When the ABC Corporation makes decisions that assist it in formulating and implementing plans that

are designed to achieve its objectives, it is most likely engaging in _________.

A) strategic management

B) strategy utilization

C) strategic processing

D) strategic formality

Of the following, which one is least likely to be considered a critical task associated with an
organization's strategic management process?

A) Evaluation of the process for use in future decision making

B) Evaluation of options relative to the company's mission

C) Decreasing the levels of hierarchy present within the company's management

structure

D) Developing a set of short-term objectives that are compatible with the company's
grand strategies

The We Have It Your Way Organization has an established "game plan" for its business operations.
This game plan reflects the company's awareness of how and where it should compete and against
whom the competition should take place. It can be stated this organization has an established
_________.

A) level of strategy

B) formality

C) planning mode

D) strategy

Of the following, which statement would most likely not be considered a dimension of strategic
issues?

A) Strategic issues require large amounts of the firm's resources.

B) Strategic issues always impact the firm's long-term income.

C) Strategic issues require the firm's external environment be considered.

D) Strategic issues are future-oriented.

5

The decision making hierarchy of a firm typically contains _______ levels.

A) 3

B) 4

C) 2

D) infinite

Which level of the decision making hierarchy is best identified as being composed principally of
business and corporate mangers who must translate the statements of direction and intent into
concrete objectives and strategies for the individual business units?

A) Corporate level

B) Strategic level

C) Business level

D) Functional level

An organization's board of directors and administrative officers are most likely to be found at the
________ in its decision making hierarchy.

A) corporate level

B) strategic level

C) business level

D) functional level

At which hierarchy level would the decisions made be more value-oriented, more conceptual, and
less concrete?

A) Functional level
 B) Corporate level

C) Strategic level

D) Business level

Common functional-level decisions would include all of the following except ___________.

A) generic versus brand name labeling

B) amount of inventory to keep

C) type of production equipment

D) how to best enhance the firm's image and fulfill its social responsibilities

10

________ refers to the degree in which participants, responsibilities, authority, and discretion in
decision making are specified.

A) Formality

B) Strategic management

C) Planning mode

D) Company mission

11

At times very large organizations utilize strategic evaluation as part of their comprehensive, formal
planning system. This approach, identified by Henry Mintzberg, is best referred to as the _________.

A) adaptive mode

B) strategic management process

C) entrepreneurial mode

D) planning mode

12
Of the following, which statement regarding the benefits of strategic management is ?

A) An accurate assessment of the impact of strategy formulation requires nonfinacial

criteria to be evaluated.

B) The behavioral consequences of strategic management are similar to those found

in a firm guided by an authoritarian leader.

C) Strategy formulation activities enhance the firm's ability to prevent problems.

D) Resistance to change is reduced.

13

Which one of the following would not be considered a type of unintended negative consequence of
involvement in strategy formulation?

A) Management members may become neglectful of their operational responsibilities

due to time constraints.

B) Managers may shirk their responsibility for the decisions made.

C) Employees may become disappointed and disillusioned over unattained

expectations.

D) The involvement of employees in strategy formulation improves their

understanding of the productivity-reward relationship and thus heightens their motivation.

14

Firms with multiple products, markets, or technologies tend to utilize _______ strategic
management systems.

A) more complex

B) less formal

C) more formal

D) less complex

15

Which one of the following would not be considered a key component of the strategic management
model?

A) empowering policies

B) functional tactics
 C) corporate level hierarchy

D) company mission

16

When the Somewhat Unique Company analyzes the quantity and quality of its financial, human, and
physical resources, it is most likely conducting a/an _________.

A) internal analysis

B) long-term objective formulation

C) grand strategy formulation

D) external analysis

17

Strategic analysis and choice in single or dominant product/service businesses center on which of
the following?

A) Evaluation of the process for use in future decision making

B) Evaluation of options relative to the company's mission

C) Identifying strategies that are most effective in building sustainable competitive

advantage

D) Development of short-term objectives to guide the operations

18

The XYZ Organization has a statement of means for how it will accomplish its objectives. XYZ is most
likely to have a package of long-term objectives known as its ___________.

A) generic strategy

B) grand strategy

C) mission statement

D) functional tactics
19

___________ is concerned with tracking a strategy as it is being implemented so as to detect

problems in its underlying premises.

A) Continuous improvement

B) Empowerment

C) Strategic control

D) Strategic management

20

When a firm is facing conditions that are constantly changing and those conditions can and do affect
the interrelated and interdependent strategic activities of that firm, it can be stated the business is
most likely operating in a/an _______ environment.

A) dynamic

B) grand strategy

C) isolated

D) static

All of the following statements would be considered true of a company's mission statement except
which one?

A) A company's mission is an enduring statement of a firm's intent.

B) A mission statement typically identifies the firm's principal products and services.

C) A mission statement identifies the scope of the firm's operations.

D) The mission statement staunchly presents a firm's strategic intent.

Of the following, which aspect is least likely to be a consideration addressed in an organization's

mission statement?

A) Who are the firm's primary customers?

B) What image does the firm wish to project?

C) Which areas of technology will be empathized?

D) What are the number of levels the corporate hierarchy will contain?
3

Which one of the following statements is least likely to represent a fundamental belief an
organization would have to guide it in creating its mission statement?

A) The primary products will be made available to the market at a price reflecting less
than total cost so as to gain market share.

B) The management philosophy of the business will result in a favorable public image.

C) The products or services offered can satisfy the customers within a specific market
segment.

D) The business will provide financial rewards for those who are willing to invest in
helping the company succeed.

The XYZ Organization's mission statement is focused around three indispensable components. Of the
following, which one would not be considered one of these components?

A) The markets served by XYZ shall include oil and gas producers as well as producers
of chemicals.

B) XYZ shall hire only individuals with sufficient educational levels so as to be of

benefit to our customers and shareholders.

C) The customers of XYZ shall include global consumers of gas and oil products and
domestic users of nontoxic chemicals.

D) The technologies utilized by XYZ shall focus upon development of alternative sources
of gas and oil so as to remain competitive within the industry.

Of the following statements, which one would not fit well in the segment of a corporate mission
statement expressing the corporation's concern for public image?

A) Our organization is dedicated to the total success of our business as a worldwide

competitor.

B) We have a strong responsibility to the communities in which we work.

C) Our organization must be responsive to the public's desire for improvement in the
quality of life.

D) We shall adhere to the philosophy of equal opportunity for all.

Purportedly, there are three economic goals that serve to guide the strategic direction of almost
every business organization. ________ is least likely to be considered one of these goals?
 A) Survival

B) Profitability

C) Sustained absolute advantage

D) Growth

When an organization makes a statement such as "We believe that meeting the needs of customers,
suppliers, and neighbors is instrumental to fulfilling our mission" the organization is most likely
identifying its _________.

A) vision statement

B) company creed

C) mission statement

D) agency theory

Of the following statements, which one is least likely to be true regarding a company's statement of
philosophy?

A) A company's statement of philosophy is often called its company creed.

B) It reflects the guiding values and philosophical priorities to which strategic

organizational managers are committed.

C) This statement reflects the basic beliefs and aspirations of the organization.

D) A company's statement of philosophy rarely if ever appears within the

organization's mission statement.

Which one of the following statements would be considered false when discussing the value a
company places on its public image?

A) The chance of gaining negative public image does not inspire organizations into
action.

B) Public agitation stimulates organizations into taking ive actions.

C) Essentially, it is the public's opinion of an organization and its actions that count in
the long run.

D) Firms rarely address the issue of public image in an intermittent manner.

10

A major determinant of a firm's success is the extent to which the firm can relate functionally to its
_________ environment.

A) internal

B) competitive

C) strategic

D) external

11

Which one of the following would not be considered one of the newest trends in mission statement
components?

A) Statements of company vision

B) Inclusions of the top-level management team's work experience and ethics

C) Reflection of sensitivity to consumers

D) Expression of concern for quality

12

Of the following, which one is best identified as a statement that presents a firm's strategic intent
designed to focus the energies and resources of the company on achieving a desirable future?

A) Corporate philosophy statement

B) Company creed

C) Vision statement

D) Mission statement

13

All of the following statements would be considered to be true regarding company vision statements
except ________.

A) vision statements are often combined with the mission statement

B) vision statements are often designed to be memorable, one-line statements

C) vision statements are never presented with an organization's mission statement

D) vision statements reflect an organization's strategic intent

14

The BYOB Organization has a highly dedicated team of strategic decision makers. Of the following,
which one is least likely to be one of the duties or responsibilities handled by these individuals?

A) Hiring front line supervisors and managers

B) Allocation of resources

C) Monitoring the firm's success

D) Determining the firm's mission

15

The board of directors of the TMJ Company takes great pride in the operations of this very successful
company. Which of the following statements would most likely be considered false about TMJ's
board of directors?

A) The board is comprised of strategic managers and stockholder representatives.

B) The board is responsible for the creation of the company mission.

C) The board rarely has to deal with potentially unethical business issues.

D) The board establishes the compensation level of top officers and executives.

16

If an organization is suffering from disruptions because the wishes of its owners and the actions of
its managers do not coincide the problem is actually one of _______.

A) agency

B) strategic intent

C) board of director's discrepancy

D) adverse selection

17

When the costs of problems that arise if the philosophies of company agents and owners do not
align are coupled with the costs associated with minimizing these problems, it is known as
_________.

A) adverse selection

B) moral hazard problems

C) agency costs

D) agency theory
18

The owners of the Rounders Company are experiencing a problem because they are unable to gain
sufficient information about the company to effectively monitor the actions of its executives. This
type of problem is best known as a/an _______ problem.

A) agency

B) moral hazard

C) principal-agent

D) adverse selection

19

________ is/are an agency problem caused by the limited ability of stockholders to precisely
determine the competencies and priorities of executives at the time they are hired.

A) Agency costs

B) Moral hazard

C) Principal-agent discrepancy

D) Adverse selection

20

All of the following except ______ would be considered viable maneuvers an organization can
undertake to minimize or agency problems.

A) provide frontload bonuses to executives

B) define the agent's responsibilities in a contract

C) pay executives a premium for their services

D) create teams of executives across different units of the organization

The various interest groups associated with the CBC Corporation expect and demand their claims
toward the organization be settled in a responsible manner. When discussing this concept, all of the
following statements would be considered true of a corporation's interest groups except which one?

A) Governments expect adherence to legislation.

B) Stockholders desire appropriate returns on their investments.

C) The general public wants products with fair pricing.

D) Employees seek broadly defined job satisfaction from their jobs.

2

As a stakeholder the local communities associated with an organization have distinct views of the
responsibility an organization has to them. The views of local communities would include likely all
but which one of the following?

A) Participation of company officials in community affairs

B) Providing a place of productive and healthful employment

C) Interest in and support of local government

D) Adherence to the letter and intent of public policy dealing with the requirements
of fair and free competition

Outside stakeholders of an organization would include all of the following groups except _________.

A) the general public

B) the board of directors

C) local and federal governments

D) unions and their representatives

Which type of social responsibility is best identified as being the firm's obligations to comply with
the rules and statutes that regulate business activities?

A) Economic responsibility

B) Legal responsibility

C) Discretionary responsibility

D) Ethical responsibility

Responsibilities voluntarily assumed by a business such as public relations, good citizenship, and full
corporate responsibility is best identified as which one of the following?

A) Discretionary responsibilities

B) Corporate social responsibilities

C) Ethical responsibilities

D) Economic responsibilities
6

Which one of the following statements would be considered false regarding the concept of
corporate social responsibility (CSR)?

A) Costs and benefits of CSR are both economic and social in nature.

B) CSR embraces the idea that business has a duty to serve society in general as well as
the financial interests of stockholders.

C) CSR is focused only on responsibilities that are voluntarily assumed by a business.

D) CSR should be viewed as an integral component in the decision making process.

All of the following except ________ provide rationales for why the process of conducting a cost-
benefit analysis of CSR is difficult.

A) philanthropic activities of a corporation are usually undertaken at a discounted cost

to the business

B) the needs and preferences of society change rapidly and often

C) many of the advantages gained such as goodwill are intangible in nature

D) sometimes there are no actual dollar costs involved

Of the following, which trend is least likely to be considered a driving force for businesses to adopt
CSR frameworks?

A) The ready adoption of diversity within organizations

B) The globalization of business

C) The increasing buying power of society

D) The resurgence of environmentalism

One of the most contentious social responsibility issues confronting multinational organizations
pertains to _________.

A) the differing cultural views

B) the varied corporate disclosure practices across borders

C) the lack of research organizations within foreign countries

D) human rights
10

Which one of the following is least likely to be associated with the Sarbanes-Oxley Act of 2002?

A) Strengthening of auditing standards

B) Increased criminal penalties for failure to maintain auditing papers for five years

C) Protection of human rights

D) Revision of acceptable and expected corporate accounting standards

11

Which one of the following statements would be considered false regarding the Sarbanes-Oxley Act
of 2002?

A) It issues new duties of the registered public accounting firms that conduct the audits
of financial statements.

B) It calls for reporting suspected abuses of human rights to the SEC.

C) It includes provisions restricting the corporate control of executives and accounting

firms.

D) It includes rules for attorney conduct.

12

A _____ attempts to measure a company's actual social performance against the social objectives it
has set for itself.

A) corporate philosophy audit

B) social responsibility statement

C) social audit

D) statement of ethical philosophy

13

_________ refers to the moral principles that reflect society's beliefs about the actions of an
individual or group that are right and wrong.

A) Social responsibility

B) Discretionary ethics

C) Ethics

D) Corporate philosophy
14

Of the following, which one is least likely to be considered a methodology that would assist an
organization in satisfying its corporate social responsibility?

A) Corporate executives must remain focused on shareholder value maximization.

B) Corporate executives must find a balance between honoring duties to maximize

shareholder value while still contributing to social responsibility.

C) Corporations must be committed to corporate responsibility and environmental

protection.

D) The concept of corporate social responsibility must be an ongoing process within

organizations of today.

15

The term social initiative describes initiatives that take a/an ________.

A) socially responsible approach

B) strategic management approach

C) collaborative approach

D) ethical approach to decision making

16

Which one of the following would not be considered one of the principles of successful corporate
social responsibility collaboration?

A) Developing short-term objectives

B) Identification of a long-term durable mission

C) Contribution of specialized services to a large-scale undertaking

D) Leveraging of core capabilities

17

Of the following, which one is least likely to be considered a benefit associated with a properly
managed corporate social responsibility program?

A) Pushing back problems that may threaten future generations

B) Building and cementing valuable relationships

C) Enrichment of the lives of many disadvantaged communities and individuals

D) Deferred financial costs

18

Managers who adopt the _______ to ethics judge the effects of a particular action on the people
who are directly involved.

A) social justice approach

B) utilitarian approach

C) principal-agent approach

D) moral rights approach

19

According to the _________, individuals should not be treated differently on the basis of arbitrary
characteristics such as race, sex, religion, or national origin.

A) social justice approach

B) difference principle

C) Sarbanes-Oxley Act of 2003

D) distributive-justice principle

20

All of the following except _______ would be considered methodologies, in which an organization
can engage so as to address the current major trends in codes of ethics.

A) place the organization's code of ethics information within employee handbooks

B) place the code of ethics statement on the organization's Web site

C) provide employee training regarding the workers' responsibilities under the new
code of ethics

D) add enforcement measures to the code of ethics

The construction company owned by Tom and Adam Smith -- T & A Contracting -- faces many
challenges posed by its external environment. Of the following, which factor is most likely to be
classed as belonging in the remote environment of T & A Contracting?

A) Competitors

B) Ecological

C) Labor

D) Suppliers
2

________ factors concern the nature and direction of the economy in which a firm operates.

A) Technological

B) Ecological

C) Social

D) Economic

The social factors that affect a firm involve all of the following except _______.

A) the propensity of people to spend

B) lifestyles of people

C) attitudes of people in the external environment

D) values and beliefs of persons outside the firm

Political constraints are placed on firms through a variety of avenues except which one of the
following?

A) Antitrust laws

B) Fair trade decisions

C) Discretionary responsibility

D) Administrative jawboning

Which of the following is a false statement regarding the fourth set of factors -- technological
changes -- in a firm's remote environment?

A) Technological changes rarely influence or promote innovation within firms.

B) A technological breakthrough can have a sudden and dramatic effect on a firm's

environment.

C) To avoid obsolescence, a firm must be aware of technological changes that might

influence its industry.

D) Creative technological adaptations can suggest possibilities for new products.

The quasi-science of anticipating environmental and competitive changes and estimating their
importance to an organization's operations is best identified as which one of the following?
 A) Ecology

B) Economies of scale

C) Technological forecasting

D) Environmental scanning

The most prominent factor found in the remote environment of businesses is most often that of the
reciprocal relationship between those businesses and the ecology. Specific ecological concerns focus
on all but which one of the following?

A) Global warming

B) Fair labor standards

C) Loss of habitat

D) Air and water pollution

Which one of the following would not be considered a method a firm can engage in to enhance an
eco-efficient strategy?

A) Reducing waste while enlarging product packaging size

B) Controlling property acquisitions and use to preserve habitats

C) Implementing energy-conserving activities

D) Developing corporate standards

The general conditions for competition that influence businesses, which provide similar products
and services is best referred to as a/an ________.

A) remote environment

B) international environment

C) external environment

D) industry environment

10

Of the following, which one is least likely to be used to make an assessment of the economic
environment that is associated with the international dimension of the global environment?
 A) Gross national product

B) Currency convertibility

C) Foreign policy

D) Social infrastructure

11

When discussing the forces associated with driving industry competition, which of the following
would be least likely associated with determinants of entry?

A) Governmental policy

B) Diversity of competitors

C) Proprietary curve

D) Capital requirements

12

Which one of the following would not be considered one of the major sources of barriers to entry?

A) Economies of scale

B) Capital requirements

C) Powerful suppliers

D) Government policy

13

All of the following except _____ would indicate a supplier group is powerful.

A) it is dominated by a few companies

B) its product is at least, differentiated

C) it poses a credible threat of integrating forward into the industry's business

D) it has no built-up switching costs

14

A buyer group would be considered to be powerful if all of the following were present except which
one?

A) It earns high profits.

B) It is concentrated or purchases in large volumes.

 C) The buyers pose a credible threat of integrating backward to make the industry's
product.

D) It purchases standard products.

15

A/an _________ is a collection of firms that offer similar products or services such as IBM, Apple,
and Dell.

A) concentration

B) industry

C) collaborative approach

D) operating environment

16

Defining the boundaries of an industry can be a very difficult task. This difficulty stems from all of the
following except which one?

A) Industries are very static in nature.

B) Industrial evolution creates industries within industries.

C) Industries are becoming more global in scope.

D) The evolution of industries over time creates new threats and opportunities.

17

The U.S. aircraft manufacturing industry is an example of an industry that is _______.

A) plagued by economies of scale

B) concentric

C) eco-efficient

D) highly concentrated

18

The conditions that a company must satisfy in order to be able to enter an industry are best referred
to as its _______.

A) economies of scale

B) barriers to entry
 C) differentiation

D) competitive environment

19

The operating environment of a firm comprises factors in the competitive situation that affect its
success in acquiring needed resources. Which one of the following would not be considered one of
these most important factors?

A) The firm's competitive position

B) The composition of its customers

C) Its ability to attract employees

D) Its reputation in the internal environment

20

All of the following except ________ would be considered true statements about customer profiles.

A) developing a profile of present and prospective customers improves the ability of an

organization to plan strategic actions

B) extensive customer profiling can be considered an invasive and illegal action and so
must be undertaken with discretion

C) assessing customer behavior is a key element in the process of satisfying target

market needs

D) the traditional approach to segmenting customers is based on customer profiles

For the past two years the Broken Arrow Corporation has been planning to expand its operations in
order to reach out to the market arenas of the world. Its future plans include continuation of its
standardized product line to be offered within the new marketplaces. Essentially, the Broken Arrow
Corporation desires to _____________.

A) become a multidomestic industry

B) develop a polycentric orientation

C) embrace globalization

D) engage stakeholder activism

2
As a corporation grows into that of being a global operation, it can expect to undergo the need for
various progressively involved strategy levels. At which level should a corporation most likely expect
to face the challenge of foreign licensing and technology transfer?

A) First level

B) Final level

C) Third level

D) Second level

All of the following except _________ would be considered rationales for why an organization may
wish to globalize its operations in the international marketplace.

A) to gain a competitive weapon

B) realization of domination of the domestic market

C) acquiring opportunities to expand into new industries

D) gaining advantage in technology

When the values and priorities of the parent organization guide the strategic decision making of all
its international operations, it can be said there is a/an _______ present within the organization.

A) polycentric orientation

B) regiocentric orientation

C) ethnocentric orientation

D) geocentric orientation

A corporation with a/an ________ is likely to adopt a global systems approach to its strategic
decision making that empathizes global integration.

A) geocentric orientation

B) ethnocentric orientation

C) regiocentric orientation

D) polycentric orientation

6
The concept of ________ can be exemplified by stating the following: "Operations in more than one
national environment provide opportunities to combine benefits from one location with another,
which is impossible without both of them."

A) prestige

B) economies of scale

C) chance

D) synergy

All of the following would be considered true about a firm at the start of its globalization process
except which one?

A) External assessments must be conducted before a firm enters global markets.

B) Restructuring of the firm's hierarchy must be undertaken prior to entering the

global marketplace.

C) The firm must pay particular attention to the host nation's political control and
economic progress.

D) Internal assessments must be conducted prior to the firm attempting to enter the
global arena.

Which one of the following would not be considered a factor that contributes to the increase in the
complexity found within today's global environment?

A) Global organizations are able to fully utilize differences in industry structures that
are encountered.

B) Global organizations face multiple legal, social, and cultural environments that
change at different rates.

C) Global organizations face extreme competition.

D) Global organizations are restricted in their selection of competing strategies by

various regional and economic constraints.

Of the following, which one is least likely to be classed as creating or contributing to the control
problems a global firm may face?

A) Minimal attention is paid to the host country's goals.

 B) Disposition of earnings is made more complex because of the different financial
environments involved.

C) Various schemes are engaged to shift earnings from one country to another in
avoidance of taxes.

D) Different financial environments simplify the various sources of finance.

10

Demands placed on a global firm by the stakeholders in the environments in which it operates are
best referred to as ______.

A) polycentric orientation

B) regiocentric orientation

C) stakeholder activism

D) social infrastructure failure

11

A/An _______ is an industry in which competition is segmented from country to country.

A) polycentric industry

B) multidomestic industry

C) global industry

D) ethnocentric industry

12

All of the following would be classed as true regarding a multidomestic industry except which one?

A) Competition is segmented from country to country.

B) Competition in one country is independent of competition in other countries.

C) Subsidiaries of organizations should all be managed exactly the same.

D) Retailing and insurance are examples of multidomestic industries.

13

A/An ______ is one in which competition crosses national borders on a worldwide basis.

A) global industry

B) domestic industry
 C) international industry

D) multidomestic industry

14

Due to the rapid changes in the world, experts have indicated that corporate strategic management
planning must be global for a variety of reasons. Which one of the following is least likely to be
recognized as one of these rationales?

A) The scope of the global management task has increased.

B) Global competition has significantly increased.

C) The development of technology improvements has started to decline.

D) The world's stock of knowledge is doubling about every 10 years.

15

Of the following, which one is least likely to be a factor that makes for the creation of a global
industry?

A) The presence of homogeneous product needs across markets

B) The absence of economies of scale

C) Expectancy of consistency of products and services across markets

D) More than one market is required to recapture expenses associated with R&D

16

Which one of the following would not be considered to be a factor that would drive the success of
global companies?

A) Management of subsidiaries is controlled by the home country.

B) Cross-country alliances are formed.

C) Management teams include foreign nationals.

D) Shares are listed on foreign exchanges.

17

If an organization has made the choice to utilize a pure global strategy, which one of the following
would be most accurate about its functional activities?

A) There is most likely low coordination and geographic dispersion of the functional
activities.
 B) There is most likely high coordination and geographic dispersion of the functional
activities.

C) There is most likely low coordination and geographic concentration of the functional
activities.

D) There is most likely high coordination and geographic concentration of the

functional activities.

18

________ refers to the number of critical success factors that are required to prosper in a given
competitive arena.

A) Formality

B) Complexity

C) Diversity

D) Franchising

19

The primary niche market approach for a company that wants to export is to do which one of the
following?

A) Utilize only U.S. product criteria

B) Modify product characteristics to reflect U.S. considerations

C) Prepare to invest large sums of capital

D) Modify select product performance to meet special foreign demands

20

______ is best described as money from private sources that is invested by a venture capital
company in start-ups and other risky small and medium-sized enterprises.

A) Global finance

B) Foreign branching

C) Private equity

D) Joint venturing

Simon Ize is the owner of a company (2-Shine Simon Ize-It) that specializes in a variety of floor
waxing and polishing products. His company managers are in the process of finding answers to such
questions as: How well is our current strategy working? and What is our current situation? In order
to obtain the answers to these types of questions Simon's company is most likely to conduct which
one of the following?

A) Analysis of strengths and weaknesses

B) SWOT analysis

C) Analysis of weaknesses and threats

D) Strategic brainstorming session

The 2-Shine Simon Ize-It Company wants to know the major favorable situations that exist in its
environment. Essentially, the company wants to gain understanding of its _________.

A) strengths

B) weaknesses

C) threats

D) opportunities

All of the following would represent possible threats to the 2-Shine Simon Ize-It Company except
which one of the following?

A) Entrance of new competitors

B) Improved buyer or supplier relationships

C) New or revised regulations

D) Slow market growth

All of the following except which one would be considered a weakness to a business such as the one
owned by Simon Ize?

A) Maturing markets

B) Limited industry expertise

C) Brand name

D) Limited financial resources

5
Utilizing a SWOT analysis diagram, one would expect to find which piece of information about the
company in question in Cell 2?

A) Supports a diversification strategy

B) Supports a defensive strategy

C) Supports an aggressive strategy

D) Supports a turnaround-oriented strategy

All but which one of the following would be considered a limiting factor or influence to a SWOT
analysis?

A) The analysis can overemphasize a single strength.

B) The SWOT analysis can ignore changing circumstances.

C) It can recognize that a strength is always a source of competitive advantage.

D) The analysis can downplay external threats.

________ attempts to understand how a business creates customer value by examining the
contributions of different activities within a business to that value.

A) Internal analysis

B) Value chain analysis

C) A value chain

D) SWOT analysis

Primary activities conducted by a firm are those that are involved in the creation, marketing, and
transfer of the product to the buyer. Which one of the following would not be considered a primary
activity?

A) Procurement

B) Marketing and Sales

C) Inbound logistics

D) Service

9
The activities in a firm that assist the firm as a whole by providing infrastructure or inputs that allow
other activities to take place on an ongoing basis are best known as _________.

A) procurements

B) primary activities

C) secondary activities

D) support activities

10

The initial step in value chain analysis is most often which one of the following?

A) Conducting an internal analysis

B) Determining efficient cost allocations

C) Division of a company's operations into specific activities or processes

D) Study of the social infrastructure

11

Several difficulties are associated with the usage of activity-based cost accounting methods. Of the
following, which one is least likely to be classed as a difficulty associated with this method?

A) Creation of redundant work

B) Identification of sources of differentiation

C) Time and energy involved

D) Efficient allocation of selected resources across multiple activities

12

The _______ is a method of analyzing and identifying a firm's strategic advantages based on
examining its distinct combination of assets, skills, capabilities, and intangibles as an organization.

A) value chain analysis

B) activity-based cost accounting method

C) resource-based view

D) SWOT analysis

13
The tangible assets of a firm such as Gary's Two-Can Tan Company would include all but which one
of the following?

A) Its trademark

B) Its raw materials

C) Its financial resources

D) Its computer systems

14

______ would include the skills that a company uses to transform inputs into outputs.

A) Value chains

B) Intangible assets

C) Organizational capabilities

D) Tangible assets

15

Which one of the following would not be a characteristic that can assist a resource to be considered
valuable?

A) It is critical to being able to meet a customer's need.

B) It is readily available and plentiful.

C) It is durable over time.

D) It drives a key portion of overall profits.

16

Characteristics that make resources difficult to imitate are best referred to as ______.

A) isolating mechanisms

B) causal ambiguities

C) economic deterrences

D) path-dependent resources

17

Isolating mechanisms would include all but which one of the following?

A) Economic deterrence
 B) Causal ambiguity

C) Path-dependent resources

D) Physically similar resources

18

In order to fully utilize the resource-based view in internal analysis, a firm must first identify and
evaluate its resources to find those that provide the basis for future competitive advantage. When
conducting this, it is usually helpful to do all but which one of the following?

A) Look at organizational processes and combinations of resources rather than only

isolated assets or capabilities.

B) Engage in a divisional approach.

C) Utilize a functional perspective.

D) Disaggregate resources.

19

Managers and strategists rely on various perspectives when evaluating how their firms stack up on
internal capabilities. Which one of the following would not be considered one of the perspectives
that is most likely to be used?

A) Comparison with competitors

B) Comparison with past performance

C) Comparison with industry success factors

D) Comparison with previous financial reports

20

Comparing the way one company performs a specific activity with that of a competitor or other
company doing the same thing is called _______.

A) disaggregating

B) brainstorming

C) benchmarking

D) internal analysis

The Stormio Damage Repairio Corporation of Topeka is in the process of establishing its long-term
objectives. These objectives will be used to guide the corporation toward achieving prosperity in its
future years. All but which of the following areas would these long-term objectives need to address?
 A) The ability of the firm to invest in capital equipment this year.

B) The corporation's view of its responsibility to the public.

C) The ability of the firm to attain acceptable levels of profits.

D) The corporation's plans for methods of increasing development of its employees.

There are several qualities the long-term objectives developed by Stormio should posses that will
improve their chances of being attained. All of the following except _________ would be considered
one of these necessary qualities.

A) Understandable

B) Flexible

C) Measurable over time

D) Encompass a one-year time span

A set of measures directly linked to a company's strategy, financial performance, customer

knowledge, internal business processes, and learning and growth is best known as that company's
_________.

A) vision statement

B) balanced scorecard

C) strategic plan

D) corporate mission

The Grinder Up Corporation is a waste disposal business based in Santa Fe. This corporation
possesses unique capabilities that assist it in being able to sustain its current market position. These
capabilities include having secured suppliers of scarce raw materials, continuing dominance in its
market, excellence at efficiencies, and a high degree of capitalization. It is most likely that Grinder
Up engages in which one of the following strategies?

A) Differentiation

B) Focus
 C) Low-cost leadership

D) Concentric diversification

Strategies dependent on ______ are designed to appeal to customers with a special sensitivity for a
particular product attribute.

A) differentiation

B) focus

C) vertical integration

D) conglomerate diversification

The strategy embraced by the Kun-Pow Fortune Cookie Company of Memphis strives to address the
needs of a very select and specialized market segment. Kun-Pow is most likely to engage in which
one of the following types of strategy?

A) Differentiation

B) Generic

C) Focus

D) Concentrated growth

Of the value disciplines proposed by Michael Treacy and Fred Wiersema, which one is best identified
as referring to providing customers with convenient and reliable products and services at
competitive prices?

A) Customer intimacy

B) Operational excellence

C) Horizontal integration

D) Product leadership
8

Companies that implement a strategy of ________ continually tailor and shape products and
services to fit an increasingly refined definition of the customer.

A) customer intimacy

B) consumer differentiation

C) operational excellence

D) product leadership

Companies that pursue the discipline of _______ strive to produce a continuous stream of state-of-
the-art products and services.

A) low-cost leadership

B) focus strategy

C) concentric diversification

D) product leadership

10

Master or business strategies are often referred to as grand strategies. These types of strategies
provide basic direction for strategic actions and are the basis for sustained efforts to achieve long-
term objectives. Which one of the following would not be classed as a grand strategy?

A) Market development

B) Innovation

C) Differentiation

D) Turnaround

11

A grand strategy in which a firm directs its resources to the profitable growth of a single product is
best referred to as ______.

A) Concentric diversification

B) Concentrated growth
 C) Product development

D) Divestiture

12

All of the following are conditions that favor concentrated growth except which one?

A) The industry is resistant to technological advancements.

B) The industry is in the maturity stage of the product life cycle.

C) The firm is willing to settle for little if any growth.

D) The firm's targeted markets are not product saturated.

13

Which one of the following grand strategies is noted as presenting products, often with only
cosmetic modifications, to customers in related marketing areas?

A) Market development

B) Innovation

C) Divestiture

D) Product development

14

_________ involves the substantial modification of existing products or the creation of new but
related products that can be marketed to current customers through established channels.

A) Innovation

B) Differentiation

C) Product development

D) Market development

15

Which of the following is least likely to be true about the grand strategy of innovation?
 A) Few firms utilize innovation as the fundamental means of relating to their markets.

B) It is becoming less and less risky for companies to engage in innovation.

C) Few innovative ideas prove profitable due to the associated costs involved.

D) Costs of promoting a promising idea into a profitable product are quite high.

16

Very large firms are noted for initiating plans to acquire another business because it represents the
most promising investment opportunity that is available to them. This type of strategic maneuver is
best identified as _______.

A) conglomerate diversification

B) divestiture

C) concentric diversification

D) turnaround

17

The grand strategy that involves the reduction of costs and assets by a company in order to survive
and recover from declining profits is best known as _______.

A) divestiture

B) liquidation

C) concentric diversification

D) turnaround

18

A _____ involves the sale of a firm or a major component of a firm.

A) conglomerate diversification strategy

B) divestiture strategy

C) liquidation strategy

D) turnaround strategy
19

All of the following would be true statements regarding the concept of bankruptcy except which one
of the following?

A) Liquidation bankruptcy is also known as Chapter 7.

B) A strategy for a company to engage in to recapture its viability is referred to as

reorganization bankruptcy.

C) Liquidation involves the complete distribution of assets to creditors.

D) Creditors receive full payment of monies owed according to the placement or

ranking of the amounts due them.

20

A _____ is a grand strategy in which companies create a co-owned business that operates for their
mutual benefit.

A) strategic alliance

B) consortia

C) joint venture

D) keiretsus

Which one of the following statements would be considered false about the concept of competitive
advantage?

A) A prominent source of competitive advantage can be found in the business's low

cost structure.

B) Businesses become successful because they possess some advantage relative to

their competitors.

C) Businesses that create competitive advantage from differentiation usually

experience above-average profitability within their industry.

D) Businesses that engage other than a low-cost strategy usually experience below-
average profitability.

The business strategy decided upon by the Ripper Up Remodeling Corporation is one that engages in
value chain activities, which are achieved at a cost that is well below its competitors. In this way, the
competitors can require less money for their services than competitors can. It is safe to say this
corporation is engaging a __________.

A) differentiation strategy

B) strategic alliance strategy

C) retrenchment strategy

D) low-cost strategy

Major Lionel Minor began his own new home construction company when he retired from the Air
Force five years ago. The company has rapidly grown to be very large and has reported earnings of
over $40 million in the past year. Retired Major Minor attributes this high rate of success to his
ability to service his customers at a low price. His organization has to meet several requirements in
order to continually support and sustain this low-cost leadership status. Which of the following
would not be one of these requirements?

A) Tight cost control

B) Avoidance of economies of scale

C) Incentives based on meeting quantitative targets

D) Benchmarking orientation

A business strategy that seeks to build competitive advantage with its product or service by having it
be unique from other available competitive products would be classed as __________ strategy.

A) differentiation

B) market focus

C) low-cost leadership

D) speed-based

All of the following would be considered organizational skills and resources that foster a
differentiation strategy except which one?

A) Strong marketing abilities

B) Products or services designed for ease of manufacture or delivery

C) Corporate reputation for quality or technical leadership

D) Creative talent and flair

6

Sustainable activities that provide all of the following opportunities relative to key industry forces
except _________ should become the basis for differentiation aspects within the business's
competitive strategy.

A) less price sensitivity of buyers

B) rivalry is reduced

C) technological changes increase learning and investments

D) brand loyalty is difficulty for newcomers to overcome

The Tick-Tock Clock Corporation is able to successfully meet the needs of its customers more rapidly
than any of its competitors can. It is most likely this corporation is engaging in which one of the
following business strategies?

A) Differentiation

B) Speed-based

C) Vertical integration

D) Market focus

Through its use of speed-based strategy, the Tick-Tock Clock Corporation is most likely to gain its
competitive advantage by being proficient in all but which one of the following activities?

A) Product development cycles

B) Information sharing and technology

C) Customer responsiveness

D) Product cost leadership

The extent to which a business concentrates on a narrowly defined market is best referred to as
___________.

A) market focus

B) low-cost leadership

C) strategic alliance
 D) retrenchment

10

All of the following would be considered emerging industries of the last decade except _______.

A) online services

B) solar heating

C) airline services

D) fiber optics

11

All of the following except which one would be considered a characteristic of the markets in
emerging industries?

A) There are few entry barriers.

B) There are low initial costs that escalate as time goes by.

C) There is need for high-risk capital to be invested.

D) There may be an inability to obtain sufficient raw materials.

12

For success in the emerging industry setting, business strategies require all but which one of these
features?

A) The ability to shape the industry's structure

B) The ability to rapidly improve product quality

C) The early acquisition of a core group of loyal customers

D) The ability to be self-sufficient

13

Which one of the following would not be considered a necessary requirement of business strategies
for growing industries?

A) The ability to rapidly improve product quality

B) The ability to differentiate the firm's products

C) The ability to establish strong brand recognition

D) Strong product design skills

14 UNANSWERED

________ strategies are those used by firms competing in markets where the growth rate of that
market from year to year has reached or is close to zero.

A) Growth industry

B) Emerging industry

C) Mature industry

D) Declining industry

15 UNANSWERED

At which one of the following stages of evolution would the industry firms most likely sell
increasingly to experienced, repeat buyers, face competition that is more oriented to cost and
service, and competition for market share intensifies?

A) Declining industry stage

B) Mature industry stage

C) Growth industry stage

D) Emerging industry stage

16

Strategic elements of successful firms in maturing industries often include all of the following except
which one?

A) Vertical integration

B) International expansion

C) Careful buyer selection

D) Emphasis on process innovation

17

Firms in a declining industry should choose strategies that emphasize all but which one of the
following?

A) New investments

B) Production efficiency

C) Distribution efficiency

D) Product innovation
18

A _______ industry is one in which no firm has a significant market share and can strongly influence
industry outcomes.

A) declining

B) fragmented

C) maturing

D) global

19

Of the following, which one is least likely to be considered as a generic global competitive strategy?

A) Protected niche

B) Global focus

C) National focus

D) National niche

20

The Times-R-Rough Corporation has decided to cut back on its product lines and reduce the size of
its operations because it can no longer support commitments needed to sustain it. This business is
most likely attempting to engage in _________.

A) divestiture

B) conglomerate diversification

C) retrenchment

D) liquidation

Jerome Washington's company has decided to acquire two other businesses in order to increase its
growth and earning potential. In essence, Jerome's company desires to become a multi-business
company. Which one of the following would be least likely to be considered another valid rationale
for why the company would desire to take this action?

A) The company wants to be able to monopolize a portion of the market segment.

B) The company wants to diversify risks.

C) It wishes to increase vertical integration.

 D) It desires to have an instant market presence without waiting on the process of slow
internal growth.

The market share of a business divided by the market share of its largest competitor equals the
business's ________.

A) relative differentiation strategy

B) BCG growth share matrix

C) portfolio technique results

D) relative competitive position

According the BCG growth-share matrix, which of the following would be most likely to possess a
low market share and a high growth rate?

A) Dog

B) Question mark

C) Cash cow

D) Star

The 1 4 U 2 N V Corporation currently possesses a low share of its available market. Additionally, this
company's portfolio reveals it has extremely low market growth. This business is most likely to be
classed as which one of the following according the BCG growth-share matrix?

A) Dog

B) Question mark

C) Star

D) Cash cow

All of the following would be considered reasons for why the industry attractiveness-business
strength matrix offers improvement over the BCG matrix except _________.

A) the terminology used is preferred and more understandable

B) it reduces the need for strategy formulation

 C) the measures tap many additional factors

D) it brings to light important considerations in strategy implementation

Which one of the following would not be classed as a necessary financial strength factor to be
considered when a company is constructing its industry attractiveness-business strength matrix?

A) Solvency

B) Cash flows

C) Sales volatility

D) Break-even point

7 UNANSWERED

The Ride 'Em Cowboy Western Wear Corporation of Houston is very efficient in maintaining low
overhead costs. This corporation has excellent skills in operational efficiency and cost management.
However, it faces few sources of advantage within its industry, with most of those being quite small.
Under which of the following industry environments is this corporation most likely to be placed?

A) Specialization businesses

B) Stalemate businesses

C) Volume businesses

D) Fragmented businesses

Businesses with many sources of advantage that are characterized by high levels of skill in achieving
differentiation such as product design and innovation would most likely be classed as which one of
the following under the BCG's strategic environments matrix?

A) Volume business

B) Fragmented business

C) Stalemate business

D) Specialization business

Feedback: The answer is D. Please see the discussion under BCG's Strategic Environments Matrix,
page 268.

9
Which one of the following would not be considered a contribution to strategic analysis through the
organizations' use of the portfolio approach?

A) It does not address how value is created across business units.

B) It helps to convey large amounts of information about business units in a simplified

format.

C) It serves to convey rationales behind corporate strategies in an easily

understandable manner.

D) It simplifies priorities for sharing resources.

10 UNANSWERED

In multi-business organizations, there are many opportunities to build value or sharing. Which one of
the following would be least likely to be considered a potential competitive advantage for
organizations sharing common distribution channels?

A) Lower distribution costs

B) Enhanced bargaining power for shelf space

C) Improved input quality

D) Enhanced bargaining power to achieve better profit margins

11

When making evaluations of multi-business companies, impediments to achieving enhanced value

through operating opportunities are most likely to include all but which one of the following?

A) Input needs are different.

B) Lower input costs

C) Inputs are needed at different plant locations.

D) Centralized purchasing is not responsive to the separate needs of the various plants.

12

All of the following would be considered to be true statements regarding organizations that embrace
the synergy approach except __________.

A) The businesses must be related in ways that make the core competencies beneficial.

B) The combination of competencies must be difficult to re-create.

C) Each company's core competencies should provide a relevant competitive

advantage to the business.
 D) One of the businesses must possess all the stronger core competencies for the
approach to work effectively.

13

The ______ perspective sees multi-business companies as creating value by influencing the
businesses they own.

A) parenting framework

B) synergy approach

C) portfolio

D) patching

14

There are various places organizations can look to obtain parenting opportunities that can become
the focal points of strategic analysis across multiple businesses. Which one of the following would
not be considered a place for this type of opportunity to be found?

A) Size and age of the company

B) Common capabilities

C) Internal weaknesses

D) External relationships

15

Excessive diversification, under or over investment during business cycle swings, and lengthy
product life cycles are all examples of ______ found within the parenting framework.

A) linkages

B) predictable errors

C) major changes

D) common capabilities

16

The executives of the Johnson Submarine Corporation are facing rapid changes taking place within
the available market opportunities of the organization. These executives have decided to "remap"
the business so as to better match these quick changes. This "remapping" approach is best referred
to as _________.

A) patching
 B) strategic positioning

C) retrenchment

D) strategic processing

17

All of the following are true about the concept of patching except which one of the following?

A) Patching is a process of remapping a business.

B) Patching focuses on the role and ability of managers to create value in the
management of multi-business companies.

C) Patching is a costly undertaking with an anticipated low return on the investment.

D) Patching can take the form of splitting or combining chunks of the businesses.

18

Critical business undertakings such as decision making, operational activities, and sales activities are
often referred to as an organization's ________.

A) strategic positioning

B) strategic processes

C) maturation

D) globalization

19

_________ is the way a business is designed and positioned to serve target markets.

A) Volume business

B) Global focusing

C) Strategic positioning

D) A parenting framework

20

Of the following, which one would not be considered a type of simple rule for flexibility that can help
executives manage the different aspects of seizing opportunities?

A) Boundary rules

B) Timing rules
 C) Entrance rules

D) Priority rules

Measurable outcomes that are designed to be achievable in one year or less of the company's life
are called ___________.

A) corporate missions

B) downsizing

C) short-term objectives

D) re-engineering

Short-term objectives are more consistent when they clearly indicate all but which one of the
following?

A) What is to be accomplished?

B) How will it be accomplished?

C) When will it be accomplished?

D) Who will make the decisions?

The key, routine activities that must be undertaken in each business area -- such as marketing,
finance, and operations -- that provide the business's products and services are called _________.

A) policies

B) functional tactics

C) short-term objectives

D) golden parachutes

Functional tactics are different from business or corporate strategies in all but which one of the
following ways?

A) Costs incurred

B) Specificity

C) Participants who develop them

D) Time horizon
5

The Up and At 'Em Clock Company of Vermont recently began to provide its employees with training
and development that is provided by a Boston-based firm. The company has found this new method
to be cost effective and time saving. It can be stated that the Up and At ‘Em Clock Company is
engaging the use of ________.

A) empowerment

B) outsourcing

C) functional tactics

D) policy regeneration

________ are directives designed to guide the thinking, decisions, and actions of managers and
subordinates in implementing a firm's strategy.

A) Short-term objectives

B) Functional tactics

C) Policies

D) Golden handcuffs

The act of allowing an individual or team the right and flexibility to make decisions and initiate
actions is best referred to as which one of the following?

A) Re-engineering

B) Empowerment

C) Outsourcing

D) Delegation

An organization's formal, written polices have several advantages. Which one of the following would
not be considered one of these advantages?

A) They systematically enhance indirect control.

B) They require managers to think through the policy's meaning and intended use.

C) They make equitable treatment of problems more likely.

 D) They decrease the need for elaborate business strategy implementation processes.

The type of executive bonus compensation that is noted for promoting longer executive tenure than
other forms is which one of the following?

A) Golden parachutes

B) Cash based on internal business performance using financial measures

C) Restricted stock plans

D) Stock option grants

10

When discussing executive bonus compensation plans, the right to purchase company stock at a
fixed price at some future date is called ________.

A) stock options

B) restricted stock

C) golden handcuffs

D) golden parachutes

11

Which of the following types of executive bonus compensation is most likely to have the
shortcoming of achievement of compensation whether or not wealth is created for shareholders of
the company?

A) Restricted stock plans

B) Golden parachute

C) Golden handcuffs

D) Stock option grants

12

All of the following would be considered a type of executive bonus compensation except ________.

A) Restricted stock plans

B) Golden handcuffs
 C) Cash

D) Golden whips

13

Under which one of the following plans would the executive's compensation be based on the
difference between the item's initial price and its selling or exercised price?

A) Stock options

B) Restricted stock plan

C) Golden parachute

D) Golden handcuffs

14

Of the following, which one is least likely to be considered true when discussing the concept of stock
options?

A) Stock option plans often lack the benefits of plans that include true stock ownership.

B) Smart use of stock options and other incentive compensation boosts organizational
performance.

C) Stock options provide no actual upside potential for executives.

D) Executive stock option plans may induce management to undertake more risky
projects.

15

A/An ________ is designed to provide benefits of direct executive stock ownership.

A) golden parachute plan

B) restricted stock plan

C) functional tactic plan

D) outsourcing

16

All of the following statements except ________ would be considered true regarding the concept of
restricted stock plans.

A) The executive is free to sell the company shares at any time.

B) In a typical plan, the executive is given a specific number of company stock shares.
 C) These plans are contingent upon a certain vesting period.

D) Performance provisions instilled within the plan can help ensure the executive is not
compensated without achieving some level of shareholder wealth creation.

17

_____________ refer(s) to either a restricted stock plan or to a bonus income deferred in a series of
annual installments.

A) Golden parachute

B) Stock option plans

C) Golden handcuffs

D) Functional tactics

18

A form of bonus compensation that is designed to retain talented executives and which calls for a
substantial cash payment if the executive quits, is fired, or retires is best known as a/an __________.

A) golden stock option

B) golden parachute

C) golden glove

D) golden handcuff

19

All of the following except which one would be considered true about golden parachutes?

A) Golden parachutes may contain covenants that allow executives to cash in on

noninvested stock compensation.

B) The popularity of golden parachutes has grown over the last decade.

C) Golden parachutes do not involve the maximization of stockholder wealth.

D) The parachutes are considered golden because of the size of the cash payments
involved.

20

If an organization has the strategic goal of improving its operational efficiency, which one of the
following compensation plans would it most likely incorporate?

A) Golden parachutes
 B) Restricted stock plans

C) Cash

D) Golden handcuffs

Tom's sandwich shop in Asheville is likely to most effectively engage in which of the following types
of organizational structure?

A) Functional

B) Divisional

C) Matrix

D) Simple

Of the following, which one is false regarding a functional organizational structure?

A) The tasks, people, and technologies necessary to do the work of the business are
divided into separate groups.

B) Functional structures predominate in firms with single or narrow product lines.

C) Marketing, operations, and finance would be considered groups found within this
type of structure.

D) An organization using this type of structure has no need for integrating activities.

Strategic advantages of a functional organization structure would include all but which one of the
following?

A) Delegation of day-to-day operating decisions

B) Promotes functional rivalry

C) Tightly links structure to strategy

D) Retains centralized control of strategic decisions

Which type of organizational structure is best identified as having a set of relatively autonomous
units or divisions that are governed by a central corporate office yet each unit or division has its own
functional specialists who provide services or products that are different from the other units.

A) Divisional structure
 B) Matrix

C) Simple

D) Formal

Which of the following is best identified as being an adaptation of the divisional structure in which
various divisions are grouped together based on some common elements?

A) Holding companies

B) Strategic business units

C) Vertical boundaries

D) Modular organizations

Strategic disadvantages associated with a divisional organizational structure would include all of the
following except _________.

A) creates a potential for policy inconsistencies among divisions

B) increases cost through duplication functions

C) retains functional specialization within each division

D) creates difficulty maintaining overall corporate image

The ________ structure is where the corporate entity is a broad collection of often unrelated
businesses and divisions such that the corporate entity must act as a financial overseer.

A) divisional

B) holding company

C) matrix

D) external interface

All of the following except which one would be classed as true statements regarding the matrix
organizational structure?

A) It is fairly simple to implement within an organization.

 B) The functional and staff personnel are assigned to both a basic functional area and
to a project or product manager.

C) It combines the advantages of functional specialization and product-project

specialization.

D) It is rather easy to design.

Of the following, which one is least likely to be considered a strategic advantage derived from a
matrix organizational structure?

A) It gives middle management broader exposure to strategic issues.

B) It fosters creativity and multiple sources of diversity.

C) It can trigger turf battles.

D) It provides excellent training ground for strategic managers.

10

A _________ organizational structure assigns functional managers and specialists to a new product,
project, or team that is empowered to make major decisions about their product.

A) product-team

B) matrix

C) simple

D) self-management

11

Which one of the following would not be classed as one of the major trends driving decisions about
effective organizational structures in the 21st century?

A) Globalization

B) Diversity

C) Speed of decision making

D) The Internet

12

Major efforts to improve traditional organizational structures seek to do all but which one of the
following?
 A) Reduce unnecessary control

B) Focus on enhancing core competencies

C) Keep organizations protected from outside influences

D) Reduce costs

13

_________ is redesigning an organizational structure with the intent of emphasizing and enabling
activities most critical to the firm's strategy to function at maximum effectiveness.

A) Restructuring

B) Re-engineering

C) Downsizing

D) Outsourcing

14

Who or what is attributed with popularizing the concept of business process re-engineering (BPR)?

A) Michael Champy and James Hammer

B) The Motorola company

C) Michael Hammer and James Champy

D) IBM

15

_________ eliminates the number of employees -- particularly those of middle management -- in a

company.

A) Restructuring

B) Downsizing

C) Re-engineering

D) Outsourcing

16

Which of the following allows work teams or groups to supervise their work without direct
supervision exercising the supervisory role?

A) Self-management
 B) Restructuring

C) Outsourcing

D) Agility

17

All of the following except which one would be considered a true statement regarding a virtual
organization?

A) It may be comprised of suppliers, customers, competitors, and subcontractors.

B) It is an elaborate network of external and internal relationships.

C) It is a permanent network of independent companies.

D) It is linked primarily by information technology in order to share skills and market

access.

18

A _____ organization provides products or services using different, self-contained specialists or

companies brought together to contribute their primary support activity to result in a successful
outcome.

A) virtual

B) modular

C) matrix

D) vertically bound

19

Expectations indicate that which one of the following will reach more than $200 billion in revenues
in 2008? (It is also considered to be the most rapidly growing segment of the outsourcing segments.)

A) Business process re-engineering

B) External interfacing

C) Business process outsourcing

D) Business process restructuring

20

Which one of the following would not be classed as a disadvantage derived from utilizing
outsourcing?
 A) Reliance on outsiders

B) Skills can become lost

C) Reduction of necessary capital investment

D) Negative reactions from investors

The CEO of the Baxley Corporation has a clear sense of where he wants the corporation to go and
also knows exactly what results are desired and necessary. It can be stated Baxley's CEO has which
one of the following?

A) Vision

B) Perseverance

C) A leader's passion

D) Strategic intent

Of the following, which one would be considered when discussing the concept of a leader's
business vision?

A) A leader must clearly communicate the fundamental vision of what the business
needs to become.

B) The leader's vision should clarify strategic intent.

C) A strategic plan is needed more than a leader's vision in organizations desiring to

globalize operations.

D) A leader's vision characterizes what the company must become in order to achieve
global leadership.

Problems leaders may face when they are attempting to build their organizations include all but
which one of the following?

A) Clarifying responsibilities

B) Surrendering organizational control to lower-level subordinates

C) Gaining personal commitment to a shared vision

D) Keeping abreast of what is happening in the surrounding environment

The effort to familiarize future leaders with the skills important to the company and to develop
exceptional leaders among the mangers employed is best known as __________.
 A) leadership development

B) strategic intent

C) strategic leadership

D) organizational culture

__________ are fundamental personal standards that guide your sense of honesty, integrity, and
ethical behavior.

A) Morals

B) Principles

C) Ethical standards

D) Referent influences

Of the following, which one is best identified as the capacity to see a commitment through to
completion long after most other people would have stopped trying?

A) Vision

B) Principles

C) Perseverance

D) Passion

Jason is highly committed to what he does for his company and also to what he wants to do with his
company in the future. It can be stated that Jason has _______.

A) a leader's perseverance

B) a leader's passion

C) a leader's principles

D) organizational leadership capabilities

Important ways leaders can shape an organization's culture would include all but which one of the
following?
 A) Require self-fulfillment

B) Have vision

C) Have perseverance

D) Guided by staunch principles

Which one of the following is not classed as being one of the characteristics of emotional
intelligence?

A) Self-awareness

B) Social awareness

C) Self-serving viewpoint

D) Self-management

10 UNANSWERED

Many new organizational managers expect to be able to rely on which type of power in order to get
things accomplished?

A) Position power

B) Referent power

C) Legitimate power

D) Information power

11

_______ power refers to the ability to influence and direct others that comes from being able to
confer desired items in return for desired actions or outcomes.

A) Punitive

B) Reward

C) Information

D) Position

12

The ability to direct and influence others because they defer to you based on your specialized
knowledge that is related to the task or assignment in which they are involved is known as which
one of the following?
 A) Punitive power

B) Peer influence

C) Expert influence

D) Information power

13

_________ is the ability to influence individual behavior among members of a group based on the
group norms.

A) Peer influence

B) Position power

C) Referent influence

D) Leader perseverance

14

The set of important assumptions that members of an organization share in common is best referred
to as ___________.

A) leader's perseverance

B) ethical standards

C) organizational culture

D) organizational leadership

15

All of the following statements regarding organizational culture and the leader's role are considered
true except which one?

A) The leader and the culture of an organization are intertwined.

B) Organizational culture is derived solely from a leader's passion and perseverance.

C) The leader acts as the personification of the organization's culture.

D) What a leader does or should do represent influences on the organization's culture.

16

Which one of the following would be considered untrue about a leader who has held his or her
position with the organization for an extended period of time?

A) Long-term leaders are rarely affected by the organization's culture.

 B) Long-term leaders tend to reinforce an organization's culture.

C) Long-term leaders tend to reinforce the organization's culture as a key element

necessary to sustain continued success.

D) Long-term leaders and their association with the organization are usually strongly
entrenched.

17

______ are a person's basis for differentiating right from wrong.

A) Principles

B) Intentions

C) Ethical standards

D) Cultural influences

18

Which one of the following is not a lesson that can be learned from the WorldCom scandal?

A) Beware of companies that rely too heavily on managers and acquisitions.

B) Beware of companies with strong corporate cultures.

C) Beware of companies with cult-like cultures.

D) Beware of close personal ties between management and the board of directors.

19

Ways leaders can shape and reinforce organizational culture would include all but which one of the
following?

A) Emphasize key themes

B) Encourage dissemination of stories about core values

C) Emphasize the need for self-fulfillment

D) Emphasize dominant values

20

The most typical beliefs that shape organizational culture include all of the following except
_________.

A) a belief in being the best

 B) a belief in the importance of people

C) a belief in the importance of formal communication

D) a belief that customers should reign supreme

Managers who are in charge of the success of an organization's strategy typically are concerned with
all but which one of the following?

A) Are our assumptions about key trends ?

B) Are objectives being met?

C) Are we moving in the proper direction?

D) How are we doing in comparison to our closest competitor?

Which one of the following would not be considered a basic type of strategic control?

A) Premise control

B) Implementation control

C) Feedback control

D) Strategic surveillance

Which one of the following strategic controls would have the basic characteristics of a high degree of
focusing, a high degree of formalization in data acquisition, can be used with company- and strategy-
specific factors, and have key strategic thrusts and milestones as objects of control?

A) Premise control

B) Implementation control

C) Special alert control

D) Strategic surveillance

Every strategy is based on certain assumptions and predications. ________ control is designed to
check systematically and continuously whether or not what the strategy is based on is still valid.

A) Premise

B) Implementation
 C) Special alert

D) Strategic surveillance

_________ control is designed to monitor a broad range of events inside and outside the firm that
are likely to affect the course of its strategy.

A) Premise

B) Strategic surveillance

C) Implementation

D) Special alert

Which one of the following is best described as being a thorough, often rapid reconsideration of the
firm's strategy because of a sudden, unexpected event?

A) Implementation control

B) Strategic surveillance control

C) Special alert control

D) Premise control

Which one of the following would not be considered a basic type of implementation control?

A) Strategic thrusts

B) Milestone projectiles

C) Strategic projects

D) Milestone reviews

Implementation control is enabled through all of the following operational systems except _______.

A) incremental innovation

B) budgets

C) key success factors

D) schedules
9

An alternative approach linking operational and strategic control, named the balanced scorecard,
was developed by which of the following persons?

A) David Kaplan and Robert Norton

B) Daniel Norton and Robert Kaplan

C) Robert Kaplan and David Norton

D) Daniel Kaplan and Robert Norton

10

_________ is the creation of new products or processes through the development of new
knowledge or from new combinations of existing knowledge.

A) Invention

B) Continuous improvement

C) Innovation

D) Incremental innovation

11

The initial commercialization of invention by producing and selling a new product, service, or process
is best known as which one of the following?

A) Incremental innovation

B) Innovation

C) Continuous improvement

D) Invention

12

The Japanese term kaizen is also known as _______.

A) total quality management

B) innovation

C) continuous improvement

D) Six Sigma
13

Which of the following companies is noted for effectively utilizing CCC21?

A) Toyota

B) Boeing

C) Honeywell

D) Polaroid

14

There are a variety of essential elements that can lead an organization to meaningful incremental
innovation. Which one of the following is not considered to be one of these elements?

A) Define quality and customer value

B) Develop a customer orientation

C) Develop strong organizational culture

D) Adopt an error-free attitude

15 UNANSWERED

Successful innovations are noted for having certain defining characteristics. Which one of the
following would not be classed as one of these characteristics?

A) Moderately new to the marketplace

B) Based on untested technology

C) Meets customers' needs

D) Saves money for users

16

Which one of the following would be not be considered a way that identifies how the ides for
innovation may have originated?

A) Existing practices

B) Solution spotting

C) Trend following

D) Random events

17
____________ is/are a term used to characterize breakthrough innovation that shakes up or
revolutionizes industries with which they are associated even though they often come from different
origins or industry settings.

A) Incremental innovation

B) Milestone reviews

C) Disruptive innovation

D) Strategic thrusts

18

Behavioral and psychological characteristics that are usually associated with successful
entrepreneurs include all but which one of the following?

A) A strong desire to achieve

B) An external locus of control

C) Tolerance for ambiguity and stress

D) Orientation toward goals and opportunities

19

_________________ is the money provided to the venture that must be repaid at some point in
time.

A) Equity financing

B) Equity funding

C) Debt financing

D) Debt reaffirmation

20

According to Dr. Gordon Pinchot, which one of the following is not considered a factor that needs to
be present in organizations wishing to encourage intrapreneurship?

A) Tolerance of risk, failure, and mistakes

B) Multiple options available

C) Close ties to competitors

D) Freedom from turfness