Which of the following is NOT descriptive of the threat of substitute products or
services?
A) Substitute products appear to be different, but satisfy the same need as another
product.
B) If the cost of switching is low, substitutes may have a strong effect on an industry.
C) Identifying substitutes is relatively easy since they look similar.
D) Possible substitute products or services may not appear to be easily substitutable.
E) Substitutes limit the potential returns of an industry.
Answer:
Which external growth strategy was demonstrated when Procter & Gamble completely
absorbed Gillette?
A) mergers
B) strategic alliances
C) diversification
D) concentration
E) acquisitions
Answer:
Which one of the following is NOT one of the arguments against social responsibility
as used by economist Milton Friedman?
A) Spending money for social responsibility is spending the stockholder’s money for a
general social interest.
B) Businesses can actually do very little in terms of social responsibility.
C) Spending money on social responsibility is acting from motives other than economic
and may, in the long-run, cause harm to the very society the firm is trying to help.
D) There is one and only one social responsibility of business to use its resources and
engage in activities designed to increase its profits so long as it stays within the rules of
the game.
E) Through taking on the burden of social costs, the organization becomes less efficient,
causing price increases or postponement of growth.
Answer:
An organization which is composed of cells that can operate alone but that can interact
with other cells to produce a more potent and competent business mechanism is referred
to as a(n)
A) reengineered organization.
B) virtual organization.
C) modular organization.
D) network organization.
E) ongoing organization.
Answer:
To get a proper picture of the position of the organization, common-size statements and
ratios should be compared to
A) the organization’s future historical performance.
B) the leading competitor in the industry.
C) the financial performance of the overall U.S. gross domestic production (GDP).
D) the direct competitor least like the organization.
E) industry-wide average trends.
Answer:
The process of taking a new technology from the laboratory to the marketplace is called
A) economies of scope versus operating leverage.
B) the R&D mix.
C) technological competence.
D) technological transfer.
E) technology discontinuity.
Answer:
According to the text, most publicly owned large corporations today tend to have
boards with what degree of involvement in the strategic management process?
A) passive to minimal
B) minimal to nominal
C) rubber stamp type
D) nominal to active
E) active to catalyst
Answer:
Stage III in the organizational life cycle is the
A) birth stage.
B) growth stage.
C) maturity stage.
D) decline stage.
E) death stage.
Answer:
Business strategy is composed of
A) corporate and competitive strategy.
B) functional and divisional strategy.
C) competitive and cooperative strategy.
D) corporate and cooperative strategy.
E) divisional and competitive strategy.
Answer:
A company which keeps up by imitating a leading company’s strategy while ignoring its
own strengths and weaknesses is an example of which strategy to avoid?
A) follow the leader
B) hit another home run
C) arms race
D) do everything
E) losing hand
Answer:
Which of the following is NOT one of the four triggering events listed in the text that
are the stimulus for a strategic change?
A) intervention by the organization’s bank
B) annual strategic planning conference
C) threat of a takeover
D) new CEO
E) awareness by management of decreased profitability
Answer:
All of the following reasons provide rationale for unethical behavior EXCEPT
A) the impact of cultural norms and values.
B) differences in values between business people and key stakeholders.
C) ambiguous rules.
D) agreement among stakeholders and business people about what is ethical.
E) difficulty of one group to understand another’s actions.
Answer:
An agency problem can occur when
A) the desires and objectives of the owners and agents conflict.
B) it is difficult or expensive for the owners to verify what the agent is actually doing.
C) the owners and agents have different attitudes toward risk.
D) executives do not select risky strategies because they fear losing their jobs if the
strategy fails.
E) all of the above
Answer:
As a part of the strategic management process, evaluation and control is concerned with
all of the following, EXCEPT
A) generating feedback to decision makers.
B) monitoring corporate activities and performance.
C) stimulating a review of the corporation’s strategic management.
D) pinpointing problem areas.
E) determining top management benefits packages.
Answer:
Which financial ratio is a measure of the ability of the company to meet all of its
fixed-charge obligations?
A) debt to asset ratio
B) debt to equity ratio
C) times interest earned
D) long-term debt to capital structure
E) coverage of fixed charges
Answer:
According to the text, what percentage of portfolio managers use annual reports when
making decisions?
A) 20%
B) 35%
C) 50%
D) 60%
E) 80%
Answer:
According to the text, one reason environmental uncertainty is a threat to strategic
managers is because
A) it is a costly and time-consuming process.
B) it creates a new playing field in which creativity and innovation can play a major
part in strategic decisions.
C) it forces the strategic manager to be more stable.
D) it hampers their ability to develop long-range plans.
E) there are too many uncontrollable variables.
Answer:
According to the text, assessment centers have been able to accurately predict
subsequent
A) job satisfaction.
B) job performance and career success.
C) organizational commitment.
D) organizational attachment.
E) management longevity.
Answer:
When a company following a differentiation strategy ensures that the higher price it
charges for its higher quality is not priced too far above the price of the competition, the
company is using the process of
A) low-cost differentiation.
B) cost leadership.
C) cost proximity.
D) basic differentiation.
E) price fixing.
Answer:
Which of the following is NOT a responsibility of a research and development
manager?
A) choosing among alternative new technologies to use within the corporation
B) developing methods of embodying the new technology in new products and
processes
C) deploying resources so that the new technology can be successfully implemented
D) taking the design and operationalizing the plan into mass production
E) suggesting and implementing a corporation’s technological strategy in light of its
corporate objectives and policies
Answer:
Which financial indicator measures the ratio of sales to fixed assets?
A) days of inventory
B) asset turnover
C) average collection period
D) fixed asset turnover
E) inventory turnover
Answer:
One company that has successfully found a propitious niche is
A) Coca-Cola.
B) PepsiCo.
C) Frank J. Zamboni & Company.
D) Walmart.
E) Disney.
Answer:
What is the attribute of corporate culture that is the degree to which members of a unit
accept the norms, values, or other culture content associated with the unit?
A) integration
B) strength
C) intensity
D) coordination
E) unity
Answer:
Which of the following is one of the most common reasons given by surveyed
executives for bending the rules to attain their objectives?
A) organizational performance required it
B) rules were too rigid
C) no one will know
D) no oversight
E) all of the above
Answer:
One study reported the percentage of senior executives that left a firm after a new CEO
took office was ________ when the new CEO was an insider and ________ when the
new CEO was an outsider.
A) 35; 10
B) 20; 34
C) 30; 30
D) 20; 10
E) 40; 20
Answer:
Research of the planning practices of companies in the oil industry concludes that the
real value of modern strategic planning is more
A) in the planning.
B) in the strategic thinking and organizational learning.
C) in the resulting written strategic plan.
D) in the formality of the process.
E) in the improved communication within the organization.
Answer:
According to Carroll, the responsibilities that management of a business organization
assumes which are purely voluntary obligations are
A) legal responsibilities.
B) ethical responsibilities.
C) financial responsibilities.
D) economic responsibilities.
E) discretionary responsibilities.
Answer:
Strategic goals can be accomplished through defining an action plan. Which one of the
following is NOT one of the components which make up an action plan?
A) the specific actions to be taken
B) who will perform the action
C) during what time frame the action will be completed
D) where the action will be done
E) what are the expected results of the action
Answer:
The ability of a corporation to shift from one dominant strategy to another is called
A) strategy implementation.
B) chaos formulation.
C) contingency management.
D) logical incrementalism.
E) strategic flexibility.
Answer:
Which one of the following is NOT one of the reasons why many executives do not
conduct long-run performance evaluations while preferring to focus primarily on
short-run performance?
A) They do not realize their importance.
B) They are not personally evaluated on a long-term basis.
C) They believe short-run considerations are more important than long-run
considerations.
D) They do not have the time to make a long-run analysis.
E) They do not believe in strategic planning.
Answer:
When a company exchanges 200 shares of stock worth $20 each for 100 shares worth
$40 each, they are using
A) tracking stock.
B) holding stock.
C) an LBO.
D) reverse stock split.
E) split stock.
Answer: