question

Alternative strategies don't come out of the blue; they are derived from the firm's vision, mission and objectives.

answer

True

question

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

answer

True

question

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

answer

True

question

When completing the matching stage of the strategy-formulation framework, the SWOT Matrix, the SPACE Matrix, the BCG Matrix, IE Matrix, and Grand Strategy Matrix can be completed in any order.

answer

True

question

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

answer

True

question

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

answer

True

question

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

answer

True

question

Market penetration can be classified as either a conservative, aggressive, or competitive strategy.

answer

True

question

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

answer

True

question

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

answer

True

question

Relative market share position is given on the x-axis of the BCG Matrix.

answer

True

question

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

answer

True

question

Stars, Question Marks, Cash Cows and Dogs are the four quadrants exhibited by the SPACE Matrix.

answer

True

question

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

answer

True

question

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

answer

True

question

Having no temporal qualities, the BCG Matrix is a snapshot of an organization at a given point in time.

answer

True

question

The IE Matrix requires more information about the divisions than the BCG Matrix.

answer

True

question

The IE Matrix can be divided into three major regions that have different strategy implications: grow and build, hold and maintain, and harvest or divest.

answer

True

question

According to the Grand Strategy Matrix, when a Quadrant I firm is too heavily committed to a single product, then related diversification may reduce the risks associated with a narrow product line.

answer

True

question

To objectively evaluate feasible alternative strategies identified in Stage 2, the QSPM uses input information derived from Stage 1.

answer

True

question

Total attractiveness scores are defined as the product of multiplying the weights by the Attractiveness Scores in each row. Are computed in the fifth step of the QSPM.

answer

True

question

One positive feature of QSPM is that it requires intuitive judgments and educated assumptions.

answer

True

question

Strategy changes may be highly effective and productive if a supportive culture exists.

answer

True

question

Successful strategists minimize their own political exposure on issues that are highly controversial and in circumstances where opposition from major power centers is likely.

answer

True

question

Shifting focus from specific issues to more general ones may increase strategists' options for gaining organizational commitment.

answer

True

question

Today boards of directors are composed mostly of outsiders who are becoming more involved in an organization's strategic management.

answer

True

question

Strategy analysis and choice largely involves making ________ decisions based on ________ information.

answer

subjective; objective

question

Which stage of the strategy-formulation framework involves the Quantitative Strategic Planning Matrix?

answer

Stage 3

question

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

answer

intuition and analysis.

question

Which stage of the strategy-formulation framework contains the Internal-Factor Evaluation Matrix?

answer

Input stage

question

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

answer

The SO cell

question

Which strategies use a firm's strengths to avoid or reduce the impact of external threats?

answer

ST

question

How many cells are in a SWOT Matrix?

answer

Nine

question

Which of the following is a limitation associated with a SWOT Matrix?

answer

The matrix has no temporal qualities.

question

What type of strategy would divestiture be classified as?

answer

Defensive

question

What are the two external dimensions of the SPACE Matrix?

answer

Stability position and industry position

question

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

answer

Conservative

question

The BCG Matrix is designed specifically to enhance which type of firm's efforts to formulate strategies?

answer

Companies with more than one division

question

How would a division with a low relative market share position in a high growth industry be described?

answer

Question Mark

question

A division with a high relative market share position in a low-growth industry can be described as a

answer

Cash Cow.

question

Strategy implementation is the managing of forces during the action, whereas Strategy formulation is the positioning of forces before the action.

answer

True

question

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

answer

True

question

Horizontal consistency is as important as vertical consistency in developing annual objectives.

answer

True

question

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

answer

True

question

Avoidance, diffusion and confrontation are the classifications for various approaches of managing and resolving conflict.

answer

True

question

Holding a meeting at which conflicting parties present their views and work through their differences is part of the confrontation technique of managing conflict.

answer

True

question

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

answer

True

question

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

answer

True

question

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

answer

True

question

When developing an organizational chart, it is not wise to recommend a dual title for just one executive.

answer

True

question

In terms of number of employees, restructuring usually involves decreasing the size of the firm.

answer

True

question

The focus of restructuring is cost reduction.

answer

True

question

On average, CEOs at Japanese companies are paid less than CEOs at American or European companies.

answer

True

question

A rational change strategy means convincing individuals that the change is to their personal advantage.

answer

True

question

Strategy formulation requires coordination among a few individuals, but strategy implementation requires coordination among many.

answer

True

question

A top-down flow of communication is essential for developing bottom-up support.

answer

True

question

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

answer

True

question

Not allocating resources according to the priorities indicated by approved objectives is detrimental to the strategic-management process.

answer

True

question

Well-run organizations are not able to completely avoid conflict.

answer

True

question

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

answer

True

question

A functional structure leads to short-term and narrow thinking.

answer

True

question

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

answer

True

question

With the matrix structure it is common for functional resources to not be duplicated.

answer

True

question

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

answer

True

question

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

answer

True

question

Cornerstones of reengineering are decentralization, reciprocal interdependence and information sharing.

answer

True

question

People's anxieties are raised with the thought of change because they fear economic loss, inconvenience, uncertainty and a break in normal social patterns.

answer

True

question

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

answer

True

question

Strategists should strive to create a work environment in which change is recognized as necessary and beneficial so that individuals can more easily adapt to change.

answer

True

question

A force change strategy is plagued by low commitment and high resistance.

answer

True

question

Organizational change today should be viewed as a continuous project.

answer

True

question

Changing a strategy to fit an existing culture is not as effective as changing a firm's culture to fit a new strategy.

answer

True

question

Strategists should strive to preserve, emphasize, and build upon aspects of an existing culture that are support proposed strategies.

answer

True

question

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

answer

True

question

When attachments to a culture are severed in an organization's attempt to change direction, employees and managers often experience deep feelings of grief.

answer

True

question

Production processes typically constitute more than 70 percent of a firm's total assets.

answer

True

question

JIT significantly reduces the costs of implementing strategies.

answer

True

question

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

answer

True

question

ESOPs do not work well in firms with fluctuating payrolls and profits.

answer

True

question

Being long-term in nature, strategy implementation affects top, middle managers and lower-level employees.

answer

True

question

Given that much information on individuals is available online, the extent to which companies can track individuals' movements on the Internet is of increasing concern to consumers today.

answer

True

question

The marketing mix component variables are product, place, promotion, and price.

answer

True

question

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

answer

True

question

Segmenting consumer markets is generally simpler and easier than segmenting industrial markets.

answer

True

question

The next step after segmenting markets so a firm can target particular customer groups is to find out what customer groups want and expect.

answer

True

question

Multidimensional scaling involves examining three or more criteria simultaneously in a product-positioning analysis.

answer

True

question

It is never okay for firms to create expectations that exceed the service the firm can or will offer if it will attract customers.

answer

True

question

Besides net profit from operations and the sale of assets, two basic sources of funds for an ongoing enterprise are debt and equity.

answer

True

question

Additional capital is often required for successful strategy implementation.

answer

True

question

In times of depressed stock prices, stock issuances debt may prove to be the most suitable alternative for obtaining capital.

answer

True

question

When performing projected financial analysis, the income statement should be prepared before the balance sheet .

answer

True

question

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

answer

True

question

A financial budget is a document that details how funds will be obtained and spent for a specified period of time.

answer

True

question

The most common type of financial budget is the annual budget.

answer

True

question

As a balance sheet entry, goodwill represents when a firms pays more than the book value to purchase another firm.

answer

True

question

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

answer

True

question

Going public means selling off a percentage of your company to other in order to raise capital.

answer

True

question

According to research, the most successful new product companies use a research and development strategy that ties internal strengths to external opportunities and is linked with corporate objectives.

answer

True

question

A major effort in R may be very risky if technology is changing rapidly and the market is growing slowly.

answer

True

question

A current trend in R management involves the lifting of the veil of secrecy whereby firms, even major competitors, are joining forces to develop new products.

answer

True

question

With information technology, in some cases it is possible to do away with the workplace by allowing employees to work at home or anywhere, anytime.

answer

True

question

What level of management is directly affected by strategy implementation?

answer

Plant managers Sales managers Project managers Division managers

question

Which two variables rank as marketing's most important contributions to strategic management?

answer

Market segmentation and product positioning.

question

Why is market segmentation an important variable in strategy implementation?

answer

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.

question

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

answer

It directly affects marketing mix variables.

question

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

answer

Supply and demand

question

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

answer

Sales territory

question

Which is not a required step in product positioning?

answer

Serve two segments with the same strategy

question

Multidimensional scaling is used to determine

answer

product positioning.

question

Which of these is not a rule of thumb when using product positioning as a strategy-implementation tool?

answer

"Try to serve more than one segment with the same strategy."

question

In the low earnings period, too much ________ in the capital structure of an organization can endanger stockholders' return and jeopardize company survival.

answer

debt

question

What is the most widely used technique for determining the best combination of debt and stock?

answer

Earnings per share/earnings before interest and tax analysis

question

What becomes a more attractive financing technique when cost of capital is high?

answer

Stock issuance

question

A benefit of using projected balance sheets and income statements is that

answer

an organization can compute projected financial ratios under various scenarios.

question

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

answer

Projected financial statement analysis

question

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

answer

Percentage-of-sales method

question

Retained earnings is obtained by subtracting

answer

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

question

Which of these is the most common type of budgeting time frame?

answer

Annual

question

What is the most common type of financial budget?

answer

Cash

question

Adequate, timely feedback is important to effective strategy evaluation.

answer

True

question

According to Richard Rumelt, consonance and advantage are mostly based on a firm's external assessment.

answer

True

question

Strategy evaluation is becoming increasingly difficult with the passage of time, given technological advances.

answer

True

question

Competitive advantages normally are the result of superiority in one of three areas: resources, skills, or position.

answer

True

question

Strategy evaluation should be performed on a continuous basis rather than at the end of specified periods of time.

answer

True

question

Strengths, weaknesses, opportunities and threats should continually be monitored for change because it is not really a question of whether these factors will change, but rather when they will change and in what ways.

answer

True

question

Specific financial ratios are always used to evaluate strategies.

answer

True

question

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

answer

True

question

Corrective action in strategy evaluation is necessary to keep an organization on track toward achieving stated objectives.

answer

True

question

According to research, participation in strategy-evaluation activities is one of the best ways to overcome individuals' resistance to change.

answer

True

question

Each year, Fortune publishes strategy evaluation research on both the United States and other countries.

answer

True

question

Timely approximate information is generally more desirable as a basis for strategy evaluation than accurate information that does not depict the present.

answer

True

question

There is no one ideal strategy-evaluation system for all organizations.

answer

True

question

Strategies cannot and should not try to cover all bases by planning for all possible contingencies.

answer

True

question

Identifying both beneficial and unfavorable events that could possibly derail the strategy or strategies is the first step of effective contingency planning.

answer

True

question

Too much emphasis on evaluating strategies may be expensive and counterproductive.

answer

True

question

According to Rumelt, consistency and feasibility are largely based on a firm's internal assessment.

answer

True

question

The decreasing time span for which planning can be done with any degree of certainty is a reason strategy evaluation is more difficult today.

answer

True

question

Regardless of the size of the organization, a certain amount of "management by wandering around" at all levels is essential to effective strategy evaluation.

answer

True

question

Changes in the organization's management, marketing, finance/accounting, production/operations, R and MIS strengths and weaknesses should all be the focus of a revised IFE matrix in strategy evaluation.

answer

True

question

When measuring organizational performance, you need to compare expected results to actual results.

answer

True

question

Measuring organizational performance includes comparing expected results to actual results, investigating deviations from plans, evaluating individual performance and examining progress being made toward meeting stated objectives.

answer

True

question

Measuring organizational performance includes comparing expect results to actual results, investigating deviations from plans, evaluating individual performance, and examining progress being made toward meeting stated objectives.

answer

True

question

Alvin Toffler argues that environments are becoming so dynamic and complex that they threaten people and organizations with future shock, in his thought-provoking books entitled Future Shock and The Third Wave.

answer

True

question

The basic form of a Balanced Scorecard will vary for different organizations or industries.

answer

True

question

The most admired company in the world in 2009 was Nike.

answer

True

question

The test of an effective evaluation system is its usefulness not its complexity.

answer

True

question

Contingency plans are alternative plans that can be put into effect if certain key events do not occur as expected.

answer

True

question

Contingency plans should be as simple as possible.

answer

True

question

A frequently used tool in strategy evaluation is the audit.

answer

True

question

The accounting switch from GAAP to IFRS in the U.S. is going to cost businesses millions of dollars in fees and upgraded software systems and training.

answer

True

question

GAAP standards comprise 25,000 pages, whereas IFRS standards comprise 5,000 pages.

answer

True

question

Which of these is a basic activity of strategy evaluation?

answer

Reviewing the underlying internal and external factors that represent the bases of current strategies. Measuring organizational performance. Taking corrective actions.

question

All of these are Richard Rumelt's criteria to evaluate a strategy except:

answer

advantage. consistency. feasibility. (distinctiveness) consonance.

question

Which of the following is not a reason for the increasing difficulty of evaluating strategies?

answer

(Product life cycles are longer) Domestic and world economies are less stable. Product development cycles are shorter. Technological advancement is more rapid. Change is occurring more frequently.

question

Competitive advantage normally is the result of superiority in resources, skills and

answer

position.

question

If success for one organizational department means failure for another department, then strategies may be

answer

inconsistent.

question

Corrective actions are almost always _______ except when external and internal factors have not significantly changed and the firm is progressing satisfactorily toward achieving stated objectives.

answer

needed

question

A revised ________ should indicate how effective a firm's strategies have been in response to key opportunities and threats.

answer

EFE matrix

question

What is the basis for quantitative financial evaluation?

answer

Financial ratios

MGMT499 6 – 9 – Flashcards

Unlock all answers in this set

Haven't found what you were looking for?

Search for samples, answers to your questions and flashcards