The document contains a chapter quiz on strategic management concepts including external analysis, competitive forces, international business challenges, and forecasting methods. It tests understanding of concepts like Porter's five forces model, reasons for shifts in foreign direct investment, and appropriate forecasting approaches given certain conditions. Correct answers are provided for multiple choice questions testing comprehension of strategic management terminology and theories.
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Sm quiz
1. Chapter 1 Quiz
1. The term _________ is used to refer to strategy formulation, implementation, and
evaluation, with _________referring only to strategy formulation.
strategic planning; strategic management
assessment; planning
strategic management; strategic planning
management cycle; brainstorming
Correct Answer:strategic management; strategic planning
2. Which of these requires a firm to establish annual objectives, devise policies, and
allocate resources?
Strategy formulation
Strategy implementation
Strategy manipulation
Strategy evaluation
3.The rationale for periodically conducting strategic-management meetings away from
the work site is to encourage more _____________ and ____________ among
participants.
feedback; rigidity
creativity; candor
confidence; self-interest
strategy evaluation; candor
4.Anything that a firm does especially well compared to rival firms is referred to as:
competitive advantage.
comparative advantage.
an external opportunity.
opportunity cost.
5.Both military and business organizations do all of the following except:
use of the element of surprise.
Aim "to gain competitive advantage."
use the assumption of conflict to develop strategies.
use their own strengths to exploit competitors' weaknesses.
6.__________ are the individuals who are most responsible for the success or failure of
an organization.
Ethics officers
Operatives
Consultants
Strategists
7.A disadvantage of international operations is:
foreign operations can allow firms to establish low-cost production
2. facilities in locations close to raw materials and/or cheap labor.
economies of scale can be achieved from operation in global rather than
solely domestic markets.
competitors in foreign markets may not exist.
Language, culture, and value systems differ among countries, causing
communication barriers and problems managing people.
8.The problem of limited resources within a firm makes ______________ particularly
important as the firm decides how to allocate its resources.
strategy formulation
strategy implementation
long-range planning
short-range planning
9.All of these are pitfalls an organization should avoid in strategic planning except:
using strategic planning to gain control over decisions and resources.
failing to involve key employees in all phases of planning.
hastily moving from mission development to strategy formulation.
using plans as a standard for measuring performance.
10.The process of conducting research and gathering and assimilating external
information is called:
lobbying.
industry analysis.
long-range planning.
mission development.
11.The term strategic planning refers only to strategy formulation.
True
False
12.The action stage of strategic management is called strategy formulation.
True
False
13.Three fundamental strategy evaluation activities are reviewing external and internal
factors, measuring performance, and taking corrective actions.
True
False
14.Strategies can be defined as specific results that an organization seeks to achieve in
pursuing its basic mission.
True
False
15.Reasons for poor or no strategic planning on part of firms include overconfidence, too
expensive, suspicion, and laziness.
True
False
16.In a multidivisional firm, objectives should be established for the overall company and
not for each division.
3. True
False
17.An organization can pursue any and/or all strategies that potentially could benefit the
firm.
True
False
18.Communication is an act of strengthening employees' sense of effectiveness by
encouraging them to participate in decision making and to exercise initiative and
imagination, and rewarding them for doing so.
True
False
19.Given that formality creates flexibility and creativity, managers must be very formal in
strategic planning.
True
False
20.One pitfall to avoid in strategic planning is top management making many intuitive
decisions that conflict with formal planning.
True
False
Identify and describe the three stages of the strategic-management process. Give
reasons within your answer to describe why each of these stages is important in strategic
management.
Answers
1.Correct Answer: strategic management; strategic planning
2.Correct Answer: Strategy implementation
.
3.Correct Answer: creativity; candor
4. Correct.: competitive advantage.
5.Correct Answer: use the assumption of conflict to develop strategies.
6.Correct Answer: Strategists
4. .
7.Correct Answer: language, culture, and value systems differ among countries, causing
communication barriers and problems managing people.
8.Your Answer: strategy formulation
Correct.
9.Correct Answer: using plans as a standard for measuring performance.
.
10.Correct Answer: industry analysis.
11.True
Correct.
12.Correct Answer:
False
Incorrect. Strategy implementation is called the action stage.
13.True Correct.
14.Correct Answer:
False
15.Incorrect. Strategies are the means by which long-term objectives will be achieved.
Correct Answer:
True
16.Incorrect. Some firms do not engage in strategic planning due to overconfidence, too
expensive, suspicion, and laziness.
False
Correct.
17.Correct Answer:
False
Incorrect. No organization can pursue all the strategies that potentially could benefit the
firm.
5. 18.Correct Answer:
False
Incorrect. Empowerment is the act of strengthening employees' sense of effectiveness by
encouraging and rewarding them to participate in decision making and exercise initiative and
imagination.
19.Correct Answer:
False
Incorrect. Managers that are very formal in strategic planning can stifle flexibility and
creativity.
20.True
Correct.
21. Identify and describe the three stages of the strategic-management process.
Give reasons within your answer to describe why each of these stages is important in strategic
management.
Your Answer:
(blank)
22. What is sustained competitive advantage? Define this concept and explain how a
firm can achieve it. Why is it important in strategic management?
Your Answer:
(blank)
23. How do external opportunities and threats differ in their strategic implications
from those of internal strengths and weaknesses? Be sure to include in your answer a brief
description of each of these four terms.
Your Answer:
(blank)
24. What is the strategic-management model? What does it represent? Describe
several characteristics of the strategic-management process based on what you understand
about the strategic-management model.
Your Answer:
(blank)
25. Describe the concept of empowerment. How is empowerment related to the
decentralization of the strategic-management process?
Your Answer:
(blank)
6. Chapter 2
The operating ______ of organizations should be to identify customersÕ' needs and then
provide a product or service to fulfill those needs.
philosophy
culture
self-concept
concern for public image
Carefully prepared _____________ and ____________ are widely recognized by both
practitioners and academicians as the first step in strategic management.
long-term objectives; goals
creeds; long-term objectives
vision statements; mission statements
short-term objectives; long-term objectives
The vision and mission statement can often be found:
on supplier invoices.
in a competitive market analysis.
on the front of annual reports.
in the SEC report.
It is important to involve ______________ in the process of developing a mission
statement.
only those managers who will use the mission
very few people to ease consensus-building
as many managers as possible
as wide a variety of upper-level managers as possible
Which of the following is not one of the reasons identified by King and Cleland for
carefully developing a written mission?
To ensure ambiguity of purpose within the organization
To establish a general tone or organizational climate
To provide a basis for allocating organizational resources
To facilitate the translation of objectives into a work structure involving the
assignment of tasks to responsible elements within the organization
During strategy _________, corporate social policy should be set and administered.
formulation
control
evaluation
implementation
What is the recommended length of an effective mission statement?
Less than 200 words
One sentence of 10 to 20 words
7. There is no recommendation. It can be as long as the management wants.
One page
A study by Rarick and Vitton found that firms with a formalized mission statement have
the average return on shareholdersÕ' equity compared to those firms without a
formalized mission statement.
twice
five times
half
one quarter
A good operating philosophy of organizations should be to ________ and then
_________.
identify customersÕ' needs; provide a product or service to fulfill them
develop a market; identify a customer base
take an environmental orientation first; take a customer orientation
develop a product or service; identify a market for the product or service
Which of the following is a question that an effective mission statement answers?
Is the firm technologically current?
What is the company we want to be in the long-range future?
What is our net worth?
What is our profitability?
The vision statement should be short, preferably one sentence.
True
False
Commitment to a companyÕ's strategy and intellectual agreement on the strategies to be
pursued do not necessarily translate into an emotional bond.
True
False
The highest level of managers should develop the vision statement, which should be
concise.
True
False
Each division of a multidivisional organization should develop a mission statement.
True
False
Stakeholders of an organization include stockholders, customers and creditors, but not
the competitors.
True
False
Developing a comprehensive mission statement is important because divergent views
can be revealed and resolved through the process.
True
False
8. An effective mission statement should include five components.
True
False
During strategy formulation, social policy should be reaffirmed and changed.
True
False
A mission statement should be specific and thus encourage the creative potential for the
organization.
True
False
The term social policy embraces managerial philosophy and thinking at the highest levels
of an organization.
True
False
What is the purpose of a mission statement? Differentiate between a mission and a vision
statement.
Many organizations develop both a mission statement and a vision statement. Whereas the
mission statement answers the question Ò"What is our business?Ó" the vision statement
answers the question Ò"What do we want to become?Ó" Students should refer to Ò"What Is Our
Business?Ó" and Ò"Vision Versus MissionÓ" for more information related to this question. These
sections are located on pages 59-60.
Why are the vision and mission statements important to a given organization? Why are
they important to effective strategic management? Cite several reasons organizations should
carefully develop a written mission statement.
King and Cleland recommend that organizations carefully develop a written mission
statement. They provide several reasons stated in the text. These include ensuring unanimity of
purpose within the organization, providing a basis for allocating resources, establishing a general
organizational climate, serving as a focal point for identification with the organizationÕ's purpose
and direction, and others. Students should refer to the importance of vision and mission
statements on pages 61-62 in developing their answers.
Why is the resolution of divergent views important in an organization? How can the
development of a mission statement help the organization to achieve this? What could happen if
considerable disagreement over the vision and mission of a firm is not resolved?
9. The resolution of divergent views is important in any organization. It is more important to
build consensus on the mission and vision of the firm than to make compromises that do not
represent the views of either party. If left unresolved, divergent views can lead to constant
disagreements among the organizationÕ's strategists. Students may refer to a resolution of
divergent views on pages 62-64 for more information.
What does it mean to reflect the anticipations of customers? How can a company
incorporate this idea when developing its mission statement?
A good mission statement reflects the anticipations of customers. Rather than developing
a product and then trying to find a market, the operating philosophy of organizations should be to
identify customersÕ' needs and then provide a product or service to fulfill those needs. This is
part of establishing a customer orientation instead of a product orientation or specific service
orientation. A major reason for developing a mission statement is to attract customers who give
meaning to an organization. For more regarding this question, students may refer to a customer
orientation on pages 66-68.
List and explain the nine essential components of a mission statement. Why are these
important?
The mission statement is often the most visible and public part of the strategic-
management process. There are nine critical components that should be included in the mission
statement. They can be addressed by asking several questionsÑ-who, what, where, how much,
or what. Students should identify all nine componentsÑ-customers, products, markets,
technology, concern for survival, growth and profitability, philosophy, self-concept, concern for
public image, and concern for employees. Students can refer to mission statement components
on page 70 for more information related to this question.
10. Your Results for "Chapter Quiz"
1.
Your Answer: philosophy
Correct.
2.
Your Answer: long-term objectives; goals
Correct Answer:vision statements; mission statements
Incorrect. The correct answer is vision statements; mission statements.
3.
Your Answer: in a competitive market analysis.
Correct Answer:on the front of annual reports.
Incorrect. The correct answer is on the front of annual reports.
4.
Your Answer: only those managers who will use the mission
Correct Answer:as many managers as possible
Incorrect. The correct answer is as many managers as possible.
5.
Correct Answer:To ensure ambiguity of purpose within the organization
6.
11. Your Answer: implementation
Correct.
7.
Your Answer: Less than 200 words
Correct.
8. .
Correct Answer:twice
Incorrect. The correct response is twice.
9.
Your Answer: identify customersÕ' needs; provide a product or service to fulfill them
Correct.
10.Your Answer: Is the firm technologically current?
Correct.
11.
Your Answer:
True
Correct.
12.
Correct Answer:
True
Incorrect. This does not necessarily translate into an emotional bond; hence, strategies
that have been formulated may not be implemented.
13.
Correct Answer:
False
Incorrect. As many managers as possible should have input into developing the vision
statement.
14.
Correct Answer:
12. True
Incorrect. Each division of a multidivisional organization should develop a mission
statement.
15.
Your Answer:
False
Correct.
16.
Your Answer:
True
Correct.
17.
Correct Answer:
False
Incorrect. An effective mission statement should include nine components.
18.
Correct Answer:
False
Incorrect. It should be changed during strategy evaluation.
19.
Correct Answer:
False
Incorrect. A good mission statement should not be too specific; otherwise, it could stifle
the potential for creative growth for the organization.
20.
Your Answer:
True
Correct.
13. Chapter 3 Chapter Quiz
According to I/O theorists, which of the following contributes least to firm performance?
Internal resources
Economies of scale
Barriers to market entry
Product differentiation
The external audit is aimed at:
taking advantage of potential threats and minimizing external opportunities.
developing an exhaustive list of factors that could influence the business.
identifying key variables that offer actionable responses.
developing an infinite list of opportunities that could benefit a firm.
Which of the following is not a misperception about business intelligence that prevails
among American executives today?
Running an intelligence program requires lots of people, computers, and other
resources.
Business is not equal to espionage.
Intelligence gathering is an unethical business practice.
Collecting intelligence about competitors violates antitrust laws.
__________ are the results of a low value of the dollar.
Lower imports and higher exports
Lower imports and lower exports
Higher imports and higher exports
Higher imports and lower exports
has replaced as the world's hottest destination for foreign direct investment.
Great Britain; China
Great Britain; the United States
The United States; China
China; the United States
_______________ and ______________ are creating similar patterns of consumption in
diverse cultures worldwide.
Tax harmonization; legal factors
Distinct domestic markets; the climate for international business
Mass communication; high technology
14. Corporate tax breaks; mass communication
Many businesses use _____________ to obtain most of their information on competitors
because it is fast, thorough, and accurate.
past performance
the Internet
SEC reports
other firms' mission statements
All of these, except__________, are part of Porter's competitive forces in industry
analysis.
potential entry of new competitors
bargaining power of suppliers
development of substitute products
bargaining power of unions
In its simplest sense, the international challenge faced by U.S. business is twofold:
how to increase exports to other countries and how to increase imports
from other countries.
how to defend domestic markets against imported goods while minimizing exports.
how to maximize exports to other nations and how to defend domestic markets against
imported goods.
how to minimize imports and exports in domestic markets and slowly decrease
globalization.
_______________ are most appropriate when historical data are available and when the
relationships among key variables are expected to remain the same in the future.
Qualitative forecasts
Econometric model analyses
Quantitative forecasts
A scenario forecast
Five major categories of external variables are: (1) economic forces, (2) social and
cultural forces, (3) political, governmental and legal forces, (4) technological forces and (5)
demographic forces.
True
15. False
Significant and unequal effects on companies in different industries and in different
locations come from trends in the dollar's value.
True
False
The absence of a legal system deters firms from initiating business with China.
True
False
Research findings suggest that approximately 36 percent of a firm's profitability can be
explained by the industry, whereas 20 percent is attributed to the firm's internal factors.
True
False
Nine out of 10 large companies have employees dedicated solely to gathering
competitive intelligence.
True
False
Acquisition is essential to growth in the most competitive companies.
True
False
Bargaining power of consumers is usually the most powerful of Porter's five competitive
16. forces.
True
False
Many large multinational firms are moving out of EU member-countries into Switzerland
and Ireland to avoid costs associated with tax harmonization.
True
False
Poor infrastructure and little respect for legal contracts are two risks that still restrain firms
from initiating business with China.
True
False
Based on the best information at the time, assumptions serve as checkpoints on the
validity of strategies.
True
False
Identify the five broad categories of external forces. Which two do you think are the most
important for a firm that specializes in government contracts for the military? Support your
response.
To create paragraphs in your essay response, type <p> at the beginning of the
paragraph, and </p> at the end.
Briefly explain the rationale behind the industrial organization (I/O) approach to
competitive advantage. Do you agree with this approach?
To create paragraphs in your essay response, type <p> at the beginning of the
18. Your Results for "Chapter Quiz"
Print this page
Site Title: Strategic Management: Concepts and Cases, 11E
Book's Title: Strategic Management: Concepts and Cases, 11th Edition
Book's Author: David
Location on Site: Chapter 3 > Chapter Quiz
Date/Time Submitted:
October 27, 2008 at 1:06 AM (EDT)
Summary of Results
45% Correct of 20 scored items: 9 correct: 45%
11 incorrect: 55%
5 questions not scored. 20 scored questions.
More information about scoring
1. According to I/O theorists, which of the following contributes least to firm
performance?
Your Answer: Internal resources
Correct.
2. The external audit is aimed at:
Your Answer: taking advantage of potential threats and minimizing external opportunities.
19. Correct Answer:identifying key variables that offer actionable responses.
Incorrect. The correct answer is identifying key variables that offer actionable responses.
3. Which of the following is not a misperception about business intelligence that
prevails among American executives today?
Your Answer: Running an intelligence program requires lots of people, computers, and other
resources.
Correct Answer:Business is not equal to espionage.
Incorrect. This is a misperception about business intelligence. The correct answer is that
business is not equal to espionage.
4. __________ are the results of a low value of the dollar.
Your Answer: Lower imports and higher exports
Correct.
5. has replaced as the world's hottest destination for foreign direct investment.
Your Answer: Great Britain; the United States
Correct Answer:China; the United States
Incorrect. The correct answer is China; the United States.
6. _______________ and ______________ are creating similar patterns of
consumption in diverse cultures worldwide.
Your Answer: Mass communication; high technology
Correct.
7. Many businesses use _____________ to obtain most of their information on
competitors because it is fast, thorough, and accurate.
Your Answer: other firms' mission statements
Correct Answer:the Internet
Incorrect. The correct answer is the Internet.
8. All of these, except__________, are part of Porter's competitive forces in industry
analysis.
Your Answer: bargaining power of unions
20. Correct.
9. In its simplest sense, the international challenge faced by U.S. business is
twofold:
Your Answer: how to minimize imports and exports in domestic markets and slowly decrease
globalization.
Correct Answer:how to maximize exports to other nations and how to defend domestic markets
against imported goods.
Incorrect. The correct answer is how to maximize exports to other nations and how to
defend domestic markets against imported goods.
10. _______________ are most appropriate when historical data are available and
when the relationships among key variables are expected to remain the same in the future.
Your Answer: Quantitative forecasts
Correct.
11. Five major categories of external variables are: (1) economic forces, (2) social
and cultural forces, (3) political, governmental and legal forces, (4) technological forces and (5)
demographic forces.
Your Answer:
True
Correct Answer:
False
Incorrect. The five categories are: (1) economic forces, (2) social, cultural, demographic,
and environmental forces, (3) political, governmental, and legal forces, (4) technological forces,
and (5) competitive forces.
12. Significant and unequal effects on companies in different industries and in
different locations come from trends in the dollar's value.
Your Answer:
True
Correct.
13. The absence of a legal system deters firms from initiating business with China.
Your Answer:
False
Correct Answer:
True
21. Incorrect. The absence of a legal system is one among several serious risks that still
deters firms from initiating business with China.
14. Research findings suggest that approximately 36 percent of a firm's profitability
can be explained by the industry, whereas 20 percent is attributed to the firm's internal factors.
Your Answer:
False
Correct.
15. Nine out of 10 large companies have employees dedicated solely to gathering
competitive intelligence.
Your Answer:
False
Correct Answer:
True
Incorrect. Nine out of 10 large companies have employees dedicated solely to gathering
competitive intelligence.
16. Acquisition is essential to growth in the most competitive companies.
Your Answer:
True
Correct Answer:
False
Incorrect. Acquisition is essential to growth; the most successful purchases are in niches
that add a technology or a related market.
17. Bargaining power of consumers is usually the most powerful of Porter's five
competitive forces.
Your Answer:
False
Correct.
18. Many large multinational firms are moving out of EU member-countries into
Switzerland and Ireland to avoid costs associated with tax harmonization.
Your Answer:
False
Correct Answer:
True
22. Incorrect. Many large multinational firms are moving out of EU member-countries into
Switzerland and Ireland to avoid costs associated with tax harmonization.
19. Poor infrastructure and little respect for legal contracts are two risks that still
restrain firms from initiating business with China.
Your Answer:
True
Correct.
20. Based on the best information at the time, assumptions serve as checkpoints on
the validity of strategies.
Your Answer:
False
Correct Answer:
True
Incorrect. Based on the best information at the time, assumptions serve as checkpoints
on the validity of strategies.
21. Identify the five broad categories of external forces. Which two do you think are
the most important for a firm that specializes in government contracts for the military? Support
your response.
Your Answer:
sdas
The five broad categories include economic forces; social, cultural, demographic, and
environmental forces; political, governmental, and legal forces; technological forces; and
competitive forces. The two that would likely be most directly important to a firm that did
government contract work to support the military would be technological forces and the political,
governmental, and legal forces. Students should refer to key external forces on page 83 for more
information.
22. Briefly explain the rationale behind the industrial organization (I/O) approach to
competitive advantage. Do you agree with this approach?
Your Answer:
sa
In the first part of the answer, students should explain that the I/O approach advocates
that external (industry) factors are more important that internal factors in a firm achieving
competitive advantage. Competitive advantage is determined largely by competitive positioning
within an industry. In the second part of the response, students should demonstrate an
understanding of the I/O view as separate and distinct from other views on competitive
advantage.
23. 23. Explain the importance of technological forces for a firm. Identify some recent
technological forces that have been factors in how companies compete in a particular industry
and explain how those forces affected competition.
Your Answer:
sda
Revolutionary technological changes and discoveries are having a dramatic impact on
organizations. Superconductivity, for instance, has revolutionized transportation, utility,
healthcare, electrical, and computer industries. The Internet is another example. Students should
offer several examples and may refer to technological forces on page 93 in the text for further
explanation on this topic.
24. Differentiate between market commonality and resource similarity. What is meant
by each of these terms? How are they used?
Your Answer:
asd
Market commonality and resource similarity are used to study rivalry among competitors.
Market commonality can be defined as the number and significance of markets that a firm
competes in with rivals. Resource similarity is the extent to which the type and amount of a firm's
internal resources are comparable to a rival. Students may refer to market commonality and
resource similarity on page 99 for more information regarding this question.
25. What is the Competitive Profile Matrix? How is it used? What factors are included
in this analysis?
Your Answer:
dsa
The Competitive Profile Matrix (CPM) identifies a firm's major competitors and its
particular strengths and weaknesses in relation to a sample firm's strategic position. Critical
success factors in a CPM include both internal and external issues. Factors often included in this
analysis include breadth of product line, effectiveness of sales distribution, proprietary or patent
advantages, location, production capacity and efficiency, experience, union relations,
technological advantages, and e-commerce expertise. Students should refer to the Competitive
Profile Matrix (CPM) on pages 111-112.
E-mail Your Results
My name is (first last):
E-mail my results to:
E-mail address:
Send as:
Me:
25. The five functions of management are planning, organizing, _________, staffing, and
controlling.
rewarding
communicating
implementing
motivating
A standardized, detailed set of techniques and behaviors that manage anxieties but
seldom produce intended, technical consequences of practical importance is a:
ritual.
saga.
metaphor.
rite.
__________ ratios measure managementÕ's overall effectiveness as shown by the
returns generated on sales and investment.
Liquidity
Profitability
Growth
Leverage
The internal resource categories used in the resource-based approach are physical
resources, human resources, and:
financial resources.
natural resources.
technological resources.
organizational resources.
26. Americans place a high priority on __________ whereas many foreigners do not.
material wealth
family
relationships
silence
Staffing involves all of these activities except:
recruiting.
managing union relations.
customer analysis.
training and developing.
Which of the following ties all business functions together and provides the basis for all
managerial decisions?
Management
Marketing
Information
Technology
A _____________ receives raw material from both the external and internal evaluation of
an organization.
management information system
data transformer
quality control mechanism
process function system
In China, activities involve concern for guanxi, or personal relations.
True
False
27. The process of performing an internal audit closely parallels the process of performing an
external one.
True
False
The basic premise of the RBV is that the mix, type, amount, and nature of a firmÕ's
internal resources should be considered secondarily in devising strategies that can lead to
sustainable competitive advantage.
True
False
Synergy is the 2 + 2 = 5 effect.
True
False
Sometimes an organization will pursue a backward integration strategy primarily to gain
better control over prices charged to consumers.
True
False
An opportunity analysis is an appraisal of the costs, benefits and risks associated with
decisions.
True
False
An example of activity ratios is the times-interest-earned ratio.
28. True
False
Capacity decisions concern the design of the physical production system.
True
False
In the value chain, total revenues minus total costs of all activities undertaken to develop
and market a product or service yields value.
True
False
Internal R&D and contract R&D are the two basic forms of R&D in organizations.
True
False
Describe the process of performing an internal audit. What are the goals of an internal
audit?
To create paragraphs in your essay response, type <p> at the beginning of the
paragraph, and </p> at the end.
What is the resource-based view? Describe this approach to competitive advantage and
explain its general reasoning.
To create paragraphs in your essay response, type <p> at the beginning of the
paragraph, and </p> at the end.
30. Your Results for "Chapter 4: The Internal Assessment"
Print this page
Site Title: Strategic Management: Concepts and Cases, 11E
Book's Title: Strategic Management: Concepts and Cases, 11th Edition
Book's Author: David
Location on Site: Chapter 4 > Chapter 4: The Internal Assessment
Date/Time Submitted:
October 27, 2008 at 1:09 AM (EDT)
Summary of Results
45% Correct of 20 scored items: 9 correct: 45%
11 incorrect: 55%
5 questions not scored. 20 scored questions.
More information about scoring
1. A firmÕ's strengths that cannot be easily matched or imitated by competitors are
called:
Your Answer: external opportunities.
Correct Answer:distinctive competencies.
Incorrect. The correct answer is distinctive competencies.
2. ___________ can inhibit strategic management, for example, by leading
managers to miss the significance of changing external conditions.
Your Answer: Market segmentation
Correct Answer:Culture
Incorrect. The correct answer is culture.
3. The five functions of management are planning, organizing, _________, staffing,
and controlling.
Your Answer: motivating
31. Correct.
4. A standardized, detailed set of techniques and behaviors that manage anxieties
but seldom produce intended, technical consequences of practical importance is a:
Your Answer: metaphor.
Correct Answer:ritual.
Incorrect. The correct answer is ritual.
5. __________ ratios measure managementÕ's overall effectiveness as shown by
the returns generated on sales and investment.
Your Answer: Growth
Correct Answer:Profitability
Incorrect. The correct answer is profitability.
6. The internal resource categories used in the resource-based approach are
physical resources, human resources, and:
Your Answer: organizational resources.
Correct.
7. Americans place a high priority on __________ whereas many foreigners do not.
Your Answer: silence
Correct Answer:material wealth
Incorrect. The correct answer is material wealth.
8. Staffing involves all of these activities except:
Your Answer: customer analysis.
Correct.
9. Which of the following ties all business functions together and provides the basis
for all managerial decisions?
Your Answer: Information
Correct.
10. A _____________ receives raw material from both the external and internal
32. evaluation of an organization.
Your Answer: process function system
Correct Answer:management information system
Incorrect. The correct answer is management information system.
11. In China, activities involve concern for guanxi, or personal relations.
Your Answer:
True
Correct.
12. The process of performing an internal audit closely parallels the process of
performing an external one.
Your Answer:
True
Correct.
13. The basic premise of the RBV is that the mix, type, amount, and nature of a
firmÕ's internal resources should be considered secondarily in devising strategies that can lead
to sustainable competitive advantage.
Your Answer:
False
Correct.
14. Synergy is the 2 + 2 = 5 effect.
Your Answer:
False
Correct Answer:
True
Incorrect. Synergy refers to the 2 + 2 = 5 effect.
15. Sometimes an organization will pursue a backward integration strategy primarily
to gain better control over prices charged to consumers.
Your Answer:
False
Correct.
33. 16. An opportunity analysis is an appraisal of the costs, benefits and risks associated
with decisions.
Your Answer:
False
Correct Answer:
True
Incorrect. An opportunity analysis is an appraisal of the costs, benefits and risks
associated with decisions.
17. An example of activity ratios is the times-interest-earned ratio.
Your Answer:
False
Correct.
18. Capacity decisions concern the design of the physical production system.
Your Answer:
True
Correct Answer:
False
Incorrect. Process decisions concern the design of the physical production system.
19. In the value chain, total revenues minus total costs of all activities undertaken to
develop and market a product or service yields value.
Your Answer:
False
Correct Answer:
True
Incorrect. In the value chain, total revenues minus total costs of all activities undertaken
to develop and market a product or service yields value.
20. Internal R&D and contract R&D are the two basic forms of R&D in organizations.
Your Answer:
False
Correct Answer:
True
Incorrect. The two basic forms of R&D in organizations are internal R&D and contract
R&D.
34. 21. Describe the process of performing an internal audit. What are the goals of an
internal audit?
Your Answer:
asda
The process of performing an internal audit closely parallels the process of performing an
external audit. The internal audit requires gathering and assimilating information about the firmÕ's
management, marketing, finance/accounting, production/operations, research and development,
and management information systems operations. Key factors should be prioritized so that the
firmÕ's most important strengths and weaknesses can be determined collectively. Students may
refer to the process of performing an internal audit on page 123.
22. What is the resource-based view? Describe this approach to competitive
advantage and explain its general reasoning.
Your Answer:
das
The RBV approach to competitive advantage contends that internal resources are more
important for a firm than external factors in achieving and sustaining competitive advantage.
According to its proponents, organizational performance will primarily be determined by internal
resources that can be grouped into three all-encompassing categories: physical, human, and
organizational resources. Students may refer to the Resource-Based View (RBV) on page 125.
23. Compare and contrast U.S. firms with European firms. Why do the management
styles, workplace norms, and other factors of work life differ in Europe from the U.S.?
Your Answer:
sa
In Europe, most workers are unionized and enjoy more frequent vacations and holidays
than U.S. workers. A 90-minute lunch break plus 20-minute morning and afternoon breaks are
common in European firms. Also, guaranteed permanent employment is commonly a part of the
typical European employment contract. Students can refer to U.S. versus foreign cultures on
page 128 for more information.
24. What does it mean for a manager to be motivating? What affects morale and
employee satisfaction?
Your Answer:
as
Motivating can be defined as the process of influencing people to accomplish specific
objectives. Motivation explains why some people work hard and others do not. The motivating
function of management includes at least four major components: leadership, group dynamics,
communication, and organizational change. Refer to motivating on page 134 for more
information.
25. Identify and describe the Internal Factor Evaluation (IFE) Matrix. What is its
purpose in strategic management?
36. Home Chapter 5 Chapter Quiz
Chapter Quiz
This activity contains 25 questions.
__________ is based on the belief that the true measure of a really good strategist is the
ability to solve problems.
Managing by subjectives
Managing by extrapolation
Managing by crisis
Managing by hope
Long-term objectives are needed at the ____________ of an organization.
corporate and divisional levels
corporate levels
corporate, divisional, and functional levels
divisional and functional levels
__________ bankruptcy applies to municipalities.
Chapter 7
Chapter 9
Chapter 11
Chapter 12
37. Many, if not most, organizations pursue a:
concentric diversification.
combination strategy.
geographic strategy.
product development strategy.
An example of _____________ strategy is establishing Web sites to sell products directly
to consumers.
backward integration
conglomerate diversification
horizontal integration
forward integration
Which of the following is not a guideline for pursuing liquidation?
When divestiture has not been successful
When an organizationÕ's only alternative is bankruptcy
When the stockholders of the firm can minimize their losses by selling the firmÕ's assets
When the organization has successfully pursued retrenchment
A popular strategy that occurs when two or more companies form a temporary
partnership for the purpose of capitalizing on some opportunity is called a(n):
merger.
joint venture.
acquisition.
takeover.
All of the following situations are conducive to market penetration except _________.
when current markets are not saturated with a particular product or
service
when the usage rate of present customers could be increased significantly
38. when increased economies of scale provide major competitive advantages
when the correlation between dollar sales and dollar marketing expenditures historically
has been low
______________ is selling a division of an organization.
Franchising
Divestiture
Liquidation
Horizontal integration
______________ strategy can be especially effective when price competition among rival
sellers is especially vigorous and most buyers use the product in the same ways.
Differentiation
Focus
Cost leadership
Market penetration
Managing by subjective is also referred to as the mystery approach to decision making.
True
False
To successfully employ a focus strategy, a firm must ensure that its total costs across its
overall value chain are lower than competitorsÕ' total costs.
True
False
The overall aim of the Balanced Scorecard is to balance financial objectives with strategic
objectives.
39. True
False
High-velocity change is becoming more the rule rather than the exception.
True
False
Chapter 9 bankruptcy applies to farmers.
True
False
Joint ventures are being used increasingly because they allow companies to minimize
risk.
True
False
Concentric diversification strategy is effective when an organization has a weak
management team.
True
False
Pioneering new and better technologies is an action based on the strategic posture of
leading change.
True
False
40. An acquisition occurs when a large organization purchases a smaller firm, whereas a
merger occurs when two organizations of about equal size unite to form one enterprise.
True
False
Cost advantage refers to the benefits a firm may achieve by entering a new market or
developing a new product or service prior to rival firms.
True
False
What are long-term objectives? Describe their purpose within various levels of an
organization.
To create paragraphs in your essay response, type <p> at the beginning of the
paragraph, and </p> at the end.
Compare market penetration, market development, and product development. Give an
example of each intensive strategy.
To create paragraphs in your essay response, type <p> at the beginning of the
paragraph, and </p> at the end.
What are the diversification strategies? Describe the two general types of diversification
strategies and explain when each type is appropriate.
To create paragraphs in your essay response, type <p> at the beginning of the
paragraph, and </p> at the end.
42. Date/Time Submitted:
October 27, 2008 at 1:11 AM (EDT)
Summary of Results
45% Correct of 20 scored items: 9 correct: 45%
11 incorrect: 55%
5 questions not scored. 20 scored questions.
More information about scoring
1. __________ is based on the belief that the true measure of a really good
strategist is the ability to solve problems.
Your Answer: Managing by subjectives
Correct Answer:Managing by crisis
Incorrect. The correct answer is managing by crisis.
2. Long-term objectives are needed at the ____________ of an organization.
Your Answer: corporate and divisional levels
Correct Answer:corporate, divisional, and functional levels
Incorrect. The correct answer is corporate, divisional, and functional levels.
3. __________ bankruptcy applies to municipalities.
Your Answer: Chapter 11
Correct Answer:Chapter 9
Incorrect. The correct answer is Chapter 9.
4. Many, if not most, organizations pursue a:
Your Answer: concentric diversification.
Correct Answer:combination strategy.
Incorrect. The answer is combination strategy.
5. An example of _____________ strategy is establishing Web sites to sell products
directly to consumers.
Your Answer: conglomerate diversification
43. Correct Answer:forward integration
Incorrect. The correct answer is forward integration.
6. Which of the following is not a guideline for pursuing liquidation?
Your Answer: When the stockholders of the firm can minimize their losses by selling the firmÕ's
assets
Correct Answer:When the organization has successfully pursued retrenchment
Incorrect. Liquidation would be appropriate in this situation. The correct answer is when
an organization has successfully pursued retrenchment.
7. A popular strategy that occurs when two or more companies form a temporary
partnership for the purpose of capitalizing on some opportunity is called a(n):
Your Answer: joint venture.
Correct.
8. All of the following situations are conducive to market penetration except
_________.
Your Answer: when the usage rate of present customers could be increased significantly
Correct Answer:when the correlation between dollar sales and dollar marketing expenditures
historically has been low
Incorrect. This is conducive to market development. The correct answer is when the
correlation between dollar sales and dollar marketing expenditures historically has been low.
9. ______________ is selling a division of an organization.
Your Answer: Horizontal integration
Correct Answer:Divestiture
Incorrect. The correct answer is divestiture.
10. ______________ strategy can be especially effective when price competition
among rival sellers is especially vigorous and most buyers use the product in the same ways.
Your Answer: Differentiation
Correct Answer:Cost leadership
Incorrect. The correct response is cost leadership strategy.
11. Managing by subjective is also referred to as the mystery approach to decision
44. making.
Your Answer:
True
Correct.
12. To successfully employ a focus strategy, a firm must ensure that its total costs
across its overall value chain are lower than competitorsÕ' total costs.
Your Answer:
False
Correct.
13. The overall aim of the Balanced Scorecard is to balance financial objectives with
strategic objectives.
Your Answer:
False
Correct.
14. High-velocity change is becoming more the rule rather than the exception.
Your Answer:
True
Correct.
15. Chapter 9 bankruptcy applies to farmers.
Your Answer:
False
Correct.
16. Joint ventures are being used increasingly because they allow companies to
minimize risk.
Your Answer:
False
Correct Answer:
True
Incorrect. Joint ventures and cooperative arrangements are being used increasingly
because they allow companies to improve communications and networking, to globalize
operations, and to minimize risk.
45. 17. Concentric diversification strategy is effective when an organization has a weak
management team.
Your Answer:
True
Correct Answer:
False
Incorrect. Concentric diversification is effective when an organization has a strong
management team.
18. Pioneering new and better technologies is an action based on the strategic
posture of leading change.
Your Answer:
True
Correct.
19. An acquisition occurs when a large organization purchases a smaller firm,
whereas a merger occurs when two organizations of about equal size unite to form one
enterprise.
Your Answer:
True
Correct.
20. Cost advantage refers to the benefits a firm may achieve by entering a new
market or developing a new product or service prior to rival firms.
Your Answer:
False
Correct.
21. What are long-term objectives? Describe their purpose within various levels of an
organization.
Your Answer:
vbc
Long-term objectives represent the results expected from pursuing certain strategies. The
time frame for objectives and strategies (actions to be taken to accomplish long-term objectives)
should be consistent, usually from two to five years. Objectives should be quantitative,
measurable, realistic, understandable, challenging, hierarchical, obtainable, and congruent
among organizational units. They are needed at the corporate, divisional, functional, and
operational levels. Students may see long-term objectives and the nature of long-term objectives
on page 168.
46. 22. Compare market penetration, market development, and product development.
Give an example of each intensive strategy.
Your Answer:
cv
Market penetration is seeking increased market share for present products or services in
present markets through greater marketing efforts. Market development comes with introducing
present products or services into new geographic areas. Product development is seeking
increased sales by improving present products or services or developing new ones. Students
should provide specific examples. See Table 5-3 on alternative strategies, defined and
exemplified for summary information.
23. What are the diversification strategies? Describe the two general types of
diversification strategies and explain when each type is appropriate.
Your Answer:
c
There are two general types of diversification strategies: related and unrelated.
Businesses are related when their value chains possess competitively valuable, cross-business
strategic fits. Businesses are said to be unrelated when their value chains are so dissimilar that
no competitively valuable, cross-business relationships exist. Most companies favor related
diversification strategies in order to capitalize on synergies. Students should see diversification
strategies on page 180 for information on this question.
24. What is differentiation? When would a firm pursue a differentiation strategy? Give
an example of a firm that uses differentiation.
Your Answer:
vc
Differentiation is one of Michael PorterÕ's generic strategies. It is a strategy aimed at
producing products and services considered unique industry-wide and directed at consumers who
are relatively price-insensitive. Students should provide an example of a firm that uses
differentiation and give support for their responses. See Michael PorterÕ's five generic strategies
on pages 188-191.
25. What is business-process outsourcing (BPO)? For what reasons would
companies choose to outsource their functional operations?
Your Answer:
vc
Business-process outsourcing, or BPO, is a rapidly growing new business that involves
companies taking over the functional operations, such as HR or payroll, of other firms.
Companies are choosing to outsource their functional operations more and more for several
reasons: (1) it is less expensive, (2) it allows the firm to focus on its core businesses, and (3) it
enables the firm to provide better services. There are other advantages to the strategy as well.
Students may refer to outsourcing on page 201.
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