Regardless of the size of the organization, a certain amount of “management by
wandering around” at all levels is essential to effective strategy evaluation.
A conservative rule of thumb for measuring the value of a firm is to establish a
business’ worth to be 10 times the firm’s most current annual profit.
External audits attempt to identify key variables that offer actionable responses.
Avoidance, defusion, and confrontation are the classifications for the various types of
conflict that can arise in organizations.
When additional stock is issued to finance implementation of strategy, ownership and
control of the enterprise are strengthened.
The need to amortize massive R&D investments over many markets is a major reason
why the aircraft manufacturing industry became global.
The size of the circle in a BCG Matrix corresponds to the proportion of corporate
revenue generated by that business unit.
Yahoo was one of the firms most admired in its industry according to Fortune’s 2012
evaluation.
The total assets turnover ratio is calculated by dividing sales by fixed assets.
Strategic objectives include larger market share, quicker on-time delivery than rivals,
shorter design-to-market times than rivals, lower costs than rivals, and wider
geographic coverage than rivals.
A mission statement that is limited enough to exclude some ventures is a poor mission
statement.
The only reasons businesses have for determining their worth is preparing to be sold or
to buy other companies.
Much of Europe lingers in a recession.
The major benefit of the BCG Matrix is that it draws attention to the cash flow,
investment characteristics, and needs of an organization’s various divisions.
Stakeholders both affect and are affected by an organization’s strategic decisions.
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
Both business and military organizations must ________ and ________ to be
successful.
A) be impervious to change; continually improve
B) adapt to change; continually improve
C) shun change; stay the course
D) be impervious to change; stay the course
E) none of the above
Which of the following is NOT a reason given for poor or no strategic planning in an
organization?
A) Planning is viewed as a waste of time
B) Content with current success
C) Too busy “firefighting” to plan ahead
D) No monetary rewards for planning
E) Trust of management makes it unnecessary
What is the first step in the comprehensive strategic-management model?
A) Developing vision and mission statements
B) Performing external audits
C) Performing internal audits
D) Measuring and evaluating performance
E) Establishing long-term objectives
According to author Alvin Toffler, what occurs when the nature, types, and speed of
changes overpower an individual’s or organization’s ability and capacity to adapt?
A) Corporate insecurity
B) Corrective actions
C) Future shock
D) Corporate agility
E) Projected performance
To perform an external audit, a company first must
A) get an approval from the Securities and Exchange Commission.
B) perform an internal audit.
C) gather competitive intelligence and information about external trends.
D) hire a consultant to develop a comprehensive strategic plan.
E) all of the above
Formal statements of organizational philosophy, charters, creeds, materials used for
recruitment and selection, and socialization help an organization
A) abide by SEC laws.
B) link culture to strategy.
C) set guidelines for firing.
D) increase profits.
E) manage conflicts between stakeholders.
________ countries are market leaders in labor-intensive industries and ________
offers abundant natural resources and rapidly developing markets.
A) East Asian; Brazil
B) South American; Germany
C) East Asian; Germany
D) South American; Brazil
E) European; Japan
What happens when interest rates rise?
A) Discretionary income increases.
B) The demand for discretionary goods increases.
C) Discretionary income is unchanged.
D) The demand for discretionary goods decreases.
E) Discretionary income increases and the demand for discretionary goods decreases.
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?
________ refers to policies that require employees to report any unethical violations
they discover or see in the firm.
A) Whistle-blowing
B) Bribery
C) Adultery
D) Sustainability
E) Stewardship
Bankruptcy
A) should never be used as a strategy.
B) should be used only when one is legally forced to do so.
C) can be an effective type of retrenchment strategy.
D) should only be used for large firms.
E) should only be used for small, private firms.
In the BCG Matrix, which element represents the industry growth rate in sales,
measured in percentage terms?
A) x-axis
B) y-axis
C) first quadrant
D) second quadrant
E) third quadrant