Once the best strategic alternative is selected, the broad guidelines for its
implementation are then defined by
A) trade-offs.
B) policies.
C) procedures.
D) resource allocation.
E) strategic options.
Answer:
Which financial indicator is calculated by the ratio of market price per share to earnings
per share?
A) return on investment
B) price/earnings ratio
C) return on equity
D) dividend yield on common stock
E) dividend payout ratio
Answer:
The New York Stock Exchange (NYSE) requires corporations to have
A) a majority of the board be outsiders.
B) cumulative voting.
C) at least one employee director as a representative on the board.
D) at least two outside directors providing stockholder representation.
E) an audit committee composed entirely of independent, outside members.
Answer:
In the Boston Consulting Group’s Growth Share Matrix, the relative competitive
position of a product or division is defined as
A) its market share.
B) its gross sales divided by its market share.
C) its market share multiplied by that of its nearest competitor.
D) its market share divided by that of the smallest other competitor.
E) its market share divided by that of the largest other competitor.
Answer:
What benefit does converting sales and profits to constant dollars in times of inflation
offer when analyzing a case?
A) It is helpful in predicting the future potential of the organization.
B) It contributes to determining the risk factors when computing the Z-value.
C) It shows the true performance of the corporation adjusted for inflation to make them
comparable over years.
D) It is easier for the financial analyst to judge the effectiveness of management’s
decision making.
E) It provides a method which is familiar and easy to understand.
Answer:
Who said that the social responsibility of business is a “fundamentally subversive
doctrine” and that the one social responsibility of business is “to use its resources and
engage in activities designed to increase its profits so long as it stays within the rules of
the game…”?
A) Adam Smith
B) Edward Freeman
C) Archie Carroll
D) William C. Norris
E) Milton Friedman
Answer:
Which theory proposes that once an organization is successfully established in a
particular environmental niche, it is unable to adapt to changing conditions?
A) population ecology
B) institution
C) citizenship
D) strategic choice
E) organizational learning
Answer:
Which of the following provides an example of a transformational leader?
A) Phil Knight at Nike has energized his corporation and commanded respect.
B) Louis Gerstner proposed a new vision for IBM to change its business model from
computer hardware to services.
C) Microsoft CEO, Steve Ballmer, crawled under tables to plug in PC monitors and
diagnosed problems with an operating system.
D) Verizon Communications CEO Ivan Seidenberg showed his faith in his people by
letting his key managers handle important projects and represent the company in public
forums.
E) all of the above
Answer:
If performance data and activity reports indicate undesirable performance as a result of
inappropriate use of the strategic management process, operational managers must
A) immediately notify the board of directors.
B) change the strategic management model.
C) know about it so that they can correct the employee activity.
D) allow sufficient time to pass to verify if it is the process or just the usage that is the
problem.
E) check the performance data to ensure their accuracy and take two more
measurements.
Answer:
The mode of strategic decision making typical of most universities, many large
hospitals, a large number of governmental agencies, and a surprising number of large
corporations is
A) adaptive.
B) entrepreneurial.
C) logical incrementalism.
D) planning.
E) none of the above
Answer:
The average large, publicly held U.S. corporation has around
A) 7 directors.
B) 10 directors.
C) 19 directors.
D) 25 directors.
E) 30 directors.
Answer:
According to the American Society of Training and Development, the average annual
expenditure per employee on corporate training and development is
A) $0.
B) $362.
C) $748.
D) $1,182.
E) $2,361.
Answer:
In a fragmented industry
A) no firm has large market share.
B) prices drop as new competitors enter the market.
C) economies of scale are used to reduce costs.
D) companies integrate to further reduce costs.
E) all of the above
Answer:
Which of the following statements is true concerning the career life cycle for top
executives?
A) During the early years of executives’ tenures, they tend to experiment extensively
with product lines to learn about their business.
B) It is possible that a current CEO may not be appropriate to implement a new
strategy.
C) The harvest stage occurs when executives’ accumulated knowledge allows them to
reduce experimentation and increase performance.
D) There is an inverted U-shaped relationship between top executive tenure and the
firm’s financial performance.
E) all of the above
Answer:
The Growth Share Matrix of the Boston Consulting Group suggests that the excess cash
being generated by cash cows should be used to fund
A) dogs.
B) question marks.
C) stars.
D) white knights.
E) fish.
Answer:
Canada, the United States, and Mexico are affiliated economically under which trade
alliance?
A) ASEAN
B) Mercosur
C) EU
D) NAFTA
E) CAFTA
Answer:
The approach to ethical behavior which proposes that actions and plans should be
judged by their consequences, thus producing the greatest benefit to society with the
least harm or the lowest cost is called
A) individual rights approach.
B) mercantilism approach.
C) utilitarian approach.
D) justice approach.
E) moral imperialism approach.
Answer:
Law is defined as
A) formal codes that permit or forbid certain behaviors.
B) a general rule of conduct of personal behavior, based on religious or philosophical
grounds.
C) consensually accepted standards of behavior for an occupation, trade, or profession.
D) imposing one’s morality upon another.
E) voluntary obligations assumed by an individual or organization.
Answer:
Industry analysis is primarily concerned with a corporation’s
A) societal environment.
B) task environment.
C) sociocultural environment.
D) economic environment.
E) internal environment.
Answer:
________ theory argues that senior executives over time tend to view the corporation as
an extension of themselves.
A) Population ecology
B) Motivation
C) Stewardship
D) Agency
E) Goal setting
Answer:
Research reveals that the likelihood of a firm engaging in illegal behavior or being sued
declines
A) with a larger board.
B) with the addition of insiders on the board.
C) with the addition of outsiders on the board.
D) with a smaller board.
E) with a well-compensated board.
Answer:
According to a survey of 156 large corporations, in what percentage of the firms were
strategies first proposed in business units and then sent to headquarters for approval?
A) 10%
B) 36%
C) 50%
D) 66%
E) 96%
Answer:
Which one of the following is an example of a narrow scope in a mission?
A) transportation (vs. railroads)
B) computers (vs. office equipment)
C) health care (vs. hospitals)
D) real estate (vs. apartments)
E) telecommunications (vs. television)
Answer:
Which is the largest of the current U.S. generations?
A) Baby Boomers
B) Woofies
C) Silent Generation
D) Gen X
E) Gen Y
Answer:
According to Hofstede, which cultural dimension describes the extent to which a
society emphasizes the importance of hard work, education, and persistence as well as
the importance of thrift?
A) uncertainty avoidance
B) masculinity-femininity
C) individualism-collectivism
D) long-term orientation
E) power distance
Answer:
When P&G, Kimberly-Clark, and Scott Paper compete with each other in varying
combinations of consumer paper products, they are said to be engaging in
A) oligopolistic competition.
B) strategic competition.
C) multipoint competition.
D) laissez-faire competition.
E) horizontal competition.
Answer:
“When in Rome, do as the Romans do” reflects which type of moral relativism?
A) naive relativism
B) role relativism
C) principled relativism
D) cultural relativism
E) social group relativism
Answer:
One ground rule necessary for effective brainstorming is
A) scrutinize each idea generated.
B) propose ideas without mentally screening them.
C) calculating future earnings of each idea.
D) critique each idea for rationality.
E) forecast the success of each idea.
Answer:
Which type of pricing takes advantage of the demand curve while the product is still
novel and competitors are few to increase profits?
A) demand pricing
B) skim pricing
C) competitive pricing
D) penetration pricing
E) loss-leader pricing
Answer:
What term refers to the study of individual tasks in an attempt to make them more
relevant to the company and to the employee(s)?
A) position matching
B) functional duties
C) job design
D) task conversion
E) responsibility shift
Answer:
Which environment was generally perceived by business people to be something to
exploit, not conserve until the twentieth century?
A) the task environment
B) the natural environment
C) the internal environment
D) the societal environment
E) the external environment
Answer:
The rate at which a firm’s underlying resources, capabilities, or core competencies can
be duplicated by others is called
A) replicability.
B) transparency.
C) imitability.
D) durability.
E) transferability.
Answer:
The Strategic Management Model presents the following process of strategy
formulation:
A) Objectives Policies Strategies Mission.
B) Mission Policies Strategies Objectives.
C) Policies Mission Strategies Objectives.
D) Policies Strategies Objectives Mission.
E) Mission Objectives Strategies Policies.
Answer:
According to Cavanagh, using the ________ criterion, to determine if padding an
expense account is ethical or not, one would ask if it optimizes the satisfactions of all
stakeholders.
A) morality
B) utility
C) rights
D) justice
E) relativism
Answer:
A multinational corporation
A) is synonymous with an international corporation.
B) has limited involvement through the world.
C) has a worldwide perspective in its decision making.
D) has limited perspective in its management.
E) manages worldwide operations as if they were independent.
Answer: