Mcq Chapter 1-9

Chapter No. 1: The Nature of Strategic Management 1. The term _________ is used to refer to strategy formulation, implementation, and evaluation, with _________referring only to strategy formulation. a)

strategic planning; strategic management

b)

assessment; planning

c)

strategic management; strategic planning

d)

management cycle; brainstorming

2. Which of these requires a firm to establish annual objectives, devise policies, and allocate resources? a)

Strategy formulation

b)

Strategy implementation

c)

Strategy manipulation

d)

Strategy evaluation

3. The rationale for periodically conducting strategic-management meetings away from the work site is to encourage more _____________ and ____________ among participants. a)

feedback; rigidity

b)

creativity; candor

c)

confidence; self-interest

d)

strategy evaluation; candor

4. Anything that a firm does especially well compared to rival firms is referred to as: a)

competitive advantage.

b)

comparative advantage.

c)

an external opportunity.

d)

opportunity cost.

5. Both military and business organizations do all of the following except: a)

use of the element of surprise.

b)

aim "to gain competitive advantage."

c)

use the assumption of conflict to develop strategies.

d)

use their own strengths to exploit competitors' weaknesses.

6. __________ help an organization gather, analyze, and organize information. a)

Ethics officers

b)

Operatives

c)

Lobbyists

d)

Strategists

7. A disadvantage of international operations is: a)

Foreign operations can allow firms to establish low-cost production facilities in locations close to raw materials and/or cheap labor.

b)

Economies of scale can be achieved from operation in global rather than solely domestic markets.

c)

Competitors in foreign markets may not exist.

d)

Language, culture, and value systems differ among countries, causing communication barriers and problems managing people.

8. _________ are especially critical for successful strategy implementation. a)

Interpersonal skills

b)

Technical plans

c)

Long-range plans

d)

Short-range plans

9. All of these are pitfalls an organization should avoid in strategic planning except: a)

Using strategic planning to gain control over decisions and resources.

b)

Failing to involve key employees in all phases of planning.

c)

Hastily moving from mission development to strategy formulation.

d)

Using plans as a standard for measuring performance.

10. ____________ and __________ refer to economic, social, cultural, demographic, environmental, political, legal, governmental, technological, and competitive trends and events that could significantly benefit or harm an organization in the future. a)

Internal strengths; external threats

b)

External opportunities; external threats

c)

Internal weaknesses; external opportunities

d)

Internal strengths; internal weaknesses

11. Strategic management can be defined as the art and science of formulating, implementing, and evaluating cross-functional decisions that enable an organization to achieve its objectives. •

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. Objectives are an organization's statements that answer the question "what do we want to become?" •

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. Strategic management must be a self-reflective learning process. •

True

•

False

20. One pitfall to avoid in strategic planning is top management making many intuitive decisions that conflict with formal planning. •

True

•

False

Chapter No. 2: Business Vision and Mission 1. Most practitioners and academicians of strategic management feel that an effective mission statement exhibits ______ characteristics or components. a)

Twelve

b)

Three

c)

Five

d)

Nine

2. Carefully prepared _____________ and ____________ are widely recognized by both practitioners and academicians as the first step in strategic management. a)

Short-term objectives; long-term objectives

b)

Long-term objectives; goals

c)

Creeds; long-term objectives

d)

Vision statements; mission statements

3. The vision and mission statement can often be found: a)

In the SEC report.

b)

In a competitive market analysis.

c)

On the front of annual reports.

d)

On supplier invoices.

4. It is important to involve ______________ in the process of developing a mission statement. a)

Only those managers who will use the mission

b)

Very few people to ease consensus-building

c)

As wide a variety of upper-level managers as possible

d)

As many managers as possible

5. An article by Campbell and Yueng emphasizes that the process of developing a mission statement should create a(n) ________ and ________ between the organization and its employees. a)

Cultural bond; sense of accomplishment

b)

Emotional bond; sense of mission

c)

Physical bond; profitable purpose

d)

Short-term plan; sense of direction

6. During strategy _________, corporate social policy should be set and administered. a)

Implementation

b)

Control

c)

Formulation

d)

Evaluation

7. What is the recommended length of an effective mission statement? a)

There is no recommendation. It can be as long as the management wants.

b)

One sentence of 10 to 20 words.

c)

One page.

d)

Less than 250 words.

8. 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. a)

Twice

b)

One quarter

c)

Half

d)

Five times

9. A major reason for developing a business mission statement is to attract ________ who give meaning to an organization. a)

Stockholders

b)

Lobbyists

c)

Competitors

d)

Customers

10. Which of the following is a question that an effective mission statement answers? •

What is our profitability?

•

Is the firm technologically current?

•

What is our net worth?

•

What is the company we want to be in the long-range future?

11. The vision statement should be short, preferably one sentence. •

True

•

False

12. 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

13. The vision statement should be a paragraph and developed by the CEO or President of the company. •

True

•

False

14. Drucker says that asking the question "What is our business?" is synonymous with asking the question "what is our mission?" •

True

•

False

15. Stakeholders of an organization include stockholders, customers and creditors, but not the competitors. •

True

•

False

16. Developing a comprehensive mission statement is important because divergent views can be revealed and resolved through the process. •

True

•

False

17. An effective mission statement should include five components. •

True

•

False

18. During strategy formulation, social policy should be reaffirmed and changed. •

True

•

False

19. A mission statement should be longer than 250 words describing the ten components. •

True

•

False

20. The term social policy embraces managerial philosophy and thinking at the highest levels of an organization. •

True

•

False

Chapter No. 3: The External Assessment 1.

According to I/O theorists, which of the following contributes least to firm performance?

2.

3.

4.

5.

a)

Internal resources

b)

Economies of scale

c)

Barriers to market entry

d)

Product differentiation

The external audit is aimed at: a)

taking advantage of potential threats and minimizing external opportunities

b)

developing an exhaustive list of factors that could influence the business.

c)

identifying key variables that offer actionable responses.

d)

developing an infinite list of opportunities that could benefit a firm.

Good _______ in business, as in the military, is one of the keys to success. a)

short-term plan focus

b)

competitive intelligence

c)

divisions

d)

conflict encouraging scenarios

__________ are the results of a low value of the dollar. a)

Lower imports and higher exports

b)

Lower imports and lower exports

c)

Higher imports and higher exports

d)

Higher imports and lower exports

Which of the following is NOT a key economic variable to be monitored? a)

Availability of credit

b)

Price fluctuations

c)

Stock market trends

d)

Voter participation rates

6.

_______________ and ______________ are creating similar patterns of consumption in diverse cultures worldwide.

7.

a)

Tax harmonization; legal factors

b)

Distinct domestic markets; the climate for international business

c)

Mass communication; high technology

d)

Corporate tax breaks; mass communication

The idea of joining forces with a competitor is not easily accepted by ___________, who often view cooperation and partnerships with skepticism and suspicion.

8.

a)

Japanese

b)

Americans

c)

Chinese

d)

Europeans

All of these, except __________, are part of Porter's competitive forces in industry analysis.

9.

a)

potential entry of new competitors

b)

bargaining power of suppliers

c)

development of substitute products

d)

bargaining power of unions

In its simplest sense, the international challenge faced by U.S. business is twofold: a)

how to increase exports to other countries and how to increase imports from other countries.

b)

how to defend domestic markets against imported goods while minimizing exports.

c)

how to maximize exports to other nations and how to defend domestic markets against imported goods.

d)

how to minimize imports and exports in domestic markets and slowly decrease globalization.

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.

11.

a)

Qualitative forecasts

b)

Econometric model analyses

c)

Quantitative forecasts

d)

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.

12.

•

True

•

False

Significant and unequal effects on companies in different industries and in different locations come from trends in the dollar's value.

13.

•

True

•

False

Competitive pressures arising from substitute products increase as the relative price of substitute products declines and as consumers' switching costs decrease.

14.

•

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.

15.

•

True

•

False

Nine out of 10 large companies have employees dedicated solely to gathering competitive intelligence. •

True

•

False

16.

Suppliers can increase their bargaining power if they can inexpensively switch to competing brands or substitutes.

17.

•

True

•

False

Bargaining power of consumers is usually the most powerful of Porter's five competitive forces.

18.

•

True

•

False

Many large multinational firms are moving out of EU member-countries into Switzerland and Ireland to avoid costs associated with tax harmonization.

19.

•

True

•

False

Shifts in the nature and location of production systems, especially to China and India, are reducing the response time to changing market conditions.

20.

•

True

•

False

Based on the best information at the time, assumptions serve as checkpoints on the validity of strategies. •

True

•

False

Chapter No. 4: The Internal Assessment 1.

2.

A firm's strengths that cannot be easily matched or imitated by competitors are called: a)

External opportunities.

b)

distinctive competencies.

c)

special properties.

d)

competitive ventures.

___________ can inhibit strategic management, for example, by leading managers to miss the significance of changing external conditions.

3.

a)

Rules and guidelines

b)

Culture

c)

Market segmentation

d)

Competitive awareness

The five functions of management are planning, organizing, _________, staffing, and controlling.

4.

a)

rewarding

b)

communicating

c)

implementing

d)

motivating

A particular form or manner in which members of a group use sounds and written signs to convey meanings to each other is the definition of

5.

a)

language.

b)

saga.

c)

metaphor.

d)

rite.

__________ ratios measure management's overall effectiveness as shown by the returns generated on sales and investment. a)

Liquidity

b)

Profitability

c)

Growth

d)

Leverage

6.

7.

8.

9.

For a resource to be valuable, it must be either rare, hard to imitate, or: a)

viable.

b)

natural.

c)

difficult to construct.

d)

not easily substituted.

Americans place a high priority on __________ whereas many foreigners do not. a)

material wealth

b)

family

c)

relationships

d)

silence

Staffing involves all of these activities except: a)

recruiting.

b)

managing union relations.

c)

customer analysis.

d)

training and developing.

Which of the following ties all business functions together and provides the basis for all managerial decisions?

10.

a)

Management

b)

Marketing

c)

Information

d)

Technology

A _____ purpose is to improve the performance of an enterprise by improving the quality of managerial decisions. a)

management information system's

b)

data transformer's

c)

quality control mechanism's

d)

dysfunctional system's

11.

Many Europeans resent pay-for-performance, commission salaries, and objective measurement and reward systems.

12.

•

True

•

False

The process of performing an internal audit closely parallels the process of performing an external one.

13.

•

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.

14.

•

True

•

False

The only thing certain about the future of any organization is change, and planning is the essential bridge between the present and the future that increases the likelihood of achieving desired results.

15.

•

True

•

False

Sometimes an organization will pursue a backward integration strategy primarily to gain better control over prices charged to consumers.

16.

•

True

•

False

An opportunity analysis is an appraisal of the costs, benefits and risks associated with decisions.

17.

•

True

•

False

An example of activity ratios is the times-interest-earned ratio. •

True

•

False

18.

Cross-training of employees can decrease efficiency, quality, productivity, and job satisfaction.

19.

•

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.

20.

•

True

•

False

Internal R&D and contract R&D are the two basic forms of R&D in organizations. •

True

•

False

Chapter No. 5: Strategies in Action 1.

__________ is based on the belief that the true measure of a really good strategist is the ability to solve problems.

2.

3.

a)

Managing by subjective

b)

Managing by extrapolation

c)

Managing by crisis

d)

Managing by hope

Long-term objectives are needed at the ____________ of an organization. a)

Corporate and divisional levels

b)

Corporate levels

c)

corporate, divisional, and functional levels

d)

Divisional and functional levels

__________ strategy is designed to fortify an organization's basic distinctive competence.

4.

5.

a)

Integrative

b)

Retrenchment

c)

Intensive

d)

Diversification

Many, if not most, organizations pursue a: a)

Concentric diversification.

b)

combination strategy.

c)

Geographic strategy.

d)

Product development strategy.

An example of _______ strategy is establishing Web sites to sell products directly to consumers. a)

Backward integration

b)

Conglomerate diversification

c)

Horizontal integration

d)

forward integration

6.

Which of the following is not a guideline for pursuing liquidation? a)

When divestiture has not been successful.

b)

When an organization's only alternative is bankruptcy.

c)

When the stockholders of the firm can minimize their losses by selling the firm's assets.

d) 7.

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):

8.

a)

Merger.

b)

joint venture.

c)

Acquisition.

d)

Takeover.

______ includes increasing the number of salespersons, increasing advertising expenditures, offering extensive sales promotion items, or increasing publicity efforts.

9.

10.

a)

Market development

b)

Product development

c)

Horizontal integration

d)

market penetration

______________ is selling a division of an organization. a)

Franchising

b)

Divestiture

c)

Liquidation

d)

Horizontal integration

When employing a ______ strategy, a firm must be careful not to use such aggressive price cuts that their own profits are low or nonexistent. a)

Differentiation

b)

Focus

c)

Cost leadership

d)

Product development

11.

Managing by Crisis is based on the belief that the true measure of a really good strategist is the ability to solve problems.

12.

•

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.

13.

•

True

•

False

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

14.

15.

16.

•

True

•

False

High-velocity change is becoming more the rule rather than the exception. •

True

•

False

bankruptcy applies to farmers. •

True

•

False

Joint ventures are being used increasingly because they allow companies to minimize risk.

17.

•

True

•

False

Diversification strategies are becoming more popular as organizations are finding it easier to manage diverse business activities.

18.

•

True

•

False

Pioneering new and better technologies is an action based on the strategic posture of leading change. •

True

•

False

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.

20.

•

True

•

False

Being a first mover can be effective when a firm can easily copy or imitate the lead firm's products or services. •

True

•

False

Chapter No. 6: Strategy Analysis and Choice 1. The __________ is based on 2 key dimensions: the IFE total weighted scores on x-axis and the EFE total weighted scores on the y-axis. a)

IE Matrix

b)

SPACE Matrix

c)

BCG Matrix

d)

Grand Strategy Matrix

2. _________ are defensive tactics directed at reducing internal weakness and avoiding external threats. a)

SW Strategies

b)

WO Strategies

c)

WT Strategies

d)

ST Strategies

3. Which stage in the strategy-formulation framework focuses on generating feasible alternative strategies? a)

The input stage

b)

The output stage

c)

The matching stage

d)

The decision stage

4. ______ have a low relative market share position and compete in a slow- or no-marketgrowth industry. a)

Question marks

b)

Cash cows

c)

Stars

d)

Dogs

5. Which of these is not a SPACE Matrix quadrant? a)

Defensive

b)

Offensive

c)

Aggressive

d)

Competitive

6. ______ organizations compete in slow-growth industries and have weak competitive positions. a)

Quadrant I

b)

Quadrant III

c)

Quadrant IV

d)

Quadrant II

7. A division with a high relative market share position in a low-growth industry can be described as a: a)

Star.

b)

Dog.

c)

Question mark.

d)

Cash cow.

8. Slow market growth characterizes ______ and ______ of the Grand Strategy Matrix. a)

Quadrant II; Quadrant III

b)

Quadrant I; Quadrant IV

c)

Quadrant II; Quadrant I

d)

Quadrant III; Quadrant IV

9. _____ is shifting focus from specific issues to more general ones may increase strategists' options for gaining organizational commitment. a)

Generalization

b)

Equifinality

c)

Satisfying

d)

Focusing on higher-order issues

10. Which of the following is not a tactic used by politicians for centuries that can aid strategists? a)

Equifinality

b)

Objectivity

c)

Focus on higher-order issues

d)

Generalization

11. Sustainability is the idea that a business can meet its financial goals without hurting customers. •

True

•

False

12. Organizations generally will pursue ST, SO, or WT strategies to get into a situation in which they can apply WO strategies. •

True

•

False

13. FA and CA are the 2 dimensions with negative ratings in SPACE Matrix. •

True

•

False

14. The major benefit of the BCG Matrix is that it draws attention to the cash flow, investment characteristics, and needs of an organization's various divisions. •

True

•

False

15. The IE Matrix can be divided into three major regions that have different strategy implications: grow and build, hold and maintain, and harvest or divest. •

True

•

False

16. Quadrant IV businesses compete in slow-growth industries and have weak competitive positions. •

True

•

False

17. The Grand Strategy Matrix is based on two evaluative dimensions: market share and market growth. •

True

•

False

18. If the directional vector appears in the lower-right or competitive quadrant of the SPACE Matrix, it suggests competitive strategies such as backward, forward, and horizontal integration. •

True

•

False

19. The BCG Matrix graphically portrays differences among divisions in terms of relative market share position and industry growth rate. •

True

•

False

20. In the U.S. today, each board director attends at least 90 percent of all meetings. •

True

•

False

Chapter No. 7: Implementing Strategies: Management and Operations Issues 1. Which of these is true about strategy implementation? a)

It is positioning forces before the action.

b)

It is primarily an operational process.

c)

It focuses on effectiveness.

d)

It requires intuitive rather than leadership skills.

2. In organizations that do not use a strategic-management approach to decision making, _________ is often based on political or personal factors. a)

Goal setting

b)

Policy making

c)

resource allocation

d)

Company strategy

3. _______ can be defined as a disagreement between two or more parties on one or more issues. a)

Avoidance

b)

Conflict

c)

Compromise

d)

Rational discussion

4. Perhaps the most important limitation of a divisional structure is that it: a)

Allows local control of situations.

b)

Leads to a competitive climate within a firm.

c)

Streamlines staff services too much.

d)

is costly.

5. The most widely used structure is the ________ type. a)

Divisional

b)

SBU

c)

Functional

d)

Matrix

6. Which of the following is not one of the ways divisional structures can be organized a)

By geographic area

b)

By product

c)

By suppliers

d)

By process

7. A _____ structure leads to short-term and narrow thinking that may undermine what is best for the firm as a whole. a)

Divisional

b)

Functional

c)

Matrix

d)

Strategic business unit

8. ________ is concerned more with employee and customer well-being than shareholder well-being. a)

Restructuring

b)

Reengineering

c)

E-engineering

d)

Benchmarking

9. A change strategy that attempts to convince people the change is to their personal advantage is: a)

Rational.

b)

Force.

c)

Educative.

d)

Compromise.

10. _______ can thrust managers into roles that emphasize counseling and coaching over directing and enforcing. a)

Cross-training

b)

JIT

c)

Adding new branches

d)

Quality control

11. Strategy implementation is managing forces during the action. •

True

•

False

12. Nothing could be more detrimental to strategic management and organizational success than for resources to be allocated inconsistent with priorities indicated by annual objectives. •

True

•

False

13. Defusion is exemplified by exchanging members of conflicting parties so that each can gain an appreciation of the other's point of view. •

True

•

False

14. The structural format for developing objectives and policies can significantly impact all other strategy-implementation activities •

True

•

False

15. Functional structure design violates the unity-of- command principle. •

True

•

False

16. Defusion includes such actions as ignoring the problem in hopes the conflict will resolve itself or physically separating the conflicting individuals. •

True

•

False

17. Medium-sized firms tend to be divisionally structured, whereas large firms tend to use an SBU (strategic business unit) or matrix structure. •

True

•

False

18. Communication is often the best in a functional structure. •

True

•

False

19. The educative change strategy presents information to convince people of the need to change. •

True

•

False

20. There is a much higher tolerance for adversarial relations or friction at work in Mexico as compared to the United States. •

True

•

False

Chapter No. 8: Implementing Strategies: Marketing, Finance/Accounting, R&D, and MIS Issues 1. ______ can be defined as the subdividing of a market into distinct subsets of customers according to needs and buying habits a)

Product positioning

b)

Marketing mix

c)

Market segmentation

d)

Divisional structure

2. ______________ and ____________ rank as marketing's most important contributions to strategic management. a)

Market penetration; market segmentation

b)

Product diversification; market penetration

c)

Market segmentation; product positioning

d)

Product positioning; product diversification

3. An effective product positioning strategy leads customers to expect __________service than a company can deliver. a)

much higher

b)

slightly lower

c)

the same

d)

much lower

4. _______ entails developing schematic representations that reflect how your products or services compare to competitors' on dimensions most important to success in the industry a)

Promotion

b)

Positioning

c)

Placing

d)

Pricing

5. What is the most widely used technique for determining the best combination of debt and stock? a)

Earnings per share/earnings before interest and tax analysis

b)

Debt-to-stock ratio

c)

Present value analysis

d)

Gross profit analysis

6. Nearly all financial institutions require at least __________ years of projected financial statements whenever a business seeks capital a)

Five

b)

Three

c)

Four

d)

Six

7. The first approach in evaluating the worth of a business is determining its __________ or __________. a)

net income; operating revenue

b)

cash flow; net income

c)

wealth; revenue

d)

net worth; stockholders' equity

8. Which of the following can be forecasted using the percentage-of-sales method? a)

Cost of goods sold

b)

Taxes

c)

Interest

d)

Dividends

9. In many firms, _________ is doing away with the workplace and allowing employees to work at home or anywhere, anytime. a)

Management

b)

The economy

c)

Government

d)

Information technology

10. The level of management support for R&D is often constrained by: a)

the limited performance of R&D.

b)

difficult market penetration.

c)

high levels of competition in R&D.

d)

resource availability.

11. The most common bases for segmenting markets are geographic and demographic. •

True

•

False

12. An EPS/EBIT analysis is the most widely used technique for determining whether debt, stock, or a combination is the best alternative for raising capital to implement strategies. •

True

•

False

13. The balance sheet should be prepared before the income statement in performing projected financial analyses. •

True

•

False

14. Financial budgets can be viewed as the planned allocation of a firm's resources based on past performance. •

True

•

False

15. Strategies such as forward, backward, and horizontal integration require that new products be successfully developed and that old products be significantly improved. •

True

•

False

16. Using all debt or all stock to raise capital may impose fixed obligations, restrictive covenants, or other constraints that could severely reduce a firm's ability to raise additional capital in the future. •

True

•

False.

17. Financial budgeting should not be thought of as a tool for limiting expenditures but rather as a method for obtaining the most productive and profitable use of an organization's resources.

•

True

•

False.

18. To use the price-earnings ratio method, divide annual earnings per share by the market price of the firm's common stock and multiply by average net income for the past five years. •

True

•

False

19. A good information system can cause a firm to increase costs due to the expense of new technology. •

True

•

False.

20. A good information system can allow a firm to reduce costs by establishing direct communications between elements of the value chain. •

True

•

False

Chapter No. 9: Strategy Review, Evaluation, and Control 1. ________ refers to the need for strategists to examine sets of trends as well as individual trends in evaluation strategies. a)

Consistency

b)

Consonance

c)

Feasibility

d)

Advantage

2. Strategy evaluation includes all of the following basic activities, EXCEPT: a)

Examining the underlying bases of a firm's strategy.

b)

Comparing expected results with actual results.

c)

Comparing results of competitors' strategies.

d)

Taking corrective actions to ensure that performance conforms to plans.

3. The purpose of strategy evaluation is to: a)

Improve R&D programs.

b)

Evaluate employees' performance.

c)

Make budget changes.

d)

Alert management to problems or potential problems.

4. ______ require a more elaborate and detailed strategy evaluation system. a)

Small organizations

b)

Functional structures

c)

Large organizations

d)

Divisional structures

5. A revised _________ matrix should indicate how effective a firm's strategies have been in response to key opportunities and threats. a)

IFE

b)

Grand strategy

c)

SPACE

d)

EFE

6. _______ should place an organization in a better position to capitalize upon internal strengths; to take advantage of key external opportunities; to avoid, reduce, or mitigate external threats; and to improve internal weaknesses. a)

Corrective actions

b)

Strategy structure

c)

Strategic circle

d)

Layoffs

7. Which of these is not a key financial ratio? a)

Market share

b)

Production quality

c)

Earnings per share

d)

Asset growth

8. Which of the following is not a qualitative question that is useful in strategy evaluation? a)

How much has our market share grown?

b)

Is the strategy internally consistent?

c)

Is the strategy appropriate in view of available resources?

d)

Is the strategy consistent with the environment?

9. The Balanced Scorecard approach to strategy evaluation aims to: a)

Emphasize long-term concerns.

b)

Balance the financial concerns.

c)

Emphasize nonfinancial concerns.

d)

Balance internal with external concerns.

10. _______ can be defined as alternative plans that can be put into effect if certain key events do not occur as expected. a)

Strategy formulation

b)

Contingency plans

c)

Long-term plans

d)

Strategy implementation

11. Advantage, in Rumelt's criteria for evaluating strategies, means a strategy must neither overtax available resources nor create unsolvable subproblems. •

True

•

False

12. Alternative strategies not selected for implementation should be discarded, as they have a tendency to contaminate the contingency plans. •

True

•

False

13. And IFE Matrix should indicate how effective a firm's strategies have been in response to key opportunities and threats. •

True

•

False

14. The end of the fiscal year is the best time of the year to do strategy evaluation. •

True

•

False

15. Criteria that predict results may be more important than those that reveal what already has happened. •

True

•

False

16. Strategy evaluation, to be effective, should be based on quantitative criteria only. •

True

•

False

17. Instituting an environmental audit can include moving environmental affairs from the staff side of the organization to the line side. •

True

•

False

18. Auditor-employees within an organization are responsible for safeguarding company assets, assessing the efficiency of company operations, and ensuring that generally accepted business procedures are practiced. •

True

•

False

19. Proponents of the top-down approach contend that top executives are the only persons in the firm with the collective experience, acumen, and fiduciary responsibility to make key strategy decisions. •

True

•

False

20. Strategy evaluation is becoming easier with the passage of time. •

True

•

False