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.
It is unusual for the claims and concerns of a company’s stakeholders to vary or
conflict.
Unrelated diversification may be an especially effective strategy when an organization’s
basic industry is experiencing increasing annual sales and profits.
A strategy of seeking ownership or increased control of a firm’s suppliers is backward
integration.
There is no one ideal strategy-evaluation system for all organizations.
A sense of self-concept is one of the nine components a good mission statement should
include.
Besides net profit from operations and the sale of assets, two basic sources of funds for
an ongoing enterprise are debt and equity.
The strategic-management process is conceptually different for multinational firms than
for purely domestic firms.
The smile is one form of communication that works the same worldwide.
Market penetration, market development, and product development are intensive
strategies.
Strengths and weaknesses are determined relative to competitors.
Consistency, distinctiveness, advantage, and feasibility are Richard Rumelt’s four
criteria for evaluating a strategy.
The Internet is changing the very nature of many industries by altering product life
cycles and changing the historical trade-off between production standardization and
flexibility.
The trend in the U.S. is toward larger boards, with an average of 18 members being the
norm.
Terms such as objectives, mission, strengths, and weaknesses were first formulated to
address problems
A) on the battlefield.
B) in the boardroom.
C) on the trading floor.
D) in the military hierarchy.
E) in interpersonal relationships.
Which of the following is NOT a characteristic that describes the most competitive
companies in America?
A) Divestiture is essential to growth.
B) People make a difference.
C) Innovate or evaporate.
D) There is no substitute for quality and no greater threat than failing to be
cost-competitive on a global basis.
E) Whether it’s broke or not, fix it.
Joint ventures and partnerships between domestic and foreign firms are
A) falling out of favor.
B) increasingly difficult to engineer.
C) the exception rather than the rule.
D) extremely commonplace.
E) subject to too many regulations to be feasible.
A pattern of behavior developed by an organization as it learns to cope with its
problems of external adaptation and internal integration, and that has worked well
enough to be considered valid and to be taught to new members as the correct way to
perceive, think, and feel is called
A) dysfunctional behavior.
B) groupthink.
C) behavior modification.
D) organizational culture.
E) internal audit effect.
Which element in the projected income statement CANNOT be forecasted using the
percentage-of-sales method?
A) Cost of goods sold
B) Selling expense
C) Administrative expense
D) Interest expense
E) All of these items can be forecasted using the percentage-of-sales method.
Which method of determining a firm’s net worth divides the market price of the firm’s
stock by the annual earnings per share, and multiplies this number by the firm’s average
net income for the past five years?
A) Debt/equity method
B) Current ratio method
C) Price-earnings ratio method
D) Long-term asset method
E) Outstanding shares method
The potential for creative growth in an organization can be limited by
A) an overemphasis on stakeholders.
B) not enough emphasis on stakeholders.
C) a mission statement that is too general.
D) a mission statement that is too specific.
E) a mission statement that is too dynamic.
According to the Grand Strategy Matrix, which strategy is recommended for a firm
with rapid market growth and a strong competitive position?
A) Market penetration
B) Unrelated diversification
C) Joint venture
D) Retrenchment
E) Liquidation
According to I/O theorists, which of the following contributes leastto firm’s
performance?
A) Economies of scale
B) Barriers to market entry
C) Product differentiation
D) Internal resources
E)
Which strategy would be effective when the stockholders of a firm can minimize their
losses by selling the organization’s assets?
A) Integration
B) Differentiation
C) Diversification
D) Cost leadership
E) Liquidation