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On the x-axis of the IE Matrix, an internal factor evaluation score of 2.5 represents a weak internal position. More time and effort are required to identify and evaluate external trends and events in domestic corporations than in multinational ones. […]

At Google the culture is very rigid, while in contrast the culture at Proctor & Gamble is very informal. The firm should pursue conservative strategies if the coordinates of a SPACE directional vector are (-1, +4). Answer: TRUE Time spent […]

In strategy evaluation, a revised IFE matrix should indicate how effective a firm’s strategies have been in response to key opportunities and threats. Conservative strategies in a SPACE Matrix most often include product development, market development, market penetration and related […]

An organization’s culture compares to an individual’s personality in the sense that no two organizations have the same culture and no two individuals have the same personality. In most cases, at least 500 words are required to effectively state a […]

A forward integration strategy is used by firms to gain control or ownership of suppliers. It is always easier to say you are going to do something (strategy formulation) than to actually do it (strategy implementation). Answer: TRUE The firm […]

Mass communication and high technology have led to highly individualized and distinct patterns of consumption in diverse cultures worldwide. When developing an organizational chart, the title president should be reserved fo the top executive of the firm. Answer: FALSE A […]

The SWOT matrix is widely used as an organizational tool and, if used appropriately, does not have any limitations. Measuring organizational performance requires making changes to reposition a firm competitively for the future. Answer: FALSE The acquisition of security-software company […]

An organization’s present strategies, objectives and mission provide a basis for generating and evaluating feasible alternative strategies, coupled with the external and internal audit information. Marketing research is the systematic gathering, recording and analyzing, of data about problems relating to […]

One of the fundamental strategy evaluation activities is reviewing external and internal factors that are the bases for current strategies. Segmentation often reveals that large, random fluctuations in demand actually consist of several small, predictable, and manageable patterns. Answer: TRUE […]

Regardless of the size of the organization, a certain amount of “management by wandering around” at all levels is essential to effective strategy evaluation. Leverage ratios measure a firm’s ability to meet maturing short-term obligations. Answer: FALSE Stars, Question Marks, […]

According to research, a healthier workforce can more effectively and efficiently implement strategies. A current trend in R&D management involves the lifting of the veil of secrecy whereby firms, even major competitors, are joining forces to develop new products. Answer: […]

A firm can usually serve two or more market segments with the same strategy. According to a study by the Institute of Business Ethics, companies that do not display ethical conduct consistently outperform companies that show a clear commitment to […]

Most traditional retailers have tried in vain to use their online sales to boost in-store sales. Wild guesses should never be part of the planning process. Answer: TRUE Keeping informed about the number and the nature of competitors is easier […]

JIT significantly increases the costs of implementing strategies. After decades of debate and struggle, firms have finally definitively determined the appropriate social policies. Answer: FALSE External audits attempt to identify key variables that offer actionable responses. Answer: TRUE Orphan drugs […]

The ISO 14000 family of standards concerns the extent to which a firm minimizes harmful effects on the environment caused by its activities and continually monitors and improves its own environmental performance. Mission statements cannot be stated with too high […]

Protectionism refers to countries imposing tariffs, taxes, and regulations on firms outside the country to favor their own companies and people. Strategies may be inconsistent if policy problems and issues continue to be brought to the top for resolution. Answer: […]

The controlling function of management is synonymous with strategy formulation. Having a code of ethics ensures ethical business behavior. Answer: FALSE Whenever two firms merge, it becomes especially important to evaluate and consider culture-strategies linkages. Answer: TRUE Primary responsibility for […]

To objectively evaluate feasible alternative strategies identified in Stage 2, the QSPM uses input information derived from Stage 1. The focus of restructuring is changing the way work is actually carried out. Answer: FALSE It is unusual for the claims […]

White knight is a term that refers to a firm that agrees to acquire another firm when the other firm is facing a hostile takeover by some company. A differentiation strategy can be especially attractive when the industry has many […]

Honda Motor, long considered the industry’s fastest producer, fills a buyer’s new car order in just 5 days. Although bankruptcy can be an effective type of retrenchment strategy, it does not allow firms to avoid major debt obligations and to […]

Mexican workers expect and desire a work environment in which self-expression and initiative are encouraged. Successful strategy formulation generally rests upon the ability of an organization to sell some product or service. Answer: FALSE Vision and mission statements can often […]

Firms can be more proactive with strategic management. Application of the strategic-management process is typically more formal in larger and well-established organizations. Answer: TRUE The work/family issue is strictly a women’s issue. Answer: FALSE Although growth in revenues and profits […]

A form of customer analysis is administering customer surveys. Organizing is the cornerstone of effective strategy formulation. Answer: FALSE It is an exaggeration to say that in an industry that is global, the riskiest possible posture is to remain a […]

A force change strategy is plagued by low commitment and high resistance. Business ethics can be defined as principles of conduct within organizations that guide decision making and behavior. Answer: TRUE Corporate social policy should be designed and articulated during […]

The most effective strategic management is ritualistic, predictable and formal. Perhaps the greatest advantage of international operations to a firm is the ability to gain new customers for its products and services, thus increasing revenues. Answer: TRUE Sustainability reports reveal […]

Cash Cows represent the organization’s best long-run opportunities for growth and profitability. Resource allocation is included in strategy-formulation activities. Answer: TRUE Most companies favor related diversification strategies in order to exploit common use of a well-known brand name. Answer: TRUE […]

The only costs involved in going public are the initial costs. Foreign banks currently operate and compete in most parts of the United States. Answer: FALSE Five major categories of external variables are: 1) economic forces, 2) social, cultural, demographic, […]

The U.S. furniture manufacturing industry is not yet greatly challenged by foreign competitors. 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, […]

The midpoint on the x-axis of a BCG Matrix is typically set at 0.05. The BCG Matrix requires more information about the divisions than the IE Matrix. Answer: FALSE Europeans are especially motivated by pay-for-performance, commission salaries, and objective measurement […]

According to Peter Drucker, developing a clear business vision and mission is the first responsibility of strategists. Political forecasts can be the most important part of an external audit for firms that depend heavily on government contracts. Answer: TRUE The […]

Geographic distance and cultural differences are two of the factors that can make communication between domestic headquarters and overseas operations difficult. Strategists in multinational corporations are often confronted with the need to be globally competitive and nationally responsive at the […]

“If it ain’t broke, don’t fix it” refers to managing by crisis. 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 […]

The critical success factors in a Competitive Profile Matrix are often the same as those in an EFE Matrix. In multidivisional organizations, each division should develop a mission statement consistent with and supportive of the corporate mission. Answer: TRUE According […]

The most dramatic new market-segmentation strategy is the targeting of regional tastes. A new trend with regard to advertising products or services on the Internet is to base advertising rates solely on sales rates. Answer: TRUE Sustainability refers to the […]

The drive to improve the efficiency of global business operations is leading to lesser functional specialization. Reengineering does not usually affect the organizational structure or chart, nor does it imply job loss or employee layoffs. Answer: TRUE Both military and […]

The element of surprise provides great competitive advantages in both military and business strategy. Additional capital is often required for successful strategy implementation. Answer: TRUE Retrenchment and turnaround are the same strategy. Answer: TRUE The middle manager is the most […]

Horizontal integration is seeking ownership or increased control over competitors. Policies refer to specific guidelines, methods, procedures, rules, forms, and administrative practices established to support and encourage work toward stated goals. Answer: TRUE The rational change strategy is one that […]

As long as the price and quality of a firm’s products and services are competitive on a local basis, they have nothing to worry about. IFRS standards comprise 25,000 pages, whereas GAAP standards comprise 5,000 pages. Answer: FALSE To determine […]

Four common approaches to determine R&D budget allocations are: 1) finance as many project proposals as possible; 2) use a percentage-of-sales method; 3) budget for R&D about what competitors spend; or 4) decide how many successful new products are needed […]

People’s anxieties are raised with the thought of change because they fear economic loss, inconvenience, uncertainty and a break in normal social patterns. AT&T’s mission statement focuses on telephones rather than on communication. Answer: FALSE Firms, like organisms, must be […]

Most firms warn managers and employees that reporting an ethical violation by others, also known as whistle-blowing, could cause them to be discharged. Increased costs are a disadvantage of a good information system. Answer: FALSE Although a firm’s power and […]

McDonalds currently owns more than 50 percent of its restaurants. Royal Dutch Shell PLC and several other companies recently paid a combined $236 million settlement due to allegations that they bribed foreign officials. Answer: TRUE Organizations that conduct business operations […]

An important question a mission statement should answer is, “What do we want to become?” Having no temporal qualities, the BCG Matrix is a snapshot of an organization at a given point in time. Answer: TRUE Industry analysis is also […]

Well-conceived and properly executed mission and vision statements do not need to be subject to revision. The I/O approach to competitive advantage advocates that internal factors are more important than external factors in a firm achieving competitive advantage. Answer: FALSE […]

Franchising is an effective means of implementing forward integration. Constructing an Internal Factor Evaluation Matrix is a summary step when conducting an internal strategic-management audit. Answer: TRUE As a balance sheet entry, goodwill represents the favor a business has acquired […]

In the face of a deepening global recession, countries worldwide are resorting to protectionism to safeguard their own industries. To see and appreciate the world from the perspective of others has become a matter of survival for business. Answer: TRUE […]

Changes in the organization’s management, marketing, finance/accounting, production/operations, R&D, and MIS strengths and weaknesses should all be the focus of a revised EFE matrix in strategy evaluation. Successful strategists minimize their own political exposure on issues that are highly controversial […]

The first step in the process of developing a mission statement is to ask all participants to prepare what they believe the organization’s mission should be. The operating philosophy of organizations should be to develop a product and then try […]

The Sarbanes-Oxley Act of 2002 has eliminated the problem of firms inflating their financial projections, so stakeholders need not worry about the financial projections of different companies. Strategic management is an attempt to organize qualitative and quantitative information in a […]

Divestiture is selling all of a company’s assets, in parts, for their tangible worth. The tactic of focusing on higher-order issues involves recognizing that it is often possible to achieve similar results using different means or paths. Answer: FALSE The […]

Corporate social policy should be reaffirmed or changed during strategy implementation. Unlike strategy formulation, strategy implementation varies considerably among different types and sizes of organizations. Answer: TRUE The only reasons businesses have for determining their worth is preparing to be […]

Remaining solely domestic is an increasingly safer strategy for U.S. companies. While outsourcing manufacturing, tech support, and back-office work is quite common, it is still unheard of for companies to outsource product design. Answer: FALSE For a resource to be […]

According to Campbell and Yeung, an organization’s vision is associated with behavior and with the present. Deutsche Bank’s entrance into the casino business in Las Vegas is an example of related diversification. Answer: FALSE The size of the circle in […]

With market segmentation, a firm can better operate with limited resources. Established companies are coming to realize that their next generation of potential customers spends more time online than watching TV. Answer: TRUE Even though useful, strategic planning has been […]

Alternative-energy firms are struggling to find new customers, since the federal stimulus package failed to include adding alternative-energy infrastructure. The trend toward an older America is bad news for restaurants, hotels, airlines and home builders. Answer: FALSE For consumers who […]

Each year, Fortune publishes strategy-evaluation research on both the United States and other countries. In a multidivisional firm, objectives should be established for the overall company but not for each division. Answer: FALSE Only 15 percent of formulated strategies are […]

Motor vehicle firms in the United States are vulnerable when the value of the dollar falls. Optimizing for tomorrow the trends of today is the purpose of strategic management. Answer: FALSE Financial ratios are rarely used as criteria to evaluate […]

The first step for using Porter’s Five-Forces Model is to evaluate the relative strength of each competitive force. Economic factors do not have much impact on the attractiveness of strategies. Answer: FALSE To say U.S. firms are being challenged in […]

Divestiture is the selling of all of a company’s assets, in parts, for their tangible worth. Though China has more than 1.3 billion residents, the middle class segment that is able to buy goods and services is rapidly shrinking. Answer: […]

Culture includes the set of shared values, beliefs, attitudes, customs, norms, personalities, heroes, and heroines that describe a firm. Organizations never develop their own projections. Answer: FALSE Making many intuitive decisions that conflict with the formal plan is one pitfall […]

Besides reducing worker alienation and stimulating productivity, ESOPs allow firms other benefits, such as substantial tax savings. Most producers today sell their goods directly to consumers. Answer: FALSE Return on assets is the most widely used technique for determining whether […]

Bargaining power of consumers is usually the most powerful of Porter’s five competitive forces. The most admired electronics company in 2011 was Tyco International. Answer: FALSE According to King and Cleland, carefully developed and written mission statements ensure unanimity of […]

When performing projected financial analysis, the balance sheet should be prepared before the income statement. By 2075, the United States will have no racial or ethnic majority. Answer: TRUE Major competitors’ strengths may represent key threats. Answer: TRUE Good ethics […]

While it is socially responsible to be a good steward of the natural environment, doing so will not enable a firm to gain competitive advantage. In the last five years, the position of chief strategy officer (CSO) has diminished in […]