Relationship-based countries tend to be less transparent and have a higher degree of
corruption than do rule-based countries.
Answer:
An action plan states what actions are going to be taken, by whom, during what time
frame, and with what expected results.
Answer:
Henry Mintzberg discovered that strategic formulation is a regular, continuous process.
Answer:
One skill required of the cost leadership strategy is a strong marketing ability.
Answer:
One advantage of using ROI is that it is a single comprehensive figure that includes all
revenues, costs, and expenses.
Answer:
A dynamic industry expert is someone with an analytical mind who is highly
knowledgeable in other industries and can manage diverse product lines.
Answer:
Strategy formulation is the sum total of the activities and choices required for the
execution of a strategic plan.
Answer:
The key to outsourcing is to purchase from outside only those activities that are not key
to the company’s distinctive competencies.
Answer:
Stewardship theory proposes insiders tend to identify with the corporation and its
success.
Answer:
As more industries become global, strategic management is becoming less important in
positioning a company for long-term competitive advantage.
Answer:
A core competency can be easily imitated to the extent that it is transparent,
transferable, and replicable.
Answer:
In any one strategic decision, the interests of one stakeholder group seldom conflict
with another.
Answer:
With taper integration, a firm internally makes 100% of its key supplies and completely
controls its distributors.
Answer:
Those directors who fail to act with due care and allow the corporation to be harmed
may be held personally liable.
Answer:
Stage III (Divisional Structure) is the point when the entrepreneur is replaced by a team
of managers who have functional specialization.
Answer:
Research generally supports Chandler’s proposition that structure follows strategy as
well as the reverse proposition that structure influences strategy.
Answer:
Penetration pricing attempts to hasten market development and offers the pioneer the
opportunity to use the experience curve to gain market share with a low price and
dominate the industry.
Answer:
Studies of the performance of reengineering programs show clear, consistent, and
overwhelming evidence of success and improved productivity.
Answer:
Integration involves the disintegration of one company’s culture resulting from
unwanted and extreme pressure from the other to impose its culture and practices.
Answer:
The marketing mix refers to product, place, packaging, and price.
Answer:
Those companies using cooperative strategies are generally not able to gain a
competitive advantage.
Answer:
When Boeing created a separate unit to house the newly acquired operations of
McDonnell-Douglas, they were managing the different cultures through separation.
Answer:
The GE Business Screen is based on long-term industry attractiveness and business
strength/competitive position.
Answer:
The term “corporate governance” refers to the relationship among the board of
directors, top management, and the shareholders in determining the direction and
performance of the corporation.
Answer:
Ethical responsibilities are voluntary obligations a corporation assumes.
Answer:
To successfully downsize, companies must invest in the remaining employees.
Answer:
Research indicates that when faced with a question of ethics, managers tend to ignore
codes of ethics and try to solve their dilemma on their own.
Answer:
The resources of an organization include tangible assets, human assets, and intangible
assets.
Answer:
Logistics strategy deals with the flow of products into and out of the manufacturing
process.
Answer:
The statement, “When in Rome, do as the Romans do,” reflects the essence of cultural
relativism.
Answer:
Transferability is the ability of competitors to use duplicated resources and capabilities
to imitate the other firm’s success.
Answer:
TQM links organizational objectives and the behavior of individuals.
Answer:
The importance of sole sourcing was supported by Deming to obtain high supplier
quality.
Answer:
Faulty underlying assumptions are the most frequent cause of forecasting errors.
Answer:
“Let the buyer beware” is a traditional saying in free market capitalism that argues
customers have the right to choose how they spend their money.
Answer:
A company’s annual report from the year of the case can be helpful, but the 10-K form
is not beneficial for those conducting a case analysis.
Answer:
One of the breakthrough developments in technology is the portable information device
and electronic networking.
Answer:
Agency theory suggests that the majority of a board needs to be from outside the firm.
Answer:
One objective of TQM is better, less variable quality of the product and service.
Answer:
Cultural integration is the degree to which members of a unit accept the norms, values,
or other culture content associated with the unit showing the culture’s depth.
Answer:
A corporation run by a team of managers with functional specializations and which
successfully operates in one industry is said to be a
A) Stage I company.
B) Stage II company.
C) Stage III company.
D) Stage IV company.
E) Stage V company.
Answer:
As it relates to operations, AMT stands for
A) Automated Manufacturing Technology.
B) Advanced Manufacturing Technology.
C) Asymptotic Manufacturing Technology.
D) Advanced Monotone Technology.
E) Automated Manufacturing Technician.
Answer:
The T in SWOT stands for
A) trust.
B) technical.
C) terminal.
D) threats.
E) task.
Answer:
According to Porter’s model, a low force can enable the company to earn greater profits
and can be regarded as a(n)
A) benefit.
B) opportunity.
C) advantage.
D) threat.
E) risk.
Answer:
Under what circumstances does an INDIRECT interlocking directorate exist?
A) when both management and the board establish corporate strategic management
B) when a corporation’s employees are included on its board
C) when one or more individuals on one board also serve on a board of a second firm
D) when all board members are also employed by the corporation
E) when two corporations have directors who serve on the board of a third firm
Answer:
According to Miles and Snow, a company that operates in at least two different
product-market areas in which one product is stable and the other one is variable,
reflects which strategic orientation?
A) initiators
B) reactors
C) analyzers
D) prospectors
E) defenders
Answer:
Which type of chief executive officer who is highly knowledgeable in other industries
and can manage diverse product lines would be appropriate for a corporation following
a diversification strategy?
A) professional liquidator
B) dynamic industry expert
C) turnaround specialist
D) analytical portfolio manager
E) cautious profit planner
Answer:
Which CEO of Home Depot learned the dangers of attempting to change corporate
culture?
A) Jack Welch
B) Robert Nardelli
C) Alfred Chandler
D) Julia Stewart
E) Antonio Perez
Answer:
Intel was able to gain a significant cost advantage over its competitors in the production
and sale of microprocessors because of
A) capital requirements.
B) product differentiation.
C) switching costs.
D) economies of scale.
E) access to distribution.
Answer:
The proposition that silicon chips double in complexity every 18 months is referred to
as
A) Ohm’s Law.
B) Moore’s Law.
C) Porter’s Five Forces Model.
D) Mintzberg’s Rule.
E) Keynesian’s Theory.
Answer:
The theory which states that problems arise in corporations because top management no
longer is willing to bear the brunt of their decisions unless they own a substantial
amount of stock in the corporation is called
A) codetermination.
B) agency theory.
C) interlocking management theory.
D) strategic leadership theory.
E) ownership theory.
Answer:
Which financial ratio indicates the number of days of cash on hand, at present sales
levels?
A) days of inventory
B) fixed asset turnover
C) days of cash
D) average collection period
E) inventory turnover
Answer:
The purchasing strategy in which two suppliers are the sole suppliers of different parts,
but are also the backup suppliers for each other’s parts is
A) sole sourcing.
B) multiple sourcing.
C) just-in-time sourcing.
D) backup sourcing.
E) parallel sourcing.
Answer:
One of the benefits of globalization is
A) economies of scale.
B) decreased outsourcing.
C) increased union negotiations.
D) increased taxes.
E) additional human resource training.
Answer:
All of the following are considered primary stakeholders EXCEPT
A) customers.
B) governments.
C) employees.
D) shareholders.
E) creditors.
Answer:
Return on investment (ROI) is the most widely used measure of performance in what
responsibility center?
A) revenue center
B) expense center
C) investment center
D) profit center
E) standard cost center
Answer:
If it is to be successful, Porter advises that a division possess strong marketing abilities,
product engineering, a creative flair, strong capability in basic research and a corporate
reputation for quality or technological leadership, for which one of the following
generic competitive strategies?
A) focus
B) differentiation
C) overall cost leadership
D) vertical growth
E) concentration
Answer:
A new approach to evaluating alternatives under conditions of high environmental
uncertainty that proposes it pays to have a broad range of options open is the
A) net present value.
B) real options approach.
C) stakeholder priority matrix.
D) risk assessment approach.
E) hurdle rate approach.
Answer:
Which of the following is NOT a part of strategy implementation?
A) performance evaluation
B) budgets
C) programs and tactics
D) procedures
E) operational planning
Answer:
If there is little fit between a strategic alternative under consideration and the corporate
culture, which of the following is one of management’s options to consider?
A) Take a chance on ignoring the culture by implementing the strategic alternative.
B) Manage around the culture and change the implementation plan.
C) Try to change the culture to fit the strategy.
D) Change the strategy to fit the culture.
E) all of the above
Answer:
Research comparing concentric with conglomerate diversification concludes that
A) conglomerate diversification is always less profitable than concentric diversification.
B) concentric diversification is always less profitable than conglomerate diversification.
C) the relationship between relatedness and performance follows an inverted U-shaped
curve.
D) neither concentric nor conglomerate diversification are ever profitable.
E) for optimum effectiveness both conglomerate and concentric diversification should
be utilized in tandem.
Answer:
A method developed in the mid-1990s as an efficient means to quickly consolidate a
fragmented industry can be referred to as a
A) merger.
B) strategic rollup.
C) cost strategy.
D) differentiation strategy.
E) focus strategy.
Answer:
What are the three generic competitive strategies that Porter promotes as the means for
outperforming other corporations in a particular industry?
A) competitive scope, differentiation, and focus
B) diversification, concentration, and competitive scope
C) cost, competitive scope, and focus
D) concentration, cost leadership, and differentiation
E) cost leadership, differentiation, and focus
Answer:
The S in SWOT stands for
A) strategies.
B) scanning.
C) strengths.
D) societal.
E) sociocultural.
Answer:
Which financial ratio indicates the ability of the company to meet its annual interest
costs?
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:
When strategic managers have a willingness to reject unfamiliar as well as negative
information it is referred to as
A) strategic paralysis.
B) corporate inertia.
C) management indifference.
D) strategic myopia.
E) corporate apathy.
Answer:
________ is a corporate-wide, integrated process to manage the uncertainties that could
negatively or positively influence the achievement of the corporation’s objectives.
A) ISO 14000 Series
B) Input controls
C) Activity-based costing
D) Enterprise Risk Management
E) Market Value Added
Answer:
All of the following ratios are used in the calculation of a company’s Z-value EXCEPT
A) working capital/total assets.
B) retained earnings/total assets.
C) current assets/current liabilities.
D) market value of equity/total liabilities.
E) sales/total assets.
Answer:
The active cooperation of firms within an industry to reduce output and raise prices to
get around the normal law of supply and demand is referred to as
A) a strategic alliance.
B) collusion.
C) a strategic roll up.
D) a merger.
E) licensing.
Answer:
An MNC uses which international strategy for entering a foreign market by associating
itself with a firm in the host country or a government agency in that country to combine
resources and expertise needed for the development of a new product or technologies?
A) licensing
B) joint ventures
C) production sharing
D) exporting
E) acquisitions
Answer:
When the pressure for local responsiveness is strong and the pressure for coordination
is weak for multinational corporations in an industry, the industry will tend to become
A) global.
B) consolidated.
C) multidomestic.
D) risky.
E) indigenous.
Answer:
Those critical strengths and weaknesses that are likely to determine if a firm will be
able to take advantage of opportunities while avoiding threats are called
A) SWOT.
B) competitive forces.
C) internal strategic factors.
D) quality accounting.
E) factor analysis.
Answer:
A company which has invested so heavily in a particular strategy that it will not
consider a change in this strategy even if it is not successful, would be 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:
A firm’s expansion into other geographic locations and/or increasing the range of
products and services offered to current markets is called
A) forward vertical growth.
B) diversification.
C) backward vertical growth.
D) captive company strategy.
E) horizontal growth.
Answer:
The percentage of European and Japanese-based expatriate managers who fail to adjust
to a host country’s social and business environment is
A) 6% or less.
B) approximately 35%.
C) between 50% to 75%.
D) around 80%.
E) greater than 90%.
Answer:
What are the types of alliances that businesses can engage in?
Answer:
What are the responsibilities of the board of directors?
Answer:
What is the difference between EVA and MVA?
Answer:
What is outsourcing? What are the seven major outsourcing errors that should be
avoided?
Answer:
Discuss W. Edward Deming’s position on sole sourcing.
Answer:
Discuss the guidelines for proper control.
Answer:
What is the balanced scorecard? What are the four areas to be addressed?
Answer:
What are the four stages of corporate development?
Answer:
Discuss competitive strategy differences between a fragmented and a consolidated
industry.
Answer:
In performing a basic financial analysis, what five steps should be taken?
Answer:
Discuss the three basic organizational structures.
Answer:
Describe Porter’s approach to industry analysis.
Answer:
What are the four general methods of managing two different cultures?
Answer:
Why is growth a very attractive strategy?
Answer:
Discuss the reasons a firm may form a strategic alliance.
Answer:
What is the matrix of change? What types of questions does it answer?
Answer: