As defined in this course, a policy is
A) the purpose or reason for a corporation’s existence.
B) a statement of activities or steps needed to accomplish a single-use plan.
C) a broad guideline for making decisions that links the formulation of strategy with its
implementation.
D) a comprehensive master plan stating how a corporation will achieve its mission and
objectives.
E) a statement of a corporation’s programs in dollar terms.
Answer:
A company which pioneers an innovation is called a
A) technological follower.
B) technological opportunist.
C) technological leader.
D) technological manufacturer.
E) technological entrepreneur.
Answer:
According to Henry Mintzberg, the three most typical approaches to strategic decision
making are
A) entrepreneurial, adaptive, and planning.
B) entrepreneurial, logical incrementalism, and planning.
C) logical incrementalism, strategic planning, and systematic scanning.
D) environmental scanning, formulation, and implementation.
E) directive, rare, and consequential.
Answer:
Which financial ratio indicates the dividend rate of return to common shareholders at
the current market price?
A) return on equity
B) dividend yield on common stock
C) price/earnings ratio
D) dividend payout ratio
E) earnings per share
Answer:
A candidate for a fourth stage in corporate development is
A) conglomerate structure.
B) strategic business units.
C) divisional structure.
D) matrix structure.
E) hybrid structure.
Answer:
Research suggests that boards of directors tend to look outside the firm for the next
CEO under which following circumstance?
A) when the company is prosperous
B) when the company is having temporary difficulty
C) when the company is in trouble
D) when the company needs to follow a stability strategy
E) when the company needs to expand in order to continue growing
Answer:
The percentage of large U.S. corporations using nominating committees to identify
potential new directors is approximately
A) less than 6%.
B) 37%.
C) 57%.
D) 87%.
E) 97%.
Answer:
The triple bottom line refers to which of the following?
A) water, air, and oil.
B) footprints, finance, and environment.
C) physical environment, traditional profit/loss, and air.
D) traditional profit/loss, social responsibility, and environmental responsibility.
E) social responsibility, people, and ethics.
Answer:
The formula which indicates if a company embarking on a growth strategy will need to
take on debt to fund this growth is called
A) the return on investment.
B) the CAPM.
C) the index of sustainable growth.
D) operating cash flow.
E) the Z-value.
Answer:
From the perspective of the public, the primary job of the board of directors is
A) to lend credence to the decisions of the executive committee.
B) dictated solely by legal requirements.
C) to act as representatives for public identification.
D) to closely monitor the actions of management.
E) insulated from legal judgments because management actually makes the decisions.
Answer:
All of the following are true of annual reports EXCEPT
A) 80% of portfolio managers use annual reports when making decisions.
B) annual reports contain income statements and balance sheets.
C) annual reports contain cash flow statements.
D) annual reports contain all the information found in the 10-K form.
E) annual reports contain notes to the financial statements indicating why certain
actions were taken.
Answer:
Which of the following is NOT a reason why ERP could fail?
A) insufficient tailoring of the software to fit the company
B) inadequate training
C) simplicity of system
D) insufficient implementation support
E) all of the above
Answer:
The variables structure, culture, and resources pertain to the
A) external environment.
B) internal environment.
C) sociocultural forces.
D) task environment.
E) societal environment.
Answer:
All of the following reflect criticisms of the SWOT analysis EXCEPT
A) it uses no weights to reflect priorities.
B) it only requires a single level of analysis.
C) it provides a rational link to strategy implementation.
D) it uses ambiguity in words and phrases.
E) it generates lengthy lists.
Answer:
The speed with which other firms can understand the relationship of resources and
capabilities supporting a successful firm’s strategy is called
A) imitability.
B) reverse engineering.
C) transferability.
D) transparency.
E) durability.
Answer:
Which financial indicator is calculated by the ratio of annual dividends per share to
annual earnings per share?
A) dividend payout ratio
B) dividend yield on common stock
C) price/earnings ratio
D) return on investment
E) return on equity
Answer:
Intense supervision of labor, sustained capital investment and access to capital are
commonly required skills and resources for which of Porter’s generic competitive
strategies?
A) cost leadership
B) differentiation
C) cost leadership focus
D) differentiation focus
E) collusion
Answer:
According to Campbell, Goold, and Alexander, when parent companies create more
value than any of their rivals would if they owned the same businesses, they have
A) multi-point competition.
B) strategic advantage.
C) parenting advantage.
D) portfolio analysis.
E) no real advantage.
Answer:
Through market research, corporations can target their various products or services so
that management can discover what niches to seek or develop, and how to minimize
competitive pressure. This is descriptive of
A) marketing position.
B) product life cycle.
C) market segmentation.
D) marketing mix.
E) marketing leverage.
Answer:
A study of 30 firms revealed that outsourcing can lead to a ________ percent reduction
in costs.
A) 3
B) 9
C) 20
D) 30
E) 50
Answer:
Which of the following describes a turnaround strategy?
A) a form of divestment and is appropriate when corporate problems can be traced to
the poor performance of an SBU or product line
B) occurs when the corporation reduces the scope of some of its functional activities
and becomes “captive” to another firm
C) emphasizes improving operational efficiency and is appropriate when a corporation’s
problems are pervasive, but not yet critical
D) occurs when a corporation liquidates all its assets
E) involves adding different products or divisions to the corporation
Answer:
When the people managing diversified product lines in a functionally structured
corporation need more decision-making freedom than top management is willing to
delegate to them, 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:
Which one of the following is NOT one of the four general methods of managing two
different cultures?
A) separation
B) deculturation
C) integration
D) assimilation
E) segmentation
Answer:
An example of a company that did not blindly follow the prescriptions of a portfolio
model was
A) Apple.
B) Nike.
C) General Mills.
D) Dell.
E) IBM.
Answer:
The development of long-range plans for the effective management of environmental
opportunities and threats in light of corporate strengths and weaknesses is known as
A) strategy formulation.
B) strategy implementation.
C) strategy control.
D) strategy development.
E) strategy evaluation.
Answer:
Which external growth strategy involves two or more corporations joining in a stock
exchange and from which only one corporation survives?
A) mergers
B) strategic alliances
C) diversification
D) acquisitions
E) concentration
Answer:
Activity-based costing is a method of accounting which is very useful in making
outsourcing decisions by doing
A) total quality management.
B) value-chain analysis.
C) reengineering.
D) MBO.
E) benchmarking.
Answer:
A large, multidivisional business has three levels in its hierarchy of strategy:
A) Corporate Business Functional.
B) Environmental Corporate Functional.
C) Environmental Enterprise Corporate.
D) Business Divisional Functional.
E) Industry Corporate Divisional.
Answer:
With conglomerate diversification, the focus is on
A) product-market synergy.
B) sound investment and value-oriented management.
C) employee satisfaction.
D) similar product offerings.
E) market demand.
Answer:
A table which summarizes the key success factors within a particular industry is called
a(n)
A) EFAS Table.
B) IFAS Table.
C) SFAS Table.
D) TOWS Matrix.
E) industry matrix.
Answer: