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.
Although a useful step in the strategic management process, value chain analysis does
little to help a firm monitor whether its prices and costs are competitive.
All firms have a strategy, even if it is informal, unstructured, and sporadic.
A mission statement is a declaration of an organization’s reason for being.
American firms that seem insulated from foreign competition today may be vulnerable
tomorrow.
CEOs and business owners delegate the responsibility for ensuring that high ethical
principles are espoused and practiced in an organization.
Desire for ________ is a part of the social fabric in worker-manager relations in
Mexico.
A) harmony
B) friction
C) conflict
D) independence
E) punctuality
Integration strategies are sometimes collectively referred to as which of the following
categories of strategies?
A) Horizontal integration
B) Diversification
C) Vertical integration
D) Stuck-in-the-middle
E) Hierarchical integration
Today McDonald’s owns about _______ percent of its 32,800 restaurants.
A) 20
B) 30
C) 40
D) 50
E) 60
Which of the following is NOT a guideline for when an organization should use an
unrelated diversification strategy?
A) when revenues derived from an organization’s current products or services would
increase significantly by adding the new unrelated, products
B) when an organization’s present channels of distribution can be used to market the
new products to current customers
C) when the new products have countercyclical sales patterns compared to an
organization’s present products
D) when an organization competes in a highly competitive and/or a no-growth industry
E) when existing markets for an organization’s present products are not yet saturated
According to the Grand Strategy Matrix, organizations in which quadrant have a strong
competitive position but are in a slow-growth industry?
A) I
B) II
C) III
D) IV
E) V
Foreign revenue as a percentage of total company revenues ________ in hundreds of
U.S. firms, including ExxonMobil, Gillette, and Citicorp.
A) is almost 10 percent
B) approaches 20 percent
C) is 25 percent
D) exceeds 50 percent
E) is nearly 70 percent
According to McGinnis, a mission statement should be all of the following EXCEPT
A) it should be specific enough to control creative growth
B) it should be stated in clear terms
C) it should distinguish an organization from all others
D) it should define what an organization is
E) it should serve as a framework for evaluating both current and prospective activities
A systematic and ethical process for gathering and analyzing information about the
competition’s activities and general trends to further a business’ own goals is called
A) unethical business practice.
B) artificial intelligence.
C) competitive intelligence.
D) industrial espionage.
E) competitive advantage.
What question is asked in conjunction with the philosophy component of a mission
statement?
A) What are the firm’s major products or services?
B) Is the firm committed to growth and financial soundness?
C) What are the basic beliefs, values, aspirations, and ethical priorities of the firm?
D) Is the firm responsive to social, community, and environmental concerns?
E) Are employees a valuable asset of the firm?
Which of the following is NOT true regarding stock issuances?
A) They are always better than debt for raising capital.
B) Their effect on stock price is a concern.
C) They can require a company to share future earnings with all new shareholders.
D) Dilution of ownership is a special concern.
E) All of the above statements are true.
Competitive advantage normally is the result of superiority in resources, skills, and
A) employees.
B) position.
C) consistency.
D) feasibility.
E) governance.
Which component of a mission statement addresses the basic beliefs, values,
aspirations, and ethical priorities of the firm?
A) Technology
B) Philosophy
C) Concern for public image
D) Customers
E) Self-concept
The attitude of U.S. firms toward research and development is best described by which
of the following?
A) The veil of secrecy is being lifted, resulting in more collaboration.
B) Firms are more cutthroat than ever and less cooperative with each other.
C) Firms are less interested in working with universities.
D) Firms are spending less in total research and development expenditures.
E) Firms are less involved with research consortia than ever.
Strategic management focuses on integrating management, ________, and information
systems to achieve organizational success.
A) marketing
B) finance/accounting
C) production/operations
D) research and development
E) all of the above
Which of the following U.S. industries is NOT yet greatly challenged by foreign
competitors?
A) Aircraft manufacturing
B) Auto manufacturing
C) Heavy equipment manufacturing
D) Tire manufacturing
E) Furniture manufacturing
Japan’s elderly population ratio is _______ percent.
A) 13
B) 17
C) 19
D) 22
E) 65
Today, boards of directors are composed mostly of
A) outsiders.
B) management.
C) union members.
D) company employees.
E) company stockholders.
Explain the relationship between strategic management and competitive advantage for
firms. How can a firm achieve sustained competitive advantage?
Discuss the different perspectives and concerns of the Balanced Scorecard.
Identify the five basic functions of management, and describe each function.
Discuss some contingency plans commonly established by firms.
Discuss the process of performing an external audit.
According to James Van Horne, what are the three decisions that comprise the functions
of finance? Describe each function.