46. Of the strategic management functions, which is considered the most fundamental?
a.
Executing
b.
Analyzing
c.
Controlling
d.
Planning
e.
Leading
47. The planning process starts with:
a.
A formal mission that defines the organization’s purpose
b.
Tactical planning
c.
Strategic planning
d.
Operational planning
e.
Controlling performance
48. Silver Star Automobiles holds monthly planning and operational reviews to ensure that it is on track
for meeting organizational goals. This involves which stage of the organizational planning process?
a.
Developing the plan
b.
Translating the plan
c.
Plan operations
d.
Executing the plan
e.
Monitoring and learning
49. Which type of plan helps managers implement the overall strategic plan?
a.
Operational
b.
Contingency
c.
Tactical
d.
Crisis
e.
Corporate-level
50. Which of the following is a commonly-cited limitation of planning?
a.
Plans limit employee motivation and commitment
b.
Plans make resource allocation more difficult
c.
Plans make it more difficult to measure standards of performance
d.
Plans boost intuition and creativity
e.
Plans can create a false sense of certainty
51. Jerrica, a finance manager at LRV industries, is asked by her boss to develop a plan in the event that
company sales drop by 20 percent or more. This type of plan is known as a(n):
a.
Contingency planning
b.
Financial planning
c.
Crisis planning
d.
Consumer protection
e.
Environmental planning
52. The two stages of crisis planning include:
a.
Prevention and control
b.
Planning and leading
c.
Prevention and preparation
d.
Preparation and control
e.
Leading and organizing
53. Jeff is a top manager at a textile factory. He is developing a crisis plan in the event that the company
has a toxic spill or accident. Which of the following should Jeff undertake to prepare for such a
crisis?
a.
Building relationships with neighboring businesses
b.
Detecting signals from the natural environment
c.
Polling employees on the likelihood of an environmental disaster
d.
Designating a crisis management team in the event of an environmental disaster
e.
Dismantling the company’s ties to the external media
54. ___________ are reasonable yet highly ambitious goals that are so clear, compelling, and imaginative
that they fire up employees and engender excellence.
a.
Operational goals
b.
Stretch goals
c.
Strategic goals
d.
Tactical goals
e.
Bottom-up goals
55. A(n) _________ is a cross-functional group of managers and employees who work together to gain a
deep understanding of specific business issues, with the aim of presenting insights related to that issue.
a.
Espionage team
b.
Functional team
c.
Task force
d.
Project team
e.
Intelligence team
56. At Save-tech, Sophia, director of marketing, is a member of a cross-functional group of managers and
employees. The purpose of the group is to gain a deep understanding company’s competitive
environment and periodically present these findings to top management. Sophia is involved in what
type of team?
a.
Intelligence team
b.
Functional team
c.
Task force
d.
Project team
e.
Espionage team
57. One major limitation of goals and plans is:
a.
Goals and plans guide resource allocation
b.
Goals and plans may cause rigidity in a turbulent environment
c.
Goals and plans decrease employee motivation
d.
Goals and plans decrease employee commitment
e.
None of the above
58. The set of decisions and actions used to formulate and execute strategies that will provide a
competitively superior fit between the organization and its environment so as to achieve organizational
goals is known as
a.
strategy formulation.
b.
strategic planning.
c.
strategic management.
d.
strategy implementation.
e.
strategy evaluation.
59. The plan of action that prescribes resource allocation and other activities for dealing with the
environment and helping the organization attain its goals is known as a(n)
a.
goal.
b.
objective.
c.
mission.
d.
vision.
e.
strategy.
60. The condition that exists when the organization’s parts interact to produce a joint effect that is greater
than the sum of the parts acting alone is known as
a.
core competence.
b.
synergy.
c.
value creation.
d.
business-level strategy.
e.
multidomestic strategy.
61. ____ can be defined as the combination of benefits received and costs paid by the customer.
a.
Organizational benefits
b.
Value
c.
Cost-benefit diversity
d.
Synergy
e.
Core competence
62. When properly managed, ____ can create additional value with existing resources, providing a big
boost to the bottom line.
a.
synergy
b.
competitors
c.
government contacts
d.
command structure
e.
cooperation among customers
63. ____ refers to the use of managerial tools to direct resources toward the achievement of strategic
results.
a.
Strategy formulation
b.
Strategy coordination
c.
Strategy execution
d.
Strategy control
e.
Strategy planning
64. Which of the following refers to the planning and decision making that lead to the establishment of the
organization’s goals and of a specific strategic plan?
a.
Strategy formulation
b.
Strategy implementation
c.
Strategy coordination
d.
Strategy control
e.
SWOT
65. Fred has been assigned to conduct a SWOT analysis for his organization, Flintstones, Inc. As part of
this assignment, Fred will
a.
conduct an external wage survey.
b.
search for the strengths, weaknesses, opportunities, and threats that impact his firm.
c.
choose a grand strategy for his firm.
d.
do a cost/benefit analysis.
e.
develop a mission.
66. Classy Clay has extremely creative employees who, in the opinion of the organization, keep the
company ahead of the competition. The creativity of these employees would be classified as
a.
an internal weakness.
b.
an external opportunity.
c.
an external strength.
d.
an internal strength.
e.
a neutral factor.
67. Where does the information about opportunities and threats comes from?
a.
An analysis of the organization’s internal environment
b.
A department by department study of the organization
c.
Scanning the external environments
d.
Employee grievances
e.
Financial ratios of the organization
68. Flush Away, Inc. is particularly concerned about pending legislation in Congress that would further
regulate their organization. This legislation would be classified as
a.
an external opportunity.
b.
an internal strength.
c.
an external threat.
d.
an external weakness.
e.
a congressional chaos.
69. Barriers to entry are related to which competitive force?
a.
Rivalry among competitors
b.
Potential new entrants
c.
Threat of substitute products
d.
Bargaining power of buyers
e.
Bargaining power of suppliers
70. All of the following are Porter’s competitive forces EXCEPT
a.
differentiation.
b.
bargaining power of buyers.
c.
bargaining power of suppliers.
d.
threat of substitute products.
e.
potential new entrants.
71. Which of the following is NOT one of Porter’s competitive forces?
a.
Potential new entrants
b.
Bargaining power of suppliers
c.
Bargaining power of stockholders
d.
Bargaining power of customers
e.
Rivalry among competitors
72. Which of Porter’s five forces is influenced by all of the other four?
a.
Threat of substitute products
b.
Rivalry among competitors
c.
Bargaining power of buyers
d.
Potential new entrants
e.
Bargaining power of suppliers
73. The ____ strategy involves strong central authority, cutting costs, and maintaining standard operating
procedures to be more efficient than competitors.
a.
cost leadership
b.
differentiation
c.
focus
d.
internal growth
e.
liquidation
74. Some people argue that ____ is the most difficult and most important part of strategic management.
a.
SWOT analysis
b.
strategic formation
c.
strategic execution
d.
strategic analysis
e.
strategy evaluation
75. Persuasion, motivation, and changes in cultures and values are examples of which of the dimensions
used to execute strategy?
a.
Visible leadership
b.
Structural design
c.
Human resources
d.
Information and control systems
e.
Candid communication
76. Which of the following is NOT one of the tools used for putting strategy into action?
a.
Visible leadership
b.
Diversification
c.
Human Resources
d.
Communication
e.
Clear roles and accountability
77. The ____ function recruits, selects, trains, transfers, promotes, and lays off employees to achieve
strategic goals.
a.
production
b.
leadership
c.
information and control systems
d.
structural design
e.
human resource
78. After Sunshine Systems merged with RTD Enterprises, company executives noticed that due to
increased employee collaboration between the two units, costs were down and revenues increased
within both areas. This is an example of what business phenomenon?
a.
Strategy execution
b.
Portfolio strategy
c.
Core competency
d.
Synergy
e.
Delivering value
79. Which of the following is true regarding the impact of the Internet on Porter’s Five Forces affecting
industry competition?
a.
Internet increases barriers to entry
b.
Internet decreases bargaining power of suppliers
c.
Internet shifts power away from end customers
d.
Internet cuts down on substitute product threats
e.
Internet blurs differences among competitors
80. Sugar manufacturers have been steadily losing business as a result of increasing use of high-fructose
corn syrup in processed foods. However, sugar sales are beginning to increase again in recent
months. This example most closely demonstrates which of Porter’s Five Forces?
a.
Bargaining power of suppliers
b.
Bargaining power of consumers
c.
Rivalry among competitors
d.
Threat of new entrants
e.
Threat of new substitutes
81. People need to understand how their individual actions can contribute to achieving an organizational
strategy. This can be accomplished by delegating authority, creating teams, and defining roles.
These actions are part of which tool for putting strategy into action?
a.
Visible leadership
b.
Candid communication
c.
Human resources
d.
Clear roles and accountability
e.
Bargaining power of employees
CASE
Scenario – SendToMe.com
SendToMe.com is a large, diversified distributing company. The company is organized into three
divisions: personal products, diagnostic equipment, and office equipment. The personal products
division consists primarily of toiletry products for the individual consumer. The products include
shampoos, conditioners, bath soaps, and mouthwash. All of the products are sold under store brand
labels; typically, the company signs an agreement with a discount store, and the products are sold
under the store’s label. Sales of this division (and in the industry) have been relatively stable for the
past ten years, and the division enjoys a dominant market share. Due to increased efficiencies in
manufacturing and distribution, profits from the division have risen.
The diagnostic equipment division specializes in developing and marketing medical equipment,
specifically equipment used in blood analysis. National sales for medical diagnostic equipment have
been growing over 20 percent per year for the last five years. However, sales for this division are
stagnant and there has been some discussion among senior management about divesting this division.
The office equipment division manufactures a high quality line of office furniture. The products are
distributed through better office equipment stores and interior design firms. Sales in this division have
more than doubled over the past five years.
1. Refer to the scenario above. To assess the internal and external environmental forces that need to be
addressed so the company can remain profitable, SendToMe.com needs to conduct a:
a. strategic intervention
b. SWOT analysis
c. value analysis
d. tactical implementation
e. business correlation study
2. Refer to the scenario above. Threats to the diagnostic equipment division’s problems may lie in:
a. new entrants into the field
b. the development of nanotechnology
c .multiple core competencies
d. growth in the hospital industry
e. all of these
3. Refer to the scenario above. The business-level strategy used by the office equipment division would
be called:
a. cost leadership
b. differentiation
c. focus
d. portfolio
e. core competence
4. Refer to the scenario above. The business-level strategy used by the personal products division would
be called:
a. cost leadership
b. differentiation
c. focus
d. core competence
e. portfolio
COMPLETION
1. A(n) ____________________ is a desired future state that the organization attempts to realize.
2. A(n) ____________________ is a blueprint for goal achievement and specifies the necessary resource
allocations, schedules, tasks, and other actions.
3. The act of determining the organization’s goals and the means for achieving them is referred to as
____________________.
4. ____________________ and plans are the responsibilities of middle managers.
5. Operational plans that focus on specific tasks and processes that help to meet tactical and strategic
goals are developed by ____________________ managers and supervisors.
6. ____________________ describes the organization’s reason for existence.
7. A(n) ____________________ is a broadly stated definition of basic business scope and operations that
distinguishes the organization from others of a similar type.
8. Broad statements describing where the organization wants to be in the future are called
____________________.
9. ____________________ define the action steps by which an organization intends to attain its strategic
goals.
10. Goals that define the outcomes that major departments must achieve in order for the organization to
reach its overall goals are known as ____________________ goals.
11. ____________________ are designed to help execute major strategic plans and to accomplish a
specific part of the company’s strategy.
12. The specific results expected from departments, work groups, and individuals are the
____________________ goals.
13. ____________________ plans are developed at the lower levels of the organization to specify action
steps toward achieving operational goals and to support tactical plans.
14. Plans that define company responses to specific situations, such as emergencies, setbacks, or
unexpected conditions are called ____________________ plans.
15. A special type of contingency plan that is used when events are sudden and devastating and require
immediate response is called ____________________.
16. The crisis management plan should be a(n) ____________________ that specifies the actions to be
taken, and by whom, if a crisis occurs.
17. A group of planning specialists assigned to major departments and divisions to help managers develop
their own strategic plans is called ____________________.
18. ____________ is the set of decisions and actions used to formulate and implement strategies that will
provide a competitively superior fit between the organization and its environment so as to achieve
organizational goals.
19. The plan of action that prescribes resource allocation and other activities for dealing with the
environment and helping the organization attain its goals is called a(n) __________.
20. A business activity that an organization does particularly well relative to its competition is known as
a(n) ________.
21. When organizational parts interact to produce a joint effect that is greater than the sum of the parts
acting alone, __________ occurs.
22. __________ includes the planning and decision making that lead to the establishment of the firm’s
goals and the development of a specific strategic plan.
23. The use of managerial and organizational tools to direct resources toward accomplishing strategic
results is known as ___________.
24. The ability to influence people to adopt the new behaviors needed for strategy implementation is called
_________.
25. It is argued that ___________ is the most difficult and most important part of strategic management.
SHORT ANSWER
1. List four reasons why planning generally positively affects a company’s performance?
2. List the five characteristics of effective goals.
3. What are the two stages of crisis management?
4. List the four components of a SWOT analysis.
5. List Porter’s competitive forces.
ESSAY
1. In what ways do plans and goals benefit an organization?
2. Compare the four levels of goals and plans.
3. Briefly define the characteristics of an effective goal.
4. List three innovative approaches to planning.
5. In order for companies to remain competitive, their strategies must focus on three things. Describe
these three focuses.
6. Differentiate between strategy formulation and strategy execution.
7. Briefly describe the five competitive forces identified by Michael E. Porter.
8. Briefly describe the tools for putting strategy into action.