Fundamentals of Human Resource Management, 5e (Dessler)
Chapter 3 Human Resource Strategy and Analysis
1) What is the first step in the strategic management process?
A) performing internal audits
B) defining the current business
C) translating the mission into strategic goals
D) implementing a long-term strategy
2) During the strategic planning process, environmental scanning worksheets are used for
________.
A) providing employees with job performance data
B) gathering information about economic trends
C) formulating a mission and vision statement
D) assessing the implementation of a strategy
3) A ________ statement indicates the firm’s intended direction.
A) performance
B) strategic
C) mission
D) vision
4) Vision statements focus on the ________.
A) past
B) present
C) future
D) impossible
5) A ________ lays out what a business strives to be while a ________ lays out what it should be
now.
A) mission; vision
B) vision; mission
C) goal; strategy
D) CEO; CFO
6) A team of managers has been assigned the task of developing and implementing a strategic
plan using the strategic management process. The team has already defined the current business
and mission. What should the team most likely do next?
A) write a new mission statement
B) perform a SWOT analysis
C) evaluate the firm’s vision
D) assess the firm’s performance
7) Holt Tractor Company needs a new strategic plan as a result of losing market share to other
farm equipment companies. A management team at the firm is following the steps of the
strategic management process. So far, the team has evaluated the firm’s internal and external
strengths. What is the next step in the strategic management process?
A) evaluating the strategic plan
B) choose specific strategies
C) formulating a new business direction
D) decide on strategic goals
8) Which of the following is a simple guide used to compile relevant information about
economic, competitive, and political trends that may affect a firm?
A) organization chart
B) workforce requirement matrix
C) external resource system table
D) environmental scanning worksheet
9) The sales director at WebMD is developing goals regarding sales revenue targets and the
number of new medical-related content providers that the firm needs to maintain a competitive
advantage. In which step of the strategic management process is the sales director most likely
involved?
A) evaluating the firm’s opportunities
B) formulating a new business direction
C) deciding on strategic goals
D) evaluating the strategic plan
10) Last year, General Motors began a strategy to improve product quality and customer
satisfaction. Recent reports show that GM’s product recalls for the first half of the year are higher
than for the entire previous year. GM explains that the figures support the corporate commitment
to quality and satisfaction. In which step of the strategic management process is GM currently
focusing?
A) deciding on strategic goals
B) evaluating the firm’s strengths and weaknesses
C) formulating a new business direction
D) evaluating the strategic plan
11) Which of the following summarizes a company’s main tasks at the present time?
A) mission statement
B) strategic plan
C) code of ethics
D) vision statement
12) The ________ of the California Energy Commission indicates that the organization assesses
and acts through public and private partnerships to improve energy systems that promote a strong
economy and a healthy environment.
A) mission statement
B) strategic plan
C) code of ethics
D) vision statement
13) The primary tool used by managers who audit a firm’s environment as part of the strategic
management process is the ________.
A) BCG matrix
B) QSPM matrix
C) SWOT analysis
D) EPS/EBIT analysis
14) A company’s ________ strategy identifies the portfolio of businesses that comprise the
company and the ways in which these businesses relate to each other.
A) functional
B) business unit
C) corporate-level
D) competitive
15) What does a company’s corporate-level strategy identify?
A) the company’s long-term competitive position in the marketplace
B) the portfolio of businesses that comprise the company
C) the possibility of becoming a low-cost leader
D) the sources of uniqueness in the industry
16) Which type of strategy identifies how to build and strengthen a firm’s long-term competitive
position in the marketplace?
A) functional
B) business-level
C) corporate-level
D) vertical integration
17) What does a company’s business-level strategy identify?
A) how to build and strengthen the business’s long-term competitive position in the marketplace
B) the portfolio of businesses that comprise the company
C) the basic courses of action that each department will pursue in order to help the business
attain its competitive goals
D) what characteristics make the firm unique in the industry
18) A company’s ________ strategy identifies the basic courses of action that each department
will pursue in order to help the business attain its competitive goals.
A) functional
B) business-level
C) corporate-level
D) competitive
19) What does a company’s functional-level strategy identify?
A) how to build and strengthen the business’s long-term competitive position in the marketplace
B) the portfolio of businesses that comprise the company
C) the basic courses of action that each department will pursue in order to help the business
attain its competitive goals
D) how the company can become a low-cost leader
20) A diversification corporate strategy implies that a firm will ________.
A) become an industry’s low-cost leader
B) expand by adding new product lines
C) save money by producing its own raw materials
D) reduce the company’s size to increase market share
21) Marriott Hotels is considering the acquisition of a furniture-making business. What type of
strategy is Marriott most likely pursuing?
A) consolidation
B) diversification
C) concentration
D) geographic expansion
22) Harley-Davidson sells a line of boots, helmets, and leather jackets indicating that the firm is
most likely pursuing which of the following strategies?
A) consolidation
B) diversification
C) geographic expansion
D) horizontal integration
23) Winchester Rugs operates a website called www.buyrugsdirect.com, so Winchester Rugs is
most likely implementing a strategy of ________.
A) consolidation
B) geographic expansion
C) vertical integration
D) concentration
24) A firm that expands by producing its own raw materials or acquiring a retail outlet to sell its
own products is most likely using a strategy of ________.
A) consolidation
B) geographic expansion
C) vertical integration
D) diversification
25) Starbucks announced that it will be closing approximately 600 of its stores. This information
suggests the firm is most likely using a(n) ________ strategy.
A) consolidation
B) diversification
C) integration
D) expansion
26) Sweet Leaf Tea, a Texas-based maker of bottled iced tea, is a small but fast-growing firm
that has gained a loyal following for its use of fresh, organic ingredients in its beverages.
Although beverage industry experts recommended that Sweet Leaf replace the organic cane
sugar and honey it uses with less costly high-fructose corn syrup, Sweet Leaf refused because of
the company’s mission to provide a high-quality, organic beverage to consumers. The 11-year-
old company has 50 employees, and its products are available in 30% of the U.S. market. Sweet
Leaf Tea recently received multimillion dollar investments which will enable the business to
expand its national presence.
Which of the following, if TRUE, would best support the argument that Sweet Leaf Tea should
implement a corporate-level strategy of concentration?
A) Sweet Leaf Tea can expand its customer base and reduce costs by selling its products directly
at Sweet Leaf stores.
B) Sweet Leaf Tea can develop a national name by adding new product lines, such as organic
snack foods and organic coffee.
C) Sweet Leaf Tea’s marketing research indicates that customers would purchase the organic
beverages more frequently if the prices were lower.
D) Sweet Leaf Tea can achieve growth by aggressively selling its beverages in current markets
where loyal customers will help boost word-of-mouth.
27) Sweet Leaf Tea, a Texas-based maker of bottled iced tea, is a small but fast-growing firm
that has gained a loyal following for its use of fresh, organic ingredients in its beverages.
Although beverage industry experts recommended that Sweet Leaf replace the organic cane
sugar and honey it uses with less costly high-fructose corn syrup, Sweet Leaf refused because of
the company’s mission to provide a high-quality, organic beverage to consumers. The 11-year-
old company has 50 employees, and its products are available in 30% of the U.S. market. Sweet
Leaf Tea recently received multimillion dollar investments which will enable the business to
expand its national presence.
Which of the following, if TRUE, would most likely undermine the argument that Sweet Leaf
Tea should implement a corporate-level strategy of vertical integration?
A) Sweet Leaf Tea lacks the facilities or knowledge to produce the raw ingredients for its
beverages.
B) Market research suggests that Sweet Leaf Tea customers primarily purchase only one flavor
of tea.
C) Most loyal customers of Sweet Leaf Tea purchase the beverage at neighborhood convenience
stores.
D) Sweet Leaf Tea has decided to lower its prices by replacing cane sugar with corn syrup in
some of its beverages.
28) Sweet Leaf Tea, a Texas-based maker of bottled iced tea, is a small but fast-growing firm
that has gained a loyal following for its use of fresh, organic ingredients in its beverages.
Although beverage industry experts recommended that Sweet Leaf replace the organic cane
sugar and honey it uses with less costly high-fructose corn syrup, Sweet Leaf refused because of
the company’s mission to provide a high-quality, organic beverage to consumers. The 11-year-
old company has 50 employees, and its products are available in 30% of the U.S. market. Sweet
Leaf Tea recently received multimillion dollar investments, which will enable the business to
expand its national presence.
Which of the following, if TRUE, best supports the idea that Sweet Leaf Tea has implemented a
competitive strategy of differentiation?
A) Other brands of bottled iced tea compete with Sweet Leaf Tea by offering new flavors at
competitive prices.
B) Sweet Leaf Tea sells both lemonade and tea in a variety of flavors that appeal to consumers of
all ages.
C) Loyal customers of Sweet Leaf Tea seek products that are USDA certified organic despite the
associated higher costs.
D) New Sweet Leaf Tea customers are initially attracted to the unique label and logo on the
bottles.
29) Walmart competes on price, while Target competes on style. Walmart follows a competitive
strategy based on ________, while Target follows a strategy based on ________.
A) cost leadership; differentiation
B) focusing; cost leadership
C) geographic location; focusing
D) differentiation; niche leadership
30) Which term refers to any factors that allow a firm to differentiate its product or service from
those of its competitors to increase market share?
A) functional strategy
B) competitive advantage
C) corporate strategy
D) related diversification
31) Companies like Ferrari are known as ________ because they carve out a market niche and
compete by providing a product that customers can obtain in no other way.
A) cost leaders
B) focusers
C) market leaders
D) visionaries
32) A firm’s functional strategies identify the broad activities that each ________ will pursue in
order to help the firm accomplish its competitive goals.
A) employee
B) executive
C) department
D) HR manager
33) The ________ manager is in a good position to supply “competitive intelligence“—
information on what competitors are doing.
A) middle
B) financial
C) functional
D) human resources
34) All of the following are services that human resource managers provide EXCEPT ________.
A) conducting employee opinion surveys
B) overseeing database recovery systems
C) details on competitor’s incentive plans
D) pending legislation about labor laws
35) The basic steps in the management planning process include setting objectives, reviewing
alternative courses of action, and evaluating which options are best.
36) A mission statement is a general statement of a company’s intended direction that evokes
emotional feelings in the organization’s members.
37) A vision statement is broader and more future-oriented than a mission statement.
38) Conducting employee opinion surveys is the only task assigned to most HR departments.
39) The first step in management planning is setting goals.
40) Compiling information about a company’s environment is more easily accomplished with a
SWOT chart than an environmental scanning worksheet.
41) A diversification corporate strategy involves expanding a firm by producing necessary raw
materials.
42) Firms that open facilities overseas are implementing a functional strategy of geographic
expansion.
43) By emphasizing the safety of its cars, Volvo stands out as an example of a firm that is
implementing a differentiation strategy.
44) Consolidation keeps the company’s strategy up-to-date by assessing progress toward strategic
goals and taking corrective action as needed.
45) Cost leadership, differentiation, and focus strategies are types of corporate-level strategies.
46) A vertical integration strategy means that the firm will expand by adding new product lines.
47) McDonald’s addressed its lagging profitability by first closing stores operating below its
guidelines. McDonald’s used a consolidation strategy.
48) A business-level strategy is implemented by Pizza Hut, Domino’s, Papa John’s, and Little
Caesar’s in their competition with each other for pizza customers.
49) What is strategic management? Define the term. List and describe the seven steps in the
strategic management process.
50) Explain the difference between a vision and a mission. What role does a firm’s vision
statement play in corporate and competitive strategies?
51) Identify the three levels of strategic planning and describe the function of each level. What is
the relationship between human resource strategy and a firm’s strategic plans?
52) What is a competitive advantage? How does HR management affect a firm’s competitive
advantage? In your answer, provide examples of competitive advantages held by specific firms.