MGMT499 6 – 9 – Flashcards

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Alternative strategies don't come out of the blue; they are derived from the firm's vision, mission and objectives.
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True
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The first stage of the strategy-formulation framework is the input stage, and it is directly followed by the matching stage.
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True
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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.
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True
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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.
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True
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Strengths-opportunities strategies are based on using a firm's internal strengths to take advantage of external opportunities and threats.
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True
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One of the steps of the SWOT Matrix is to list the firm's key external opportunities.
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True
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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).
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True
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Market penetration can be classified as either a conservative, aggressive, or competitive strategy.
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True
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Conservative strategies in a SPACE Matrix most often include product development, market development, market penetration and related diversification.
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True
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A firm should pursue aggresive strategies if the coordinates of a SPACE directional vector are (+2,+3).
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True
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Relative market share position is given on the x-axis of the BCG Matrix.
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True
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The size of the circle in a BCG Matrix corresponds to the proportion of corporate revenue generated by that business unit.
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True
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Stars, Question Marks, Cash Cows and Dogs are the four quadrants exhibited by the SPACE Matrix.
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True
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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.
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True
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The BCG Matrix does not reflect whether or not various divisions or their industries are growing over time.
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True
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Having no temporal qualities, the BCG Matrix is a snapshot of an organization at a given point in time.
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True
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The IE Matrix requires more information about the divisions than the BCG Matrix.
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True
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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.
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True
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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.
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True
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To objectively evaluate feasible alternative strategies identified in Stage 2, the QSPM uses input information derived from Stage 1.
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True
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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.
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True
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One positive feature of QSPM is that it requires intuitive judgments and educated assumptions.
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True
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Strategy changes may be highly effective and productive if a supportive culture exists.
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True
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Successful strategists minimize their own political exposure on issues that are highly controversial and in circumstances where opposition from major power centers is likely.
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True
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Shifting focus from specific issues to more general ones may increase strategists' options for gaining organizational commitment.
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True
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Today boards of directors are composed mostly of outsiders who are becoming more involved in an organization's strategic management.
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True
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Strategy analysis and choice largely involves making ________ decisions based on ________ information.
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subjective; objective
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Which stage of the strategy-formulation framework involves the Quantitative Strategic Planning Matrix?
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Stage 3
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Each of the nine techniques included in the strategy formulation framework rely on the use of
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intuition and analysis.
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Which stage of the strategy-formulation framework contains the Internal-Factor Evaluation Matrix?
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Input stage
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Which section of the SWOT Matrix involves matching internal strengths with external opportunities?
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The SO cell
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Which strategies use a firm's strengths to avoid or reduce the impact of external threats?
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ST
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How many cells are in a SWOT Matrix?
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Nine
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Which of the following is a limitation associated with a SWOT Matrix?
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The matrix has no temporal qualities.
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What type of strategy would divestiture be classified as?
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Defensive
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What are the two external dimensions of the SPACE Matrix?
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Stability position and industry position
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What type of strategies would you recommend when a firm's SPACE Matrix directional vector has the coordinates (-2, +3)?
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Conservative
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The BCG Matrix is designed specifically to enhance which type of firm's efforts to formulate strategies?
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Companies with more than one division
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How would a division with a low relative market share position in a high growth industry be described?
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Question Mark
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A division with a high relative market share position in a low-growth industry can be described as a
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Cash Cow.
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Strategy implementation is the managing of forces during the action, whereas Strategy formulation is the positioning of forces before the action.
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True
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Unlike strategy formulation, strategy implementation varies considerably among different types and sizes of organizations.
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True
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Horizontal consistency is as important as vertical consistency in developing annual objectives.
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True
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Policies clarify what can and cannot be done in pursuit of an organization's objectives.
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True
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Avoidance, diffusion and confrontation are the classifications for various approaches of managing and resolving conflict.
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True
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Holding a meeting at which conflicting parties present their views and work through their differences is part of the confrontation technique of managing conflict.
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True
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Tasks and activities are grouped together by business function in a functional organizational structure.
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True
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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.
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True
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The most complex of all organizational structures is a matrix structure.
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True
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When developing an organizational chart, it is not wise to recommend a dual title for just one executive.
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True
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In terms of number of employees, restructuring usually involves decreasing the size of the firm.
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True
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The focus of restructuring is cost reduction.
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True
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On average, CEOs at Japanese companies are paid less than CEOs at American or European companies.
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True
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A rational change strategy means convincing individuals that the change is to their personal advantage.
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True
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Strategy formulation requires coordination among a few individuals, but strategy implementation requires coordination among many.
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True
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A top-down flow of communication is essential for developing bottom-up support.
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True
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Undesirable conduct such as distorting the records can be a result of overemphasis on achieving objectives.
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True
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Not allocating resources according to the priorities indicated by approved objectives is detrimental to the strategic-management process.
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True
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Well-run organizations are not able to completely avoid conflict.
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True
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Exchanging members of conflicting parties so each can gain an appreciation of the other's point of view exemplifies a confrontation approach.
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True
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A functional structure leads to short-term and narrow thinking.
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True
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With a divisional structure by customer, an organization can effectively cater to the requirements of clearly defined customer groups.
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True
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With the matrix structure it is common for functional resources to not be duplicated.
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True
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In developing an organizational chart, avoid having a particular person reporting to more than one person above them in the chain of command.
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True
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Reengineering does not usually affect the organizational structure or chart, nor does it imply job loss or employee layoffs.
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True
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Cornerstones of reengineering are decentralization, reciprocal interdependence and information sharing.
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True
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People's anxieties are raised with the thought of change because they fear economic loss, inconvenience, uncertainty and a break in normal social patterns.
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True
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When the rational type change strategy is successful, strategy implementation can be relatively easy.
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True
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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.
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True
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A force change strategy is plagued by low commitment and high resistance.
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True
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Organizational change today should be viewed as a continuous project.
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True
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Changing a strategy to fit an existing culture is not as effective as changing a firm's culture to fit a new strategy.
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True
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Strategists should strive to preserve, emphasize, and build upon aspects of an existing culture that are support proposed strategies.
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True
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Recruitment, promotion, and mentoring are ways to alter an organization's culture.
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True
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When attachments to a culture are severed in an organization's attempt to change direction, employees and managers often experience deep feelings of grief.
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True
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Production processes typically constitute more than 70 percent of a firm's total assets.
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True
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JIT significantly reduces the costs of implementing strategies.
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True
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Besides reducing worker alienation and stimulating productivity, ESOPs allow firms other benefits, such as substantial tax savings.
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True
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ESOPs do not work well in firms with fluctuating payrolls and profits.
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True
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Being long-term in nature, strategy implementation affects top, middle managers and lower-level employees.
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True
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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.
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True
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The marketing mix component variables are product, place, promotion, and price.
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True
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The most common bases for segmenting markets are geographic and demographic.
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True
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Segmenting consumer markets is generally simpler and easier than segmenting industrial markets.
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True
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The next step after segmenting markets so a firm can target particular customer groups is to find out what customer groups want and expect.
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True
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Multidimensional scaling involves examining three or more criteria simultaneously in a product-positioning analysis.
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True
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It is never okay for firms to create expectations that exceed the service the firm can or will offer if it will attract customers.
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True
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Besides net profit from operations and the sale of assets, two basic sources of funds for an ongoing enterprise are debt and equity.
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True
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Additional capital is often required for successful strategy implementation.
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True
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In times of depressed stock prices, stock issuances debt may prove to be the most suitable alternative for obtaining capital.
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True
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When performing projected financial analysis, the income statement should be prepared before the balance sheet .
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True
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The cash account is used as the plug figure in projected balance sheets.
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True
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A financial budget is a document that details how funds will be obtained and spent for a specified period of time.
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True
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The most common type of financial budget is the annual budget.
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True
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As a balance sheet entry, goodwill represents when a firms pays more than the book value to purchase another firm.
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True
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It is generally not recommended for companies with less than $10 million in sales to go public.
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True
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Going public means selling off a percentage of your company to other in order to raise capital.
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True
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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.
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True
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A major effort in R may be very risky if technology is changing rapidly and the market is growing slowly.
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True
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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.
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True
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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.
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True
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What level of management is directly affected by strategy implementation?
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Plant managers Sales managers Project managers Division managers
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Which two variables rank as marketing's most important contributions to strategic management?
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Market segmentation and product positioning.
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Why is market segmentation an important variable in strategy implementation?
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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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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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Matching of which factors would allow factories to produce desirable levels without extra shifts, overtime or subcontracting?
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Supply and demand
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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 is not a required step in product positioning?
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Serve two segments with the same strategy
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Multidimensional scaling is used to determine
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product positioning.
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Which of these is not a rule of thumb when using product positioning as a strategy-implementation tool?
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"Try to serve more than one segment with the same strategy."
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In the low earnings period, 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 is the most widely used technique for determining the best combination of debt and stock?
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Earnings per share/earnings before interest and tax analysis
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What becomes a more attractive financing technique when cost of capital is high?
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Stock issuance
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A benefit of using projected balance sheets and income statements is that
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an organization can compute projected financial ratios under various scenarios.
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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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In preparing projected statements, to project cost of goods sold and the expense items in the income statement, which of these methods is recommended?
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Percentage-of-sales method
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Retained earnings is obtained by subtracting
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any dividends to be paid for that year from net income.
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Which of these is the most common type of budgeting time frame?
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Annual
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What is the most common type of financial budget?
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Cash
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Adequate, timely feedback is important to effective strategy evaluation.
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True
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According to Richard Rumelt, consonance and advantage are mostly based on a firm's external assessment.
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True
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Strategy evaluation is becoming increasingly difficult with the passage of time, given technological advances.
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True
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Competitive advantages normally are the result of superiority in one of three areas: resources, skills, or position.
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True
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Strategy evaluation should be performed on a continuous basis rather than at the end of specified periods of time.
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True
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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.
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True
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Specific financial ratios are always used to evaluate strategies.
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True
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Most quantitative evaluation criteria are geared to annual objectives rather than long-term.
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True
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Corrective action in strategy evaluation is necessary to keep an organization on track toward achieving stated objectives.
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True
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According to research, participation in strategy-evaluation activities is one of the best ways to overcome individuals' resistance to change.
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True
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Each year, Fortune publishes strategy evaluation research on both the United States and other countries.
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True
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Timely approximate information is generally more desirable as a basis for strategy evaluation than accurate information that does not depict the present.
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True
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There is no one ideal strategy-evaluation system for all organizations.
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True
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Strategies cannot and should not try to cover all bases by planning for all possible contingencies.
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True
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Identifying both beneficial and unfavorable events that could possibly derail the strategy or strategies is the first step of effective contingency planning.
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True
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Too much emphasis on evaluating strategies may be expensive and counterproductive.
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True
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According to Rumelt, consistency and feasibility are largely based on a firm's internal assessment.
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True
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The decreasing time span for which planning can be done with any degree of certainty is a reason strategy evaluation is more difficult today.
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True
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Regardless of the size of the organization, a certain amount of "management by wandering around" at all levels is essential to effective strategy evaluation.
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True
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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.
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True
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When measuring organizational performance, you need to compare expected results to actual results.
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True
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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.
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True
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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.
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True
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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.
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True
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The basic form of a Balanced Scorecard will vary for different organizations or industries.
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True
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The most admired company in the world in 2009 was Nike.
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True
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The test of an effective evaluation system is its usefulness not its complexity.
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True
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Contingency plans are alternative plans that can be put into effect if certain key events do not occur as expected.
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True
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Contingency plans should be as simple as possible.
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True
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A frequently used tool in strategy evaluation is the audit.
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True
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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.
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True
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GAAP standards comprise 25,000 pages, whereas IFRS standards comprise 5,000 pages.
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True
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Which of these is a basic activity of strategy evaluation?
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Reviewing the underlying internal and external factors that represent the bases of current strategies. Measuring organizational performance. Taking corrective actions.
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All of these are Richard Rumelt's criteria to evaluate a strategy except:
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advantage. consistency. feasibility. (distinctiveness) consonance.
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Which of the following is not a reason for the increasing difficulty of evaluating strategies?
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(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.
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Competitive advantage normally is the result of superiority in resources, skills and
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position.
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If success for one organizational department means failure for another department, then strategies may be
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inconsistent.
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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.
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needed
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A revised ________ should indicate how effective a firm's strategies have been in response to key opportunities and threats.
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EFE matrix
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What is the basis for quantitative financial evaluation?
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Financial ratios
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