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

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.

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: 2.Correct Answer: . 3.Correct Answer: 4. Correct.: strategic management; strategic planning Strategy implementation

creativity; candor competitive advantage.

5.Correct Answer: 6.Correct Answer:

use the assumption of conflict to develop strategies. Strategists

. 7.Correct Answer: language, culture, and value systems differ among countries, causing communication barriers and problems managing people. 8.Your Answer: Correct. 9.Correct Answer: . 10.Correct Answer: 11.True Correct. 12.Correct Answer: False Incorrect. Strategy implementation is called the action stage. 13.True Correct. industry analysis. using plans as a standard for measuring performance. strategy formulation

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.

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)

\ Chapter 2

The operating ______ of organizations should be to identify customers' 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

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 shareholders' 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 customers' 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 company'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

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 "What is our business?" the vision statement answers the question "What do we want to become?" Students should refer to "What Is Our Business?" and "Vision Versus Mission" 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 organization'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?

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 organization'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 customers' 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 strategicmanagement process. There are nine critical components that should be included in the mission statement. They can be addressed by asking several questions-who, what, where, how much, or what. Students should identify all nine components-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.

Your Results for "Chapter Quiz"

1. Your Answer: Correct. 2. Your Answer:

philosophy

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.

Your Answer: Correct. 7. Your Answer: Correct. 8.

implementation

Less than 200 words

Correct Answer:twice Incorrect. The correct response is twice. 9. Your Answer: Correct. 10.Your Answer: 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: Is the firm technologically current?

identify customers' needs; provide a product or service to fulfill them

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.

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

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

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

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

paragraph, and </p> at the end.

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. To create paragraphs in your essay response, type <p> at the beginning of the paragraph, and </p> at the end.

Differentiate between market commonality and resource similarity. What is meant by each of these terms? How are they used? To create paragraphs in your essay response, type <p> at the beginning of the paragraph, and </p> at the end.

What is the Competitive Profile Matrix? How is it used? What factors are included in this analysis? To create paragraphs in your essay response, type <p> at the beginning of the paragraph, and </p> at the end.

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Date/Time Submitted: October 27, 2008 at 1:06 AM (EDT) Summary of Results 45% Correct of 20 scored items: 9 correct: 11 incorrect: 55% 5 questions not scored. 20 scored questions. More information about scoring

45%

1. performance? Your Answer: Correct. 2. Your Answer:

According to I/O theorists, which of the following contributes least to firm Internal resources

The external audit is aimed at: taking advantage of potential threats and minimizing external opportunities.

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: resources. Running an intelligence program requires lots of people, computers, and other

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. Your Answer: Correct. 5. Your Answer: has replaced as the world's hottest destination for foreign direct investment. Great Britain; the United States __________ are the results of a low value of the dollar. Lower imports and higher exports

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: 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 Mass communication; high technology

Correct Answer:the Internet Incorrect. The correct answer is the Internet. 8. analysis. Your Answer: All of these, except__________, are part of Porter's competitive forces in industry bargaining power of unions

Correct. 9. twofold: Your Answer: globalization. In its simplest sense, the international challenge faced by U.S. business is how to minimize imports and exports in domestic markets and slowly decrease

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: 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. Your Answer: False Correct Answer: True The absence of a legal system deters firms from initiating business with China. Quantitative forecasts

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. 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 Acquisition is essential to growth in the most competitive companies.

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. 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:

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Chapter 4

Chapter 4: The Internal Assessment

Chapter 4: The Internal Assessment This activity contains 25 questions.

A firm's strengths that cannot be easily matched or imitated by competitors are called: external opportunities. distinctive competencies. special properties. competitive ventures.

___________ can inhibit strategic management, for example, by leading managers to miss the significance of changing external conditions. Rules and guidelines Culture Market segmentation Competitive awareness

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 management'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.

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

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 firm'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.

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.

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.? To create paragraphs in your essay response, type <p> at the beginning of the paragraph, and </p> at the end.

What does it mean for a manager to be motivating? What affects morale and employee satisfaction? To create paragraphs in your essay response, type <p> at the beginning of the paragraph, and </p> at the end.

Identify and describe the Internal Factor Evaluation (IFE) Matrix. What is its purpose in strategic management? To create paragraphs in your essay response, type <p> at the beginning of the paragraph, and </p> at the end.

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Date/Time Submitted: October 27, 2008 at 1:09 AM (EDT) Summary of Results 45% Correct of 20 scored items: 9 correct: 11 incorrect: 55% 5 questions not scored. 20 scored questions. More information about scoring

45%

1. called: Your Answer:

A firm's strengths that cannot be easily matched or imitated by competitors are 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

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 management'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: Correct. 7. Your Answer: Americans place a high priority on __________ whereas many foreigners do not. silence organizational resources.

Correct Answer:material wealth Incorrect. The correct answer is material wealth. 8. Your Answer: Correct. 9. Which of the following ties all business functions together and provides the basis for all managerial decisions? Your Answer: Correct. 10. A _____________ receives raw material from both the external and internal Information Staffing involves all of these activities except: customer analysis.

evaluation of an organization. Your Answer: process function system

Correct Answer:management information system Incorrect. The correct answer is management information system. 11. 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 firm's internal resources should be considered secondarily in devising strategies that can lead to sustainable competitive advantage. Your Answer: False Correct. 14. 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. Synergy is the 2 + 2 = 5 effect. In China, activities involve concern for guanxi, or personal relations.

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. Your Answer: False Correct. 18. 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. Your Answer: False Correct Answer: True Incorrect. The two basic forms of R&D in organizations are internal R&D and contract R&D. Internal R&D and contract R&D are the two basic forms of R&D in organizations. Capacity decisions concern the design of the physical production system. An example of activity ratios is the times-interest-earned ratio.

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 firm's management, marketing, finance/accounting, production/operations, research and development, and management information systems operations. Key factors should be prioritized so that the firm'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?

Your Answer: as The IFE Matrix is a strategy-formulation tool that summarizes and evaluates the major strengths and weaknesses in the functional areas of a business. It also provides a basis for identifying and evaluating relationships among those areas. The IFE Matrix is developed in five steps. The last step is to sum the weighted scores for each variable to determine the total weighted score for the organization. Students can refer to pages 157-158 in the section on the IFE Matrix for more information. E-mail Your Results My name is (first last): E-mail my results to: E-mail address: Send as: Me:

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Home Chapter Quiz

Chapter 5

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

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 organization's only alternative is bankruptcy When the stockholders of the firm can minimize their losses by selling the firm'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

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 competitors' total costs. True False

The overall aim of the Balanced Scorecard is to balance financial objectives with strategic objectives.

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

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.

What is differentiation? When would a firm pursue a differentiation strategy? Give an example of a firm that uses differentiation. To create paragraphs in your essay response, type <p> at the beginning of the paragraph, and </p> at the end.

What is business-process outsourcing (BPO)? For what reasons would companies choose to outsource their functional operations? To create paragraphs in your essay response, type <p> at the beginning of the paragraph, and </p> at the end.

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Your Results for "Chapter Quiz" Print this page Site Title: Book's Title: Strategic Management: Concepts and Cases, 11E Strategic Management: Concepts and Cases, 11th Edition

Book's Author: David Location on Site: Chapter 5 > Chapter Quiz

Date/Time Submitted: October 27, 2008 at 1:11 AM (EDT) Summary of Results 45% Correct of 20 scored items: 9 correct: 11 incorrect: 55% 5 questions not scored. 20 scored questions. More information about scoring

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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. Your Answer: Long-term objectives are needed at the ____________ of an organization. corporate and divisional levels

Correct Answer:corporate, divisional, and functional levels Incorrect. The correct answer is corporate, divisional, and functional levels. 3. Your Answer: __________ bankruptcy applies to municipalities. Chapter 11

Correct Answer:Chapter 9 Incorrect. The correct answer is Chapter 9. 4. Your Answer: Many, if not most, organizations pursue a: 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

Correct Answer:forward integration Incorrect. The correct answer is forward integration. 6. Your Answer: assets Which of the following is not a guideline for pursuing liquidation? When the stockholders of the firm can minimize their losses by selling the firm's

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: Correct. 8. _________. Your Answer: All of the following situations are conducive to market penetration except when the usage rate of present customers could be increased significantly joint venture.

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. Your Answer: ______________ is selling a division of an organization. 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

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 competitors' 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. Your Answer: True Correct. 15. Your Answer: False Correct. 16. 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. Joint ventures are being used increasingly because they allow companies to Chapter 9 bankruptcy applies to farmers. High-velocity change is becoming more the rule rather than the exception.

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. 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. What are long-term objectives? Describe their purpose within various levels of an

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 Porter'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 Porter'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. E-mail Your Results

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