/F)
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true
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Each question in a particular area of strategic audit must be ver specific to ensure that there in not a further dissection of any one question into additional sub questions (T/F)
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false
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The greater the level of planning intensity, the greater the level of financial performance (T/F)
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true
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Procedures are a system of sequential steps or techniques that describe in detail how a particular task or job is to be done (T/F)
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true
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A simple statement, such as "increased profitability", is an objective, not a goal (T/F)
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false
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Most large organizations are set up through frequent evaluation periods which fundamental change in implemented (T/F)
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false
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The decision making mode that involves the systematic gathering of appropriate information for situations analysis, the generation of feasible alternative strategies and the rational selection of the most appropriate strategy is the ___ mode of strategic decision making
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planning
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Strategic decision making modes are entrepreneurial, adaptive, planning, and logical incrementalism (T/F)
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true
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Unlike many other decisions, strategic decisions deal with the long run future of an entire organization (T/F)
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true
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A ___ is a type of management diagnostic tool to pin point corporate wide problem areas and to highlight organizational strengths and weaknesses
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strategic audit
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To be effective, strategic management must be a formal process (T/F)
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false
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A difference between basic financial planning and forecasting based planning is
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forecast based planning incorporates internal and external information
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The variables structure, culture, and resources pertain to the
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internal environment
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Top-down planning that emphasizes formal strategy formulation and leaves the implementation issues to lower level management is known as
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externally oriented planning
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Knowing a company is mindful of its impact on the environment seldom changes consumer buying habits (T/F)
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false
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Which of the following is NOT a part of strategy implementation?
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performance evaluation
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In a survey of 50 corporations, which of the following was rated as a benefits of strategic management?
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clear sense of vision for the firm
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The type os strategy which emphasizes the improvement of the competitive position of a corporations products or services in a particular industry or market segment served by a business unit is
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business
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Which of the following statements is NOT true of strategic inflection point?
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a new CEO is an example of a strategic inflection point
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