A code of ethics is a useful way to promote ethical behavior.
Answer:
The combined chair/CEO position is being increasingly criticized because of the
potential for conflict of interest.
Answer:
A corporation uses environmental scanning to avoid strategic surprise.
Answer:
Outsourcing is the alternative to vertical integration.
Answer:
While an organization’s culture can exert a powerful influence on the behavior of all
employees, it can seldom affect a company’s ability to shift its strategic direction.
Answer:
A functional structure is appropriate for a medium sized firm with several product lines
in one industry.
Answer:
NutraSweet can serve as a product substitute for sugar satisfying the same need.
Answer:
Interlocking directorates are a useful method for gaining both inside information about
an uncertain environment and objective expertise about potential strategies and tactics.
They are, however, increasingly frowned upon because of the possibility of collusion.
Answer:
A typical financial analysis of a firm would include a study of the operating statements
for five or so years.
Answer:
A financial strategy examines the financial implications of corporate and business-level
strategic options and identifies the best financial course of action.
Answer:
An example of an intermittent manufacturing system is an auto body repair shop.
Answer:
Climate change has become a growing concern for businesses to include in their
corporate strategies.
Answer:
The top criterion for selecting a good director in U.S. corporations is their willingness
to challenge management when necessary.
Answer:
According to Miles and Snow, reactors are companies with a limited product line that
focus on improving the efficiency of their existing operations.
Answer:
“The customer is always right” is an example of a policy in Nordstrom’s.
Answer:
The network structure becomes most useful when the environment of a firm is unstable
and is expected to remain so.
Answer:
Enterprise risk management is being adopted because of the increasing amount of
environmental uncertainty that can affect an entire corporation.
Answer:
In order to implement reengineering, Hammer suggests that those who use the output of
the process perform the reengineering process.
Answer:
Competitive intelligence is a formal program of gathering information on a company’s
competitors.
Answer:
The key to the effective management of change is communication.
Answer:
According to Schilit, a change of more than 2% in gross margins from year to year is
worth a closer look.
Answer:
Research reveals a positive relationship between corporate reputation and financial
performance.
Answer:
An example of the use of the leader R&D functional strategy to achieve a
differentiation competitive advantage is Nike Inc.
Answer:
The origin of competitive advantage lies in the ability to identify and respond to
environmental change well in advance of competition.
Answer:
A strategy maximizes competitive advantage and minimizes competitive disadvantage.
Answer:
Strategic management is the set of managerial decisions that determines the short-term
performance of a corporation.
Answer:
Historically, competitive leadership in a market changes hands as one technology nears
the end of its S-curve.
Answer:
Standard operating procedures typically detail the various activities that must be carried
out to complete a corporation’s programs.
Answer:
General Electric led the transition from strategic planning to strategic management
during the 1980s.
Answer:
When Sony’s CEO, Howard Stringer, eliminated 10,000 jobs and closed 11 plants, he
was addressing the contraction phase of the turnaround strategy.
Answer:
To combat the increasing theft of company secrets, the U.S. government passed the
Economic Espionage Act in 1996.
Answer:
A 2011 McKinsey and Company survey found that less than 10 percent of a board’s
time is spent on strategy.
Answer:
In one study, 95% of the corporate officers interviewed stated that they use different
evaluation techniques for foreign and domestic operations.
Answer:
The justice approach to ethics proposes that actions and plans should be judged by their
consequences.
Answer:
Stability strategies can be very useful in the short run, but they can be dangerous if
followed for too long.
Answer:
The percentage of CEOs of the 100 largest companies who also serve as chairman of
the board is
A) less than 10%.
B) approximately 20%.
C) approximately 50%.
D) approximately 68%.
E) over 90%.
Answer:
Which one of the following is NOT part of the process of industry scenarios?
A) Examine possible shifts in societal variables.
B) Identify uncertainties in each of the six forces in the task environment.
C) Generate at least 15 scenarios.
D) Make a range of plausible assumptions about future trends.
E) Analyze the industry situation that would prevail under each scenario.
Answer:
Lean Six Sigma incorporates the statistical approach of Six Sigma with the lean
manufacturing program originally developed by Toyota.
Answer:
According to Goold and Campbell, which of the following is NOT one of the forms that
synergy can take?
A) shared know-how
B) coordinated strategies
C) value chain creation
D) pooled negotiating power
E) economies of scale or scope
Answer:
Underlying the BCG Growth Share Matrix is the concept of the
A) product life cycle.
B) industry life cycle.
C) market size.
D) experience curve.
E) industry profitability.
Answer:
Which financial ratio shows the return on all of the assets under its control regardless of
source of financing?
A) return on investment
B) return on equity
C) earnings per share
D) gross profit margin
E) net profit margin
Answer:
Which of the following is NOT descriptive of a high level of bargaining powers of
buyers?
A) Changing suppliers costs very little.
B) Alternative suppliers are plentiful because of standardization of the product.
C) The purchased product represents a high percentage of buyer’s costs.
D) The buyer buys a large proportion of the seller’s product or service.
E) A buyer earns high profits and is very insensitive to costs and service differences.
Answer:
Disadvantages of joint ventures include all of the following EXCEPT
A) loss of control.
B) lower profits.
C) probability of conflicts with partners.
D) likely transfer of technological advantage to the partner.
E) mutual dependence.
Answer:
Porter recommends that a division with tight cost control, frequent detailed control
reports, a well structured organization, and quantitatively based incentives is required
for which of the following generic competitive strategies?
A) focus
B) differentiation
C) cost leadership
D) focus differentiation
E) concentration
Answer:
Which of the following is an example of a global industry?
A) retailing
B) banking
C) tires
D) insurance
E) health care
Answer:
The ability for Nike to manufacture its own shoes and then build stores for distribution
is an example of
A) forward integration.
B) horizontal integration.
C) backward integration.
D) transferred integration.
E) mass integration.
Answer:
Which method of matching executive rewards to the accomplishment of strategic
objectives is particularly appropriate for measuring and rewarding the performance of
top SBU managers and group-level executives when performance factors and their
importance vary from one SBU to another?
A) strategic-funds method
B) segmentation method
C) long-term evaluation method
D) individual evaluation method
E) weighted-factor method
Answer:
The emphasis of strategic management is on
A) monitoring and evaluating external opportunities and threats in light of a
corporation’s strengths and weaknesses.
B) first line managers.
C) the short-run performance of the corporation.
D) an examination of the organization’s internal environment.
E) an investigation of competitor actions.
Answer:
The kind of strategic alliance in which a company forms a strong and close long-term
relationship for mutual advantage with a key supplier or distributor is the
A) joint venture.
B) licensing agreement.
C) value-chain partnership.
D) mutual service consortia.
E) holding company.
Answer:
Which kind of corporate strategy deals with the firm’s overall orientation toward
growth?
A) portfolio strategy
B) directional strategy
C) parenting strategy
D) cooperative strategy
E) functional strategy
Answer:
The existence of a performance gap
A) should cause management to question their objectives, strategies, and policies.
B) is not an indicator of problems if it only happens once.
C) is only the concern of top management because they set the original strategies.
D) should cause management to look only within the organization to determine the
problem.
E) should signal the immediate need for a layoff.
Answer:
In Christensen’s book, The Innovator’s Dilemma, he explains that managers remain with
certain technologies based on
A) return of investment.
B) net present value.
C) cost reduction.
D) total operating expenses.
E) time spent during technology implementation.
Answer:
Board members who are not employed by the corporation, but handle the legal or
insurance needs of the firm and are thus not true “outsiders,” are what kind of directors?
A) affiliated directors
B) family directors
C) retired directors
D) management directors
E) interlocked directors
Answer:
Three trends are evident in logistics: outsourcing, the use of the Internet, and
A) centralization.
B) downsizing.
C) logistical partnerships.
D) computerization.
E) containerized shipping.
Answer:
Morality is defined as
A) formal codes that permit or forbid certain behaviors.
B) a general rule of conduct of personal behavior, based on religious or philosophical
grounds.
C) consensually accepted standards of behavior for an occupation, trade, or profession.
D) imposing one’s morality upon another.
E) voluntary obligations assumed by an individual or organization.
Answer:
Which one of the following is NOT part of the process of MBO?
A) establishing and communicating organizational objectives
B) setting individual objectives that help implement organizational ones
C) reinforcing rules and regulations
D) developing an action plan of activities needed to achieve the objectives
E) periodically reviewing performance as it relates to the objectives
Answer:
Which of the following is NOT descriptive of a high level of bargaining power of
suppliers?
A) Substitutes are readily available.
B) The product or service is unique.
C) The supplier industry is dominated by a few companies, but sells too many.
D) The purchasing industry buys only a small portion of the supplier group’s goods and
services.
E) Suppliers are able to integrate forward and compete directly with their present
customers.
Answer:
According to Paul Nutt, a decision-making authority, what percent of decisions made
by managers are failures?
A) 10
B) 25
C) 50
D) 75
E) 90
Answer:
A set of sequential steps or techniques that describe in detail how a particular task or
job is to be done is referred to as
A) a standard operating procedure.
B) a systems operating procedure.
C) a standard operating program.
D) a standard outside procedure.
E) a systems operating plan.
Answer:
Executives with a particular mix of skills and experiences may be classified as an
executive type and paired with
A) a specific personal characteristic.
B) a specific corporate strategy.
C) a certain educational background.
D) a specific experience background.
E) a specific industry.
Answer:
The task environment
A) includes those elements or groups within an organization’s industry.
B) encompasses the physical working areas of the organization.
C) is an accounting of the many jobs within an organization.
D) is an advisory committee to top-management.
E) includes general forces that only indirectly affect an organization’s activities.
Answer:
Which of the following is an example of a policy?
A) Diversify product line to appeal to more people.
B) Increase sales by 10% over last year.
C) Pay highest salaries to keep high quality employees.
D) Develop and sell quality appliances worldwide.
E) Diversify from retailing into delivery.
Answer:
In a TOWS Matrix, WT Strategies
A) are generated by thinking of ways in which a company or business unit could use its
strengths to take advantage of opportunities.
B) attempt to take advantage of opportunities by overcoming weaknesses.
C) are basically defensive and primarily act to minimize weaknesses and avoid threats.
D) consider a company’s or unit’s strengths as a way to avoid threats.
E) are ways to get strategists to think “out of the box.”
Answer:
According to the utilitarian approach, CEOs give priority to the stakeholders who have
the most
A) power and largest holdings.
B) legitimacy and the best PR.
C) power, legitimacy, and urgency.
D) stability and legitimacy.
E) utility and power.
Answer:
The average benchmarking study may cost approximately ________, and involves 30
weeks of effort.
A) $5,000
B) $20,000
C) $50,000
D) $100,000
E) $500,000
Answer:
Which approach to ethical behavior can encourage selfish behavior when a person
defines a personal need or want as a “right”?
A) utilitarian
B) individual rights
C) justice approach
D) categorical imperative
E) moral relativism
Answer: