question

Once a firm acquires a competitive advantage, they are usually able to sustain the competitive advantage for an extended period of time.

answer

False

question

Newspaper companies in the United States provide a good example of how a company can sustain a competitive advantage over the long term.

answer

False

question

In order for a firm to achieve sustained competitive advantage, a firm must continually adapt to changes in external trends and events and effectively formulate, implement, and evaluate strategies that capitalize upon those factors.

answer

True

question

A vision statement answers the question, "What is our business?," whereas a mission statement answers, "What do we want to become?"

answer

False

question

Identifying an organization's existing vision, mission, objectives and strategies is the final step for the strategic management process.

answer

False

question

The poor reward structure is one reason managers do not engage in strategic planning.

answer

True

question

Strategic-management must be a self-reflective learning process that familiarizes managers and employees in the organization with key strategic issues and feasible alternatives for resolving those issues.

answer

True

question

Today, managers and employees can be found personally liable if they ignore, conceal, or disregard a pollution problem.

answer

True

question

Nonprofit organizations have less need for strategic management because they are not interested in making a profit.

answer

False

question

What is a theme that has become a more important strategic issue due to global warming, bioterrorism, and increased pollution?

answer

External environment

question

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?

answer

Strategic management

question

During what stage of strategic management are a firm's specific internal strengths and weaknesses determined?

answer

Formulation

question

What types of skills are especially critical for successful strategy implementation?

answer

Interpersonal

question

Which individuals are most responsible for the success and failure of an organization?

answer

Strategists

question

A mission statement, sometimes called a creed statement, can be defined as an "enduring statement of purpose that distinguishes one organization from other similar enterprises."

answer

True

question

There is no need for a mission statement in small, nonprofit organizations.

answer

False

question

An important question a mission statement should answer is, "What do we want to become?"

answer

False

question

When developing a mission statement, it is usually advisable to involve as few managers as possible.

answer

False

question

The most important time for a company to develop a mission and vision statement is when the company is experiencing financial difficulty.

answer

False

question

A firms concern for employees in a mission addresses the question, "Is the firm responsive to social, community, and environmental concerns?"

answer

True

question

The vision and mission statement can often be found

answer

in annual reports.

question

Which of these basic questions should a vision statement answer?

answer

What do we want to become?

question

The ideal length of a vision statement is:

answer

One sentence

question

Who is referred to as "the father of modern management?"

answer

Drucker

question

The mission statement answers which question?

answer

What is our business?

question

What is the best time to re-visit a mission statement?

answer

When the firm is successful

question

The three characteristics of a mission statement are a declaration of attitude, a declaration of social policy and:

answer

a customer orientation

question

To perform an external audit, a company first must gather competitive intelligence and information about social, cultural, demographic, environmental, economic, political, legal, governmental, technological, and global trends

answer

True

question

Motor vehicle firms in the United States are vulnerable when the value of the dollar falls.

answer

False

question

A low value of the dollar means lower exports and higher imports.

answer

False

question

The United States is getting older and less Caucasian.

answer

True

question

Political forecasts can be the most important part of an external audit for firms that depend heavily on government contracts.

answer

True

question

Internal opportunities can be represented by major competitors' weaknesses.

answer

False

question

Competitive intelligence is not considered corporate espionage because 95 percent of the information a company needs to make strategic decisions is available and accessible to the public.

answer

True

question

Because companies are fearful of corporate espionage, cooperative agreements between competitors are becoming less popular.

answer

False

question

According to Michael Porter, five competitive forces create vital opportunities and threats to organizations: (1) new entrants, (2) substitute products or services, (3) bargaining power of suppliers, (4) bargaining power of buyers, and (5) rivalry among existing firms.

answer

True

question

Rampant corruption and the absence of a democratically established legal system are risks that still restrain firms from initiating business with China.

answer

True

question

In 2006, china produced more automobiles than Germany.

answer

True

question

__________ is not part of an external audit.

answer

Analyzing financial ratios

question

To perform an external audit, a company first must:

answer

Gather competitive intelligence and information about external trends

question

The I/O approach to competitive advantage advocates that external factors are ________ internal factors in a firm achieving competitive advantage.

answer

More important than

question

It is predicted that the United States will have how many racial or ethnic majorities by the year 2075?

answer

None

question

Who are the world's longest-living people?

answer

China

question

When an industry relies heavily on government contracts, which forecasts can be the most important part of an external audit.

answer

Political

question

Who is Japan's largest trading partner

answer

China

question

Technological advancements can create new ______ advantages that are more powerful than existing advantages.

answer

Competitive

question

Which of the following is not a characteristic that describes the most competitive companies in America?

answer

Divestiture is essential to growth

question

What is not one of Michael Porter's five competitive forces?

answer

Bargaining power of unions

question

According to Porter, what is usually the most powerful of the five competitive forces?

answer

Rivalry among competing firms

question

The process of performing an internal audit, compared to the external audit, provides more opportunity for participants to understand how their jobs, departments and divisions fit into the whole organization.

answer

True

question

Proponents of the resource-based view argue that external factors are more important than internal factors for a firm in achieving and sustaining competitive advantage

answer

False

question

In China, business behaviors revolve around guanxi, or personal relations.

answer

True

question

In China, to show that you enjoyed your meal, you should completely finish your food.

answer

False

question

Punctuality, in general, is revered in all cultures of the world.

answer

False

question

The only certain thing about the future of any organization is change.

answer

True

question

There are seven basic functions of marketing: customer analysis, selling, product and service planning, pricing, distribution, marketing research and opportunity analysis.

answer

True

question

Financial ratios are not applicable to nonprofit organizations.

answer

False

question

A limitation of financial ratios is the fact that they are based on accounting data.

answer

True

question

A firm's strengths that cannot be easily matched or imitated by competitors are called

answer

distinctive or core competencies

question

The internal resource categories used in the resource-based approach are physical resources, human resources and....

answer

Organizational resources

question

Organizational resources include all of the following except:

answer

Employee training

question

Which of the following is not a cultural product?

answer

Emotions

question

Which management function includes breaking tasks into jobs, combining jobs to form departments and delegating authority?

answer

Organizing

question

All of the following are key questions that can reveal internal strengths and weaknesses in the management department except:

answer

Are the organization's products positioned well among competing products?

question

What category of ratios measures a firm's ability to meet maturing short-term obligations?

answer

Liquidity

question

What category of ratios includes return on total assets and return on stockholders' equity?

answer

Profitability

question

Which ratio would be considered an activity ratio?

answer

Average collection period

question

Which country has the highest average hourly pay for auto workers?

answer

Germany

question

Where is the largest seaport, in terms of ship container traffic processed annually?

answer

Singapore

question

__________ become(s) __________ only when they are evaluated, filtered, condensed, analyzed and organized for a specific purpose, problem, individual, or time.

answer

Data; information

question

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

answer

Value chain analysis

question

The initial step to implementing value chain analysis is

answer

dividing a firm's operations into specific activities or business processes.

question

The overall aim of the Balanced Scorecard is to balance financial objectives with strategic objectives.

answer

False

question

Horizontal integration is seeking ownership or increased control over competitors.

answer

True

question

Gaining ownership or increased control over distributors or retailers is called forward integration strategy.

answer

True

question

Forward integration strategy is especially effective when the availability of quality distributors is so limited as to offer a competitive advantage to those firms that integrate forward.

answer

True

question

A strategy of seeking ownership or increased control of a firm's supplier is backward integration.

answer

True

question

If a firm's present suppliers are expensive and unreliable in meeting the firm's needs for parts, components and/or raw materials, the firm should pursue a Backward integration strategy.

answer

True

question

Market development includes introducing present products into new geographic areas.

answer

True

question

Most companies favor related diversification strategies in order to exploit common use of a well-known brand name.

answer

True

question

AT&T's acquisition of BellSouth in 2007 was the largest telecommunications acquisition ever approved in the U.S.

answer

True

question

Unrelated diversification is an appropriate strategy when an organization's present channels of distribution can be used to market the new products to current customers.

answer

True

question

Morgan Stanley's building of a casino in Atlantic City is a good example of related diversification.

answer

False

question

All of the following are important factors in the Balanced Scorecard except:

answer

stockholder equity

question

Southwest Airlines selling tickets through Galileo is an example of which type of strategy?

answer

Forward integration

question

Whirlpool selling its struggling Hover floor-care business to Techtronic Industries is an example of which type of strategy?

answer

Divestiture

question

Burger King opening its first restaurant in Japan is an example of which type of strategy?

answer

Market Development

question

Web sites to sell products directly to consumers are examples of which type of strategy?

answer

Forward integration

question

In which situation would horizontal integration be an especially effective strategy?

answer

When an organization can gain monopolistic characteristics in a particular area or region without being challenged by the federal government for "tending substantially" to reduce competition.

question

When a domestic company first begins to export to India, it is an example of:

answer

Market Development

question

Nortel cutting another 2,900 jobs in 2007 in an attempt to stay in business would be an example of:

answer

Retrenchment

question

What kind of strategy is retrenchment?

answer

A turnaround or reorganization strategy

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

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

answer

True

question

In a BCG Matrix the pie slice indicates the proportion of corporate profits generated by that division.

answer

True

question

Cash cows represent the organization's best long-run opportunities for growth and profitability.

answer

False

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

Viewing businesses as star, cash cow, dog or question mark is an oversimplification.

answer

True

question

Culture includes the set of shared values, beliefs, attitudes, customs, norms, personalities, heroes and heroines that describe a firm.

answer

True

question

Whenever two firms merge, it becomes especially important to evaluate and consider culture-strategies linkages.

answer

True

question

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

answer

True

question

The Sarbanes-Oxley Act put an end to the "country-club" atmosphere of most boards and has shifted power from CEOs to directors.

answer

True

question

What type of strategy would divestiture be classified as?

answer

Defensive

question

For what type of company is the BCG Matrix ideal for analyzing?

answer

Companies with more than one division

question

In the BCG Matrix, which element represents the industry growth rate in sales, measured in percentage terms?

answer

Y-Axis

question

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

answer

Question Mark

question

Which strategy would be most appropriate for a company classified as a Dog?

answer

Retrenchment

question

According to the Grand Strategy Matrix, which strategy is recommended for a firm with rapid market growth and a strong competitive position?

answer

Market Penetration

question

The act of oversight and direction for an organization is referred to as

answer

Goverance

question

All of the following are principles of good organizational governance, as established by Business Week, except:

answer

At least two directors are current or former company executives.

question

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

answer

True

question

Four types of resources that can be used to achieve desired objectives are financial, physical, human and technological.

answer

True

question

Avoidance, infusion and confrontation are the classifications for the various approaches for minimizing and resolving conflict.

answer

False

question

Most large companies have abandoned the functional structure in favor of decentralization.

answer

True

question

Managing as if 'the earth matters' requires an understanding of how international trade, competitiveness and global resources are connected.

answer

True

question

The United States leads the world in promoting women and minorities into mid- and top-level managerial positions in business.

answer

True

question

Which of these is true about strategy implementation?

answer

It is primarily an operational process.

question

Considerable time and effort should be devoted to assuring objectives are well conceived because they represent the basis for

answer

All of the above (monitoring processes, establishing divisional priorities, allocating resources, evaluating managers)

question

Which of the following issues may not require a management policy?

answer

To increase motivation

question

Which approach for managing and resolving conflict involves playing down differences between conflicting parties while accentuating similarities and common interests?

answer

Diffusion

question

What type of organizational structure do most small businesses follow?

answer

Functional structure

question

Which organizational structure is the most simple and inexpensive?

answer

Functional

question

Restructuring is also referred to as

answer

Delayering

question

Which of these involves comparing a firm against the best firms in the industry on a wide variety of performance-related criteria?

answer

Benchmarking

question

The primary benefit sought from restructuring is

answer

Cost reduction

question

Resistance to change can manifest itself through

answer

All of the above (Absenteeism, sabotaging production machines, filing unfounded grievances, and an unwillingness to cooperate

question

What percent of strategies formulated are successfully implemented?

answer

Less than 10 percent

question

Which two variables are of central importance to strategy implementation?

answer

Market segmentation and product positioning

question

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

answer

Stock issuance

question

What is a drawback of using only equity to raise capital?

answer

Dilution of the control of the company

question

A good information system can allow a firm to

answer

Reduce costs

question

Which of these is/are a basic activity of strategy evaluation?

answer

All of the above (Reviewing the underlying internal and external factors that represent the bases of current strategies , measuring organizational performance, taking corrective actions)

question

What is the cornerstone of effective strategy evaluation?

answer

Adequate and timely feedback

question

Strategy evaluation is based on

answer

Qualitative and quantitative criteria

question

Which of the following is not a component of the Balanced Scorecard?

answer

Social responsibility

question

Sustainability refers to the extent that an organization's operations and actions _______ the natural environment.

answer

All of the above (Protect, mend, preserve, reflect good stewardship of)

question

are the individuals primarily responsible for ensuring that high ethical principles are espoused and practiced in an organization.

answer

Strategists such as CEOs and business owners

question

All of the following business actions are considered to be unethical except:

answer

Preventing environmental harm

question

Unethical activities that plague online commerce include all of the following except:

answer

inappropriate gifts

question

A code of business ethics is

answer

A document that provides behavioral guidelines that cover daily activities and decisions within an organization

question

Ethics training programs should contain which of the following?

answer

Messages from the CEO or business owner emphasizing ethical business practices, The development and discussion of codes of ethics, Procedures for discussing unethical behavior, Procedures for reporting unethical behavior (All of the above)

question

According to a recent Wall Street Journal article, _______ percent of all firms sampled had no restrictions on boss-subordinate love affairs at work.

answer

5

question

According to the text, the first social responsibility of any business is to

answer

Make enough profit to cover the costs of the future, because if this is not achieved then no other social responsibility can be met

question

Which state generates the greatest number of megawatts of wind power?

answer

Texas

question

In an industry that is, or is rapidly becoming global, the riskiest possible posture is to

answer

Remain a domestic competitor

question

The _______ opportunities and threats that face a multinational corporation are almost limitless.

answer

Social, cultural, governmental, political (all of the above)

question

Communication between domestic headquarters and overseas operations is often made difficult by

answer

? Geographic distance, cultural differences, variations in business practices, national differences (all of the above)

question

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.

answer

Joint ventures

question

Strengths of competitors in foreign lands are often _______, and weaknesses are often _______.

answer

underestimated; overestimated

question

Protectionism involves countries doing all of the following except:

answer

Liberalizing restrictions on the import of foreign goods

question

In China, pirated goods such as _______ can be purchased for a fraction of their actual prices on many streets.

answer

Nike running shoes, new Hollywood movies on DVD, Microsoft software, handbags (all of the above)

question

China's counterfeit trade practices contribute to an annual bilateral trade deficit of about _______ with the United States.

answer

$250 billion

question

Americans place an exceptionally high priority on _______ whereas many foreigners place more worth on _______.

answer

time; relationships

question

Which of the following nations has the highest corporate tax rate?

answer

United States

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