Archives: Quiz

Honda Motor, long considered the industry’s fastest producer, fills a buyer’s new car order in just 5 days. Although bankruptcy can be an effective type of retrenchment strategy, it does not allow firms to avoid major debt obligations and to […]

The most effective strategic management is ritualistic, predictable and formal. Perhaps the greatest advantage of international operations to a firm is the ability to gain new customers for its products and services, thus increasing revenues. Answer: TRUE Sustainability reports reveal […]

Divestiture is selling all of a company’s assets, in parts, for their tangible worth. The tactic of focusing on higher-order issues involves recognizing that it is often possible to achieve similar results using different means or paths. Answer: FALSE The […]

While it is socially responsible to be a good steward of the natural environment, doing so will not enable a firm to gain competitive advantage. In the last five years, the position of chief strategy officer (CSO) has diminished in […]

People’s anxieties are raised with the thought of change because they fear economic loss, inconvenience, uncertainty and a break in normal social patterns. AT&T’s mission statement focuses on telephones rather than on communication. Answer: FALSE Firms, like organisms, must be […]

Horizontal integration is seeking ownership or increased control over competitors. Policies refer to specific guidelines, methods, procedures, rules, forms, and administrative practices established to support and encourage work toward stated goals. Answer: TRUE The rational change strategy is one that […]

When performing projected financial analysis, the balance sheet should be prepared before the income statement. By 2075, the United States will have no racial or ethnic majority. Answer: TRUE Major competitors’ strengths may represent key threats. Answer: TRUE Good ethics […]

A firm can usually serve two or more market segments with the same strategy. According to a study by the Institute of Business Ethics, companies that do not display ethical conduct consistently outperform companies that show a clear commitment to […]

Changes in the organization’s management, marketing, finance/accounting, production/operations, R&D, and MIS strengths and weaknesses should all be the focus of a revised EFE matrix in strategy evaluation. Successful strategists minimize their own political exposure on issues that are highly controversial […]

Firms can be more proactive with strategic management. Application of the strategic-management process is typically more formal in larger and well-established organizations. Answer: TRUE The work/family issue is strictly a women’s issue. Answer: FALSE Although growth in revenues and profits […]

Remaining solely domestic is an increasingly safer strategy for U.S. companies. While outsourcing manufacturing, tech support, and back-office work is quite common, it is still unheard of for companies to outsource product design. Answer: FALSE For a resource to be […]

A form of customer analysis is administering customer surveys. Organizing is the cornerstone of effective strategy formulation. Answer: FALSE It is an exaggeration to say that in an industry that is global, the riskiest possible posture is to remain a […]

JIT significantly increases the costs of implementing strategies. After decades of debate and struggle, firms have finally definitively determined the appropriate social policies. Answer: FALSE External audits attempt to identify key variables that offer actionable responses. Answer: TRUE Orphan drugs […]

Mexican workers expect and desire a work environment in which self-expression and initiative are encouraged. Successful strategy formulation generally rests upon the ability of an organization to sell some product or service. Answer: FALSE Vision and mission statements can often […]

The SWOT matrix is widely used as an organizational tool and, if used appropriately, does not have any limitations. Measuring organizational performance requires making changes to reposition a firm competitively for the future. Answer: FALSE The acquisition of security-software company […]

A force change strategy is plagued by low commitment and high resistance. Business ethics can be defined as principles of conduct within organizations that guide decision making and behavior. Answer: TRUE Corporate social policy should be designed and articulated during […]

On the x-axis of the IE Matrix, an internal factor evaluation score of 2.5 represents a weak internal position. More time and effort are required to identify and evaluate external trends and events in domestic corporations than in multinational ones. […]

Corporate social policy should be reaffirmed or changed during strategy implementation. Unlike strategy formulation, strategy implementation varies considerably among different types and sizes of organizations. Answer: TRUE The only reasons businesses have for determining their worth is preparing to be […]

According to Campbell and Yeung, an organization’s vision is associated with behavior and with the present. Deutsche Bank’s entrance into the casino business in Las Vegas is an example of related diversification. Answer: FALSE The size of the circle in […]

According to research, a healthier workforce can more effectively and efficiently implement strategies. A current trend in R&D management involves the lifting of the veil of secrecy whereby firms, even major competitors, are joining forces to develop new products. Answer: […]

Most firms warn managers and employees that reporting an ethical violation by others, also known as whistle-blowing, could cause them to be discharged. Increased costs are a disadvantage of a good information system. Answer: FALSE Although a firm’s power and […]

The drive to improve the efficiency of global business operations is leading to lesser functional specialization. Reengineering does not usually affect the organizational structure or chart, nor does it imply job loss or employee layoffs. Answer: TRUE Both military and […]

In strategy evaluation, a revised IFE matrix should indicate how effective a firm’s strategies have been in response to key opportunities and threats. Conservative strategies in a SPACE Matrix most often include product development, market development, market penetration and related […]

The first step for using Porter’s Five-Forces Model is to evaluate the relative strength of each competitive force. Economic factors do not have much impact on the attractiveness of strategies. Answer: FALSE To say U.S. firms are being challenged in […]

A forward integration strategy is used by firms to gain control or ownership of suppliers. It is always easier to say you are going to do something (strategy formulation) than to actually do it (strategy implementation). Answer: TRUE The firm […]

The most dramatic new market-segmentation strategy is the targeting of regional tastes. A new trend with regard to advertising products or services on the Internet is to base advertising rates solely on sales rates. Answer: TRUE Sustainability refers to the […]

Well-conceived and properly executed mission and vision statements do not need to be subject to revision. The I/O approach to competitive advantage advocates that internal factors are more important than external factors in a firm achieving competitive advantage. Answer: FALSE […]

An organization’s present strategies, objectives and mission provide a basis for generating and evaluating feasible alternative strategies, coupled with the external and internal audit information. Marketing research is the systematic gathering, recording and analyzing, of data about problems relating to […]

To objectively evaluate feasible alternative strategies identified in Stage 2, the QSPM uses input information derived from Stage 1. The focus of restructuring is changing the way work is actually carried out. Answer: FALSE It is unusual for the claims […]

Bargaining power of consumers is usually the most powerful of Porter’s five competitive forces. The most admired electronics company in 2011 was Tyco International. Answer: FALSE According to King and Cleland, carefully developed and written mission statements ensure unanimity of […]

Cash Cows represent the organization’s best long-run opportunities for growth and profitability. Resource allocation is included in strategy-formulation activities. Answer: TRUE Most companies favor related diversification strategies in order to exploit common use of a well-known brand name. Answer: TRUE […]

Most traditional retailers have tried in vain to use their online sales to boost in-store sales. Wild guesses should never be part of the planning process. Answer: TRUE Keeping informed about the number and the nature of competitors is easier […]

The U.S. furniture manufacturing industry is not yet greatly challenged by foreign competitors. According to Michael Porter, five competitive forces create vital opportunities and threats to organizations: 1) new entrants, 2) substitute products or services, 3) bargaining power of suppliers, […]

In the face of a deepening global recession, countries worldwide are resorting to protectionism to safeguard their own industries. To see and appreciate the world from the perspective of others has become a matter of survival for business. Answer: TRUE […]

The midpoint on the x-axis of a BCG Matrix is typically set at 0.05. The BCG Matrix requires more information about the divisions than the IE Matrix. Answer: FALSE Europeans are especially motivated by pay-for-performance, commission salaries, and objective measurement […]

The only costs involved in going public are the initial costs. Foreign banks currently operate and compete in most parts of the United States. Answer: FALSE Five major categories of external variables are: 1) economic forces, 2) social, cultural, demographic, […]

Protectionism refers to countries imposing tariffs, taxes, and regulations on firms outside the country to favor their own companies and people. Strategies may be inconsistent if policy problems and issues continue to be brought to the top for resolution. Answer: […]

Geographic distance and cultural differences are two of the factors that can make communication between domestic headquarters and overseas operations difficult. Strategists in multinational corporations are often confronted with the need to be globally competitive and nationally responsive at the […]

Four common approaches to determine R&D budget allocations are: 1) finance as many project proposals as possible; 2) use a percentage-of-sales method; 3) budget for R&D about what competitors spend; or 4) decide how many successful new products are needed […]

The element of surprise provides great competitive advantages in both military and business strategy. Additional capital is often required for successful strategy implementation. Answer: TRUE Retrenchment and turnaround are the same strategy. Answer: TRUE The middle manager is the most […]

Each year, Fortune publishes strategy-evaluation research on both the United States and other countries. In a multidivisional firm, objectives should be established for the overall company but not for each division. Answer: FALSE Only 15 percent of formulated strategies are […]

White knight is a term that refers to a firm that agrees to acquire another firm when the other firm is facing a hostile takeover by some company. A differentiation strategy can be especially attractive when the industry has many […]

The first step in the process of developing a mission statement is to ask all participants to prepare what they believe the organization’s mission should be. The operating philosophy of organizations should be to develop a product and then try […]

One of the fundamental strategy evaluation activities is reviewing external and internal factors that are the bases for current strategies. Segmentation often reveals that large, random fluctuations in demand actually consist of several small, predictable, and manageable patterns. Answer: TRUE […]

“If it ain’t broke, don’t fix it” refers to managing by crisis. Measuring organizational performance includes comparing expected results to actual results, investigating deviations from plans, evaluating individual performance, and examining progress being made toward meeting stated objectives. Answer: TRUE […]

An important question a mission statement should answer is, “What do we want to become?” Having no temporal qualities, the BCG Matrix is a snapshot of an organization at a given point in time. Answer: TRUE Industry analysis is also […]

Motor vehicle firms in the United States are vulnerable when the value of the dollar falls. Optimizing for tomorrow the trends of today is the purpose of strategic management. Answer: FALSE Financial ratios are rarely used as criteria to evaluate […]

Culture includes the set of shared values, beliefs, attitudes, customs, norms, personalities, heroes, and heroines that describe a firm. Organizations never develop their own projections. Answer: FALSE Making many intuitive decisions that conflict with the formal plan is one pitfall […]

Martin Manufacturing has implemented several programs to improve its productivity. They have asked you to evaluate the firm’s productivity by comparing this year’s performance with last year’s. The following data are available: Has Martin Manufacturing improved its productivity during the […]

A financial advisor is about to build an investment portfolio for a client who has $100,000 to invest. The four investments available are A, B, C, and D. Investment A will earn 4 percent and has a risk of two […]