Management Chapter 7 a comprehensive action plan that identifies long-term direction for an organization

Schermerhorn & Bachrach / Exploring Management, 56th Edition Test Bank

File: Chapter 76: Strategy and Strategic Management

Multiple Choice

1. A(n) ______________ is a comprehensive action plan that identifies long-term direction for

an organization.

a) competitive advantage

b) strategy

c) objective

d) idea

2. A ____________ is a clear and lofty sense of why a business exists.

a) mission

b) vision

c) strategic intent

d) logo

6. What are the three levels of strategy used in organizations?

a) Personal, competitive, and corporate

b) Competitive, corporate, and legal

c) Corporate, business, and functional

d) Business, functional, and competitive

7. A strategy that sets the long-term direction for an organization as a whole is called a

__________.

a) corporate strategy

b) financial strategy

c) functional strategy

d) business strategy

8. Which of these is an example of a strategic question at the corporate strategy level?

a) “What should our next product be?”

b) “How will we price our newest product?”

Schermerhorn & Bachrach / Exploring Management, 56th Edition Test Bank

c) “Should we set up more sales offices?”

d) “In what industries and markets should we compete?”

9. A strategy that identifies how a division or business unit will compete in its product or service

domain is called a __________ strategy.

a) corporate

b) middle-management

c) business

d) bottom-level

10. A strategy that guides activities within a specific area of operations is called a(n)

____________ strategy.

a) business

b) functional

c) corporate

d) employee

11. Which of the following is an example of a strategic question at the business strategy level?

a) “How are we going to compete for customers in a competitive market?”

b) “What is our role in supporting engineering?”

c) “How many divisions should we have?”

d) “In what industries and markets should the corporation compete in?”

12. Which of the following is an example of a strategic question for a functional strategy?

a) “How can we best utilize the marketing department to support implementation of the business

strategy?”

b) “What kind of product or service mix should we have?”

c) “How are we going to compete for customers within this this industry and in this market?”

d) “In what industries and markets should the corporation compete in?”

13. A strategy for expanding an organization’s current operations is called a __________.

a) restructuring strategy

b) stability strategy

c) retrenchment strategy

d) growth strategy

Schermerhorn & Bachrach / Exploring Management, 56th Edition Test Bank

14. All of the following are growth strategies EXCEPT:

a) concentration.

b) diversification.

c) vertical integration.

d) restructuring.

15. When a company expands in its existing markets, it is called growth through __________.

a) retrenchment

b) diversification

c) concentration

d) globalization

19. Both Coca-Cola and PepsiCo have pursued __________ by purchasing some of their major

bottlers.

a) forward vertical integration

b) backward vertical integration

c) forward horizontal integration

d) backward horizontal integration

20. A strategy with the objective of correcting performance difficulties in a business through

radical changes to current operations is called a _________ strategy.

a) co–opetition

b) growth

c) status quo

d) retrenchment

21. Which of the following is NOT a retrenchment strategy?

Schermerhorn & Bachrach / Exploring Management, 56th Edition Test Bank

a) Diversification

b) Liquidation

c) Restructuring

d) Divestiture

22. When a company closes and sells its assets in order to pay its debts, it is called __________.

a) divestiture

b) liquidation

c) diversification

d) restructuring

23. Which of the following statements is true about restructuring?

a) It occurs when a business closes and sells its assets to pay creditors.

b) It reduces the scale or mix of operations.

c) It is done by acquiring suppliers or distributors.

d) It involves expansion of an organization’s current operations.

24. When an organization reduces the size of its existing operations, it is called __________.

a) divestiture

b) liquidation

c) downsizing

d) diversification

25. The retrenchment strategy that involves selling off parts of an organization to refocus

attention on core business areas is called __________.

a) liquidation

b) downsizing

c) diversification

d) divestiture

26. __________ protects an insolvent firm from creditors during a period of reorganization to

restore profitability.

a) Divestiture

b) Downsizing

c) Backward integration

Schermerhorn & Bachrach / Exploring Management, 56th Edition Test Bank

d) Chapter 11 bankruptcy

27. A __________ views the world as one market and uses standardized products and advertising

worldwide.

a) multidomestic strategy

b) globalization strategy

c) diversification strategy

d) transnational strategy

28. A __________ strategy customizes products and advertising to the culture of the local

markets into which they are sold.

a) multidomestic strategy

b) globalization strategy

c) diversification strategy

d) transnational strategy

Schermerhorn & Bachrach / Exploring Management, 56th Edition Test Bank

Ans: c

Bloom’s: Knowledge

Level: Easy

Learning Objective 1: Identify the types of strategies used by organizations.

Section Reference: Cooperation strategies focus on alliances and partnerships.

AACSB: Analytic

32. Garden Tools Inc. uses the Internet to market their products and gain competitive advantage.

Garden Tools is employing a(n) __________.

a) communication strategy

b) co–opetition strategy

c) e-business strategy

d) multidomestic strategy

33. Which of the following web-based business models provides a meeting point sold by

subscription or supported by advertising?

a) Advertising model

b) Brokerage model

c) Community model

d) Freemium model

Schermerhorn & Bachrach / Exploring Management, 56th Edition Test Bank

Ans: b

Bloom’s: Knowledge

Level: Easy

Learning Objective 1: Identify the types of strategies used by organizations.

Section Reference: E-business strategies focus on using the Internet for business success.

AACSB: Analytic

37. Which of the following strategies uses information technology and the Internet to link

organizations vertically in supply chains?

a) B2C business strategies

b) P2P business strategies

c) B2G business strategies

d) B2B business strategies

38. Which of the following terms refers to the process of formulating and implementing

strategies to accomplish long-term goals and maintain a competitive advantage?

a) Strategic controlling

b) Strategic management

c) Globalization

d) Sustainability