Usually, the strategic planning staff is charged with supporting only top management in
the strategic planning process.
Answer:
Society increasingly expects corporate boards to balance the economic goal of
profitability with the social needs of society.
Answer:
ABC is an accounting method for allocating direct and fixed costs to individual
products.
Answer:
The multi-domestic MNC and the global MNC should use loose controls on its foreign
units.
Answer:
ROI stands for return on incentives.
Answer:
Extrapolation rests on the assumption that the world is relatively dynamic and changes
quickly in the short run.
Answer:
10-K forms include detailed information not usually available in an annual report.
Answer:
A current trend in corporate information systems is the increasing use of the Internet for
marketing, intranets for internal communication, and extranets for logistics and
distribution.
Answer:
Two suppliers are the sole suppliers of two different parts, but they are also backup
suppliers for each other’s parts in parallel sourcing.
Answer:
According to the BCG Growth Share Matrix, cash cows are market share leaders
typically at the growth stage of their product life cycle and are usually able to generate
enough cash to maintain their high share of the market.
Answer:
Church & Dwight uses the line extension strategy when they put the Arm & Hammer
name on various new food products.
Answer:
A company’s center of gravity is the part of the value chain that is most important to the
company and the point where its greatest expertise and core competencies lie.
Answer:
The greatest strengths of a Stage I corporation are its flexibility and dynamism.
Answer:
A typical financial analysis would compare the firm under study with industry
standards.
Answer:
Succession planning for the board and top management team is one of the five
responsibilities of the board of directors.
Answer:
Outside directors may be executives of other firms but are not employees of the board’s
corporation.
Answer:
Corporate parenting is the coordination of cash flow among units.
Answer:
Companies that pursue related diversification strategies through internal development
make greater use of interdivisional transfers of people than do companies that grow
through unrelated acquisitions.
Answer:
The attractiveness of a strategic alternative is affected by its perceived compatibility
with the key stakeholders in a corporation’s task environment.
Answer:
A functional strategy may include competitive or cooperative strategies.
Answer:
One limitation of portfolio analysis is that it provides an illusion of scientific rigor.
Answer:
In case analysis, it is best to make an exhibit that includes all the financial ratios.
Answer:
Stage IV of a corporation could involve a pressure-cooker crisis.
Answer:
The product life cycle enables a marketing manager to examine the marketing mix of a
particular product or group of products in terms of its position in its life cycle.
Answer:
To improve organizational learning, many multinational corporations are providing
their managers with international assignments as long as five years.
Answer:
Corporate strategy deals primarily with the choice of direction for the firm as a whole
and the management of its business or product portfolio.
Answer:
Vertical integration is the degree to which a firm operates vertically in multiple
locations on an industry’s value chain from extracting raw materials to manufacturing to
retailing.
Answer:
In tacit collusion, there is no direct communication among competing firms.
Answer:
Staffing issues can involve hiring new people with new skills, firing people with
inappropriate or substandard skills, and/or training existing employees to learn new
skills.
Answer:
A cost leader’s lower costs allow it to continue to earn profits during times of heavy
competition.
Answer:
An example of a company following a cost focus strategy is Potlach Corporation, who
makes house brands of toilet paper for Safeway and other grocery store chains.
Answer:
Stage 4 of international development is a multinational corporation with global
emphasis denationalizing its operations.
Answer:
An industry is a group of firms producing a similar product or service.
Answer:
When a company deals with obtaining raw materials, parts, and supplies needed to
perform the operations function, the company is developing its ________ strategy.
A) operations
B) purchasing
C) R&D
D) financial
E) human resource management
Answer:
According to Porter, a business unit in a competitive marketplace with no generic
competitive strategy is
A) achieving synergy.
B) practicing innovative leadership.
C) stuck in the middle.
D) not goal directed.
E) last in line.
Answer:
According to Carroll, the responsibility that management of a business organization has
to produce goods and services of value to society so that the firm may repay its
creditors and stockholders is called
A) legal responsibilities.
B) ethical responsibilities.
C) economic responsibilities.
D) financial responsibilities.
E) discretionary responsibilities.
Answer:
A checklist of questions, by area or issue that enables a systematic analysis to be made
of various corporate functions and activities is referred to as a(n)
A) scenario.
B) portfolio.
C) strategic audit.
D) social responsibility audit.
E) SOP.
Answer:
What are the two distinct attributes of corporate culture?
A) differentiation and integration
B) durability and imitability
C) concern for people and concern for task
D) intensity and integration
E) amount of complexity and tolerance of change
Answer:
Strategic managers must be concerned with human resource management because
A) dealing with people is their primary job.
B) quality of work life is more important than strategic management.
C) the best strategies are meaningless if employees do not have the skills to carry them
out or if jobs cannot be designed to accommodate the available workers.
D) workers are more likely to go on strike if management attempts to cross them.
E) they must be aware of the possibility and potential of unionism.
Answer:
Net profit margin is what type of financial ratio?
A) liquidity ratio
B) profitability ratio
C) activity ratio
D) leverage ratio
E) revenue ratio
Answer:
Which of the following is NOT descriptive of responsibility centers?
A) They are used to the extent that they can isolate specific functional units such as
R&D.
B) Each responsibility center has its own budget and is evaluated on its use of budgeted
resources.
C) The responsibility center coordinates all the functional areas and project
developments to implement the strategic decision plan.
D) The center uses resources to produce a service or a product.
E) A responsibility center is headed by the manager responsible for the center’s
performance.
Answer:
An MNC uses which international strategy for entering a foreign market by combining
the higher labor skills and technology available in the developed countries with the
lower cost labor available in the developing countries?
A) licensing
B) joint ventures
C) production sharing
D) exporting
E) acquisitions
Answer:
The last stage of a hypercompetitive industry is reached when the remaining large
global competitors
A) raise entry barriers.
B) move into untapped markets.
C) attack the strongholds of other firms.
D) compete on cost and quality.
E) work their way to a situation of perfect competition in which no one has any
advantage and profits are minimal.
Answer:
The vast majority of inside directors are from all of the following EXCEPT
A) lower-level operating employee.
B) president of the corporation.
C) vice-president of operational units.
D) chief executive officer.
E) vice-president of functional units.
Answer:
According to Porter, to achieve a cost advantage by following the functional strategy of
technological followership, a business unit should
A) pioneer the lowest-cost product design.
B) innovate in other activities to increase buyer value.
C) avoid R&D costs through imitation.
D) create low-cost ways of performing value activities.
E) be the first firm down the learning curve.
Answer:
The Dow Jones Sustainability Index includes
A) environmental, economic, and quality sustainability.
B) industry, environmental, and economic sustainability.
C) environmental, economic, and social sustainability.
D) ethical, economic, and social sustainability.
E) environmental, ethical, and quality sustainability.
Answer:
Which of the following is NOT one of the general strategic types according to Miles
and Snow?
A) initiators
B) reactors
C) analyzers
D) prospectors
E) defenders
Answer:
________ is used worldwide and measures the total output of goods and services within
a country’s borders.
A) CPI
B) Prime interest rate
C) GDP
D) Z-Value
E) The Index of sustainable growth
Answer:
Apple is an example of a company following which of Porter’s generic competitive
strategies?
A) cost leadership
B) differentiation
C) cost focus
D) competitive scope
E) diversification
Answer:
All of the following are examples of behavior controls EXCEPT
A) monitoring employees’ phone calls.
B) monitoring employees’ PCs.
C) monitoring employees’ Internet usage.
D) using ISO 14000 Standards Series.
E) sales quotas.
Answer:
The breadth of an organization’s culture is also known as
A) cultural intensity.
B) cultural diversification.
C) cultural integration.
D) cultural strategy.
E) cultural prerogative.
Answer:
Which of the following is NOT an essential ingredient of TQM?
A) intense focus on customer satisfaction
B) internal as well as external customers
C) action planning
D) continuous improvement
E) accurate measurement of every critical variable in a company’s operations
Answer:
The strategy implementation tool used to determine what actions are going to be taken,
by whom, during what time frame, and with what expected results is called a(n)
A) mission statement.
B) action plan.
C) MBO.
D) TQM.
E) succession plan.
Answer:
According to Porter, the corporation is most concerned with
A) the intensity of competition within its industry.
B) the aggregate level of demand for a product line.
C) a market’s position on its life cycle.
D) the amount of pressure from the societal environment.
E) the level of government action in an industry.
Answer:
According to Barney, under which condition would tacit collusion most likely be
successful?
A) There is a large number of identifiable competitors.
B) Costs are not similar among firms.
C) One firm tends to act as the price leader.
D) Sales are characterized by a high frequency of large orders.
E) There are low barriers to entry in the industry.
Answer:
The purpose of vertical growth is to
A) take over a function previously supplied by a former employer.
B) take over a function previously provided by a supplier or by a distributor.
C) acquire a company of similar objective.
D) sell a company encumbered with debt.
E) expand to countries with strong trade alliances.
Answer:
The approach to ethical behavior which proposes that human beings have certain
fundamental rights that should be respected in all decisions, thus avoiding interfering
with the rights of others is called
A) individual rights approach.
B) mercantilism approach.
C) utilitarian approach.
D) justice approach.
E) moral imperialism approach.
Answer:
Which of the following is NOT one of the major outsourcing errors that should be
avoided?
A) failure to keep core activities inhouse
B) selecting the wrong vendor
C) writing a poor contract
D) micromanaging the outsourced activity to maintain control
E) overlooking personnel issues
Answer:
When considering acceptable alternative strategies, the most important criterion is the
capability of the proposed strategy to deal with
A) the prospects of ensuring profitable return on investment.
B) the specific strategic factors developed in the SWOT analysis.
C) defining the competitive environment in which the firm is competing.
D) the future long-term prospects of the industry.
E) governmental regulations and requirements placed on the industry.
Answer:
Which financial ratio measures the company’s ability to pay off its short-term
obligations from current assets, excluding inventories?
A) quick ratio
B) current ratio
C) cash ratio
D) strategic ratio
E) inventory ratio
Answer:
The business model used by HP in selling printers and printer cartridges is the
A) profit pyramid model.
B) advertising model.
C) customer solutions model.
D) efficiency model.
E) multi-component system/installed base model.
Answer:
The strategy which takes place in two basic phases of contraction and consolidation is
A) merger.
B) liquidation.
C) integration.
D) divestment.
E) turnaround.
Answer:
Which of the following is NOT a support activity of the value chain?
A) procurement
B) technology development
C) human resource management
D) marketing and sales
E) strategic planning
Answer:
When the drive of the entrepreneur is no longer enough to keep the Stage I company
from floundering, this type of crisis is called
A) a crisis of autonomy.
B) a crisis of confidence.
C) a crisis of clarity.
D) a crisis of differentiation.
E) a crisis of leadership.
Answer:
The inventory turnover ratio is an example of a(n)
A) steering control.
B) activity control.
C) behavior control.
D) output control.
E) influencing control.
Answer:
Catalyst-level board of directors typically
A) are less involved than active participation boards.
B) take leading roles in establishing and modifying the company mission, objectives,
and strategy.
C) are involved in a limited degree of key decision making.
D) are held to a greater degree of legal responsibility.
E) experience more financial success than less involved boards.
Answer:
Which strategy is developed to pull together the various activities and competencies of
each department so that corporate and business unit performance improves and resource
productivity is maximized?
A) business strategy
B) competitive strategy
C) generic strategy
D) enterprise strategy
E) functional strategy
Answer:
What are the four elements of the MBO process?
Answer:
In a dynamic environment, using consensus to arrive at a strategic decision is not
recommended. Why? What two techniques can strategic managers use to avoid the
consensus trap?
Answer:
Describe the four strategic types of the Miles and Snow typology.
Answer:
Discuss the three general orientations comprising directional strategy?
Answer:
Discuss the two characteristics that determine the sustainability of a firm’s distinctive
competency.
Answer:
What are Hofstede’s dimensions of national culture?
Answer:
Discuss the network structure.
Answer:
What are some of the approaches a company can take to identify and prepare its people
for important positions?
Answer:
List Schilit’s short checklist of items to examine for red flags.
Answer:
What are the four main activities of a learning organization?
Answer:
Define corporate parenting.
Answer:
What are common-size statements?
Answer:
Describe the four general forces in the societal environment.
Answer:
Discuss the most commonly practiced form of forecasting.
Answer:
Discuss Chandler’s conclusion concerning strategy.
Answer:
Explain the difference between a direct and indirect interlocking directorate.
Answer:
What is ERP? What are the three reasons why ERP could fail?
Answer:
Give an example of a technological leader.
Answer:
In evaluating a strategic alternative, if there is little fit with the company’s culture, what
are management’s options?
Answer: