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Strategic management is one decision that determines the short-term performance of a corporation. (p.2) Answer: F 2. With externally oriented planning, plans are developed by heavily involving the input of managers from lower levels. (p.3) Answer: F 3. One of the benefits of strategic management is a clearer sense of vision for the firm. Answer: T 4. Globalization is the internationalization of markets and corporations. Answer: T 5. Electronic commerce is the use of the Internet to conduct business transactions. Answer: T 6. One member of the European Union (EU) is Chile. Answer: F 7. The goal of NAFTA is complete integration with regard to trade. Answer: F 8. Chile may be a part of NAFTA and Mercosur. Answer: F 9. The rise of the Internet has not had much impact on the nature of competition. Answer: F 10. Knowledge is viewed as a competitive advantage. Answer: T 11. (p.4) (p.5) (p.5) (p.6) (p.6) (p.6) (p.7) (p.7)
Population ecology is a theory that proposes organizations can and do adapt to change by imitating other successful organizations. (p.7) Answer: F 12. With organizational learning theory, knowledge is used as a way to hedge a changing environment. (p.8) Answer: T 13. Strategic flexibility is the ability to shift from one dominant strategy to another. Answer: T 14. One tenet of the learning organization is to maintain stability. Answer: F 15. The internal environment includes the variables of opportunities and threats. Answer: F 16. Objectives are the end result of planned activity. Answer: T 17. Corporate strategy occurs at the business unit or product level. Answer: F (p.8) (p.8) (p.10) (p.12) (p.13)
less than one month. one quarter. c. the time horizon with each phase. (p. d. 22. d. (p. d. Answer: T 19. d. looks at the managerial decisions. (p.18.2) (p. Answer: T 20. Research suggests that strategic management evolves through four sequential phases in corporations. (p. externally-oriented planning. reviews the long-run performance of the corporation. forecast-based planning incorporates internal and external information. scanning the external environment. b. c. more than five years. c. investigates competitive actions and responses. historical concerns. e. 23. examines environmental opportunities and constraints. The time horizon involved with regard to basic financial planning is usually a. is an integrative orientation from the organization's perspective. e. formulating general guidelines. (p.16) Answer: F Multiple Choice 21.3) 25. c. strategic management. more than three years. d. basic financial planning utilizes scenarios.13) (p. b. e. b. b. basic financial planning utilizes consultants. basic financial planning.2) In contrast to strategic management. one year. c.15) Performance is evaluated at the strategy formulation phase of the strategic management process. The difference between basic financial planning and forecast-based planning is a. scanning the internal environment. A hierarchy is a group of strategy types by level in the organization.3) 104 . forecast-based planning. both a and b are correct. efficient utilization of assets. A budget is a statement of a corporation’s programs in terms of dollars. e. Strategic management differs from business policy through its heavier emphasis on a.3) 24. (p. the primary focus of business policy a. internally-oriented planning. The first phase is a. e. b.
26. which is NOT one of the strategic questions that an organization must ask itself? a.3) a. b. c.3) 27. higher levels of job satisfaction. should encourage a clear delineation between top management and lower-level managers. b. c. don't fix it. d. all of the following were rated as benefits of strategic management EXCEPT (p. basic financial planning. e. operational personnel. Under the phase of strategic management. must be elaborate to allow for future growth. where will the organization be in one year? If the evaluation is negative. c. e. b. e. b. should be instigated only from the main corporate office.4) 31. d. strategic management. improved understanding of a rapidly changing environment. middle management. none of the above (p. is unnecessary and a waste of time. Strategic planning in a multidivisional corporation a. strategic information is available to a. where will the organization be in 10 years? 30.4) 105 . Where is the organization now? How can functional and operational areas be improved? If no changes are made. forecast-based planning. (p. people throughout the organization. d. d. if it's not broken. c. c. may be informal and irregular. sharper focus on what is strategically important. what specific actions should management take? If no changes are made. (p. d. b. externally-oriented planning. should always be formalized and explicitly stated. (p. none of the above (p. e. should be accomplished quickly to decrease the likelihood of it becoming outdated. should be a formalized and sophisticated system. e. 32. d. Strategic planning within a small organization a.4) 29. clearer sense of vision for the firm.4) should be informal to allow complete understanding by the many participants. In a survey of 50 corporations. The lesson learned by Maytag Corporation in 1978 was that a. the top management responsible for decision making.4) a. When an organization is evaluating its strategic position. c. should be done by the president only. Top-down planning that emphasizes formal strategy formulation and leaves the implementation issues to lower management levels is known as (p. none of the above 28. b. e.
Brazil. c. Turkey. additional human resource training. increased union negotiations. 34.6) 106 . NAFTA. Belgium. c. e. Mercosur. France. Argentina. e. ASEAN. nationalization. f. b. One of the countries to become a member of the European Union by 2006 is (p. (p. to diversify too widely is dangerous. Greece.6) 36. (p. its existing product line was NOT satisfactory. c. NAFTA. d. Members of the European Union (EU) include a. c. regionalization. Mercosur. d. economies of scale.5) The internationalization of markets and corporations is called a.b. c. 38. normalization. Uruguay. Both c and d are correct. e. b. Canada. the United States. b. (p. d. d. its existing product line was satisfactory. higher production costs. d. Portugal. and Mexico are affiliated with the trade alliance a. Cyprus. globalization. 33. EU. Lithuania. ASEAN.6) a. economic integration. One of the benefits of globalization is a. (p. 37. d. c. e. ABUP. EU. Malaysia. increased taxes. and Paraguay is called (p. b. The regional trade association composed of Argentina. d. it should specialize in the field it knew best. b. b.5) 35.6) a. c. e.
c. disintegration.6) 45. Mercusa. Uruguay. NUSFTA. d. El Salvador. (p. none of the above.7) 107 . (p. 1994. Cuba. The currency of the European Union (EU) is called the a. dollar. e. e. a. d. c. NAFTA was launched during the year a. euro. Great Britain. Brazil. goods sold in the NAFTA trade alliance must have _____ North American content. 44. intermediation. e. c. b. In order to qualify for duty-free status. b. 1993.6) One country that has been extended a free-trade agreement by Mercosur is a.6) 41. (p. c. c. c.6) 43.e. e. (p. b. 1990.6) a. disengagement. (p. e. d. c. 50.5% (p.5% 70. One country being considered for NAFTA membership and Mercosur affiliation is a.6) 39. b. Mercosul. 40. e. d. b. 2000. intermediary. eurosha. b. b. Mercasa.5% 72. d. Mercosur. Bolivia. Chile. d. d. disintermediation. The breaking down of traditional distribution channels is referred to as a. China. peso. the United States. 1992. Mercosur is referred to as _____ in Portuguese. 42.5% 62. none of the above (p. Mexico.
contingency management. chaos formulation. c.7) 47. _____ theory proposes an established organization can suffer from inertia. The ability of a corporation to shift from one dominant strategy to another is called a. b. strategy implementation.7) a. e. logical incrementalism. c. changing competition. educational institution. strategic flexibility. acquiring.8) a. e. 108 . b. institution theory. c. the transformation of companies. b. citizenship theory.8) 48. population institution strategic choice organizational learning organizational citizenship 49. d. hypercompetitive competitor. learning organization. d. d. c. and transferring knowledge are characteristics of a(n) _____ organization.46. An organization skilled at creating. sample theory. 52. d. d. protectionist borders. c. Creating.8) 51. e. All of the following reflect trends due to the rise of the Internet EXCEPT a. e. a. c. d.8) a. strategically managed corporation. c. b. The theory that proposes organizations can and do adapt to changing conditions by imitating other successful organizations is known as (p. The ability of an organization to reshape its environment is described by _____ theory. e. e. and at modifying its behavior to reflect new knowledge and insights is a(an) (p. changes in market access and branding. b. acquiring. Institution Strategic choice Population Organizational learning Organizational change (p. b. strategic theory. (p. shift of power to the consumer. (p. and transferring knowledge. (p. b. learning adapting stagnant innovative none of the above (p.7) 50. a. population ecology. d.
d. terminal.W. technical. e. experimenting with new approaches. and disseminating of information from the external and internal environments to key people within the corporation is referred to as a. strategy implementation.8) All of the following reflect activities of a learning organization EXCEPT a. a. entrepreneurial firm. b. e. d. e. c. culture.O. alienating competitors in the industry.e. b. 53. b. (p. b. The T in S. b. and resources pertain to the _____ environment.9) a. c. environmental opportunity scanning. environmental scanning. external internal coincidental strategic none of the above (p. strategy formulation strategy implementation statistical process control evaluation and control environmental scanning (p. none of the above (p.9) 57. Which one of the following is NOT included in the strategic management process? (p. strategies. The development of long-range plans for the effective management of environmental opportunities and threats is known as (p. The S in S. c.O. learning from its own experiences and past history. e. d. task. solving problems systematically. transferring knowledge quickly and efficiently.9) 55. 54. The monitoring. 109 .T. e. internal scanning. d. stands for a. The variables structure. c. Strategic management is that set of managerial decisions and actions that determine the long-run performance of a corporation. d. c.10) a. c. external scanning.10) 59. strengths. d.T. threats.W. societal. evaluating. scanning.9) 58. none of these 56. stands for a. b. trust. (p. strategy formulation. b. e.
10) 63. (p.Strategies -.Procedures -. strategy development. d. d. Which one of the following is included in the firm's internal environment? a. Procedures -. includes those elements or groups within an organization's industry.Programs. Mission -. c. e.Strategies -. d. Policies -.c.Objectives -.Objectives. c.10) 64. b. b. c.Objectives.10) 65. A statement of corporate objectives. strategy evaluation. d.Programs. e. c. encompasses the physical working areas of the organization.Mission. e. Which one of the following is included in the firm's task environment? a. b. A description of top management's responsibilities. Mission -.Budgets -.Policies -. e.10) 66.Procedures -.Budgets.10) 62. strategy control.Policies. 61.Policies -.Mission. (p. d. (p. b. Programs -. d. (p. is an advisory committee to top-management. c.Strategies -. technological factors sociocultural factors economic factors stockholders none of these (p. c.Programs -.10) 110 . 60. e.Budgets -. A description of the activities carried out by the organization. c. e.Strategies -. Which one of the following is included in the firm's societal environment? a. The task environment a. e.Procedures. The corporate mission is best described by which one of the following? a.Mission -. b. Strategy Implementation in the Strategic Management Model occurs in the following order: a. b.Objectives -. resources political-legal forces customers economic forces stockholders (p. Programs -.10) The Strategic Management Model presents the following process of strategy formulation: a. Budgets -. is an accounting of the many jobs within an organization. The purpose or reason for the corporation's existence. includes general forces that only indirectly affect an organization's activities. d. d.Strategies -. Budgets -. Objectives -. Policies -. b. competitors economic forces resources governments special interest groups (p.Procedures.
Divide a sales region into a group of sales districts. promotes the company’s social responsibility. improve company reputation company survival increase profits market leadership raise ROI by 10% next year (p. Pay highest salaries to keep high quality employees. b.T. should have a different mission statement for each subsidiary division.e. d. b. A goal differs from an objective because it a. e. is clearly specified. Increase sales by 10% over last year. c. d. e. states what the organization would like to become. Develop and sell quality appliances worldwide. (p. e. specifies measurable results. d. Which of the following is an example of an objective? a. A mission statement differs from a vision statement because a vision statement a. The philosophy of the founder. c. c. c. 69. e. Increase sales by 10% over last year. The organization's corporate mission statement a.12) 72. b.12) a. b. Which one of the following is an example of a narrow scope? (p.W. Develop and sell quality appliances worldwide. is quantified. c. Divide a sales region into a group of sales districts.11) 111 . indicates the reason for the organization’s existence. Which one of the following is an example of an objective? a.O. 67. should set the organization apart from its competitors. (p. d. (p. e. provides a time horizon. b. explains past failures and successes. d. should describe the organization's S. b.12) 68. d. should state long-range plans for management. b. is open-ended. (p. c. Pay highest salaries to keep high quality employees. should be less formally stated to allow for growth. proposes ways to improve profitability.12) 73. transportation (vs railroads) computers (vs office equipment) health care (vs hospitals) real estate (vs apartments) telecommunications (vs television) (p. d.12) 71. Which of the following is an example of a mission? a. Diversify product line to appeal to more people.12) 70. e. e. c. Diversify product line to appeal to more people.
Corporate -. e. 78.13) a. Increase sales by 10% over last year. business. b.14) 112 . Which of the following is an example of a strategy? a. (p. Increase sales by 10% over last year.Functional. functional. operational. a comprehensive master plan stating how a corporation will achieve its mission and objectives. c. Divide a sales region into a group of sales districts. b. Diversify product line to appeal to more people. business. b. corporate. a policy is a.Corporate -. e. d. 76. (p. c. operational. The type of strategy which emphasizes the improvement of the competitive position of a corporation's products or services in a particular industry or market segment served by a business unit is (p. Business -.13) a. the purpose or reason for a corporation's existence.Divisional -. e. environmental.Business -. a statement of activities or steps needed to accomplish a single-use plan. Which of the following is an example of a policy? a.Functional. Industry -.74. d. b. corporate. multidivisional business has three levels in its hierarchy of strategy: a. e.13) 79. operational. The type of strategy which achieves corporate and business unit objectives and strategies by emphasizing resource productivity is a. c. Environmental -. functional. (p. c. (p.Functional. d. functional. Diversify product line to appeal to more people.13) 75. d. corporate. business. c. e. As defined in this course.Corporate. environmental. Develop and sell quality appliances worldwide. b. a broad guideline for making decisions. The type of strategy which describes a company's overall direction in terms of its general attitude toward growth and the management of its various businesses and product lines is (p. Environmental -. d. c. (p. environmental. A large. b.Enterprise -.14) 80. e.Divisional.13) 77. b. Pay highest salaries to keep high quality employees.Corporate -. a statement of a corporation's programs in dollar terms. d.
A budget is a statement of a corporation's programs in dollar terms. e. strategy control. e. d. budgets. One means of forecasting a firm’s financial future can be accomplished through a. Increase sales by 10% over last year. b. passing rate. performance evaluation budgets programs procedures none of these (p. Pay highest salaries to keep high quality employees.15) 85. e. strategy formulation.15) The process by which strategies and policies are put into action through the development of programs. 85 A return on investment is sometimes referred to as a. b. Develop and sell quality appliances worldwide. Serves as a detailed plan of strategy in action.15) 84. (p. The S in SOP stands for a. planning budgets. b. Divide a sales region into a group of sales districts. b. and procedures is a. e. 81. b. Used in planning and control. Develop and sell quality appliances worldwide. e. pro forma budgets. c. Which of the following is NOT a part of strategy implementation? a.c. e. Used as a means of measuring success based on a certain criteria. Only one budget is necessary for all programs. hurdle rate. program rate. d. formatted financial statements. e. Divide a sales region into a group of sales districts. 82. None of the above 86. return on assets. Details the impact on the firm's future financial situation. d. d. c. d. Which of the following is an example of a program? a. (p. d. simultaneous planning. strategy evaluation. Diversify product line to appeal to more people. c. c. strategy development. Which is NOT true of the budgetary function? (p. (p. Strategy. c. pro forma financial statements. Pay highest salaries to keep high quality employees. c. (p.15) 113 . b. (p.15) 87. d. strategy implementation.15) a.15) 83.
a plan. (p. revenues. d. that organizations find they must make significant yearly changes. c. b. c. perseverance. a standard operating procedure.17) 94. A set of sequential steps or techniques that describe in detail how a particular task or job is to be done is referred to as (p. d.b. return on assets. profits. d. intervention by the organization's bank annual strategic planning conference change in ownership of the organization new CEO awareness by management of decreased profitability (p. e. c. (p. e.16) 93. generating feedback to decision makers. Performance is measured by a. performance. All of the above (p. should review after specific interval of time to make sure it is still applicable. Research done by Henry Mintzberg suggests that strategy formulation a. 88. a systems operating plan. e. As a part of the strategic management process.17) a. b. c. synopsis.16) a. The existence of a performance gap 114 . e. c. d. c. EXCEPT (p. evaluation and control is concerned with all of the following. Systems. b.16) 90. Strength. should be followed unswervingly to ensure success of the plan. is merely a checklist of actions following a logical process. monitoring corporate activities and performance. 91. e. d.16) 92. b. d. e. e. The end result of activities is known as a. is the primary concern of top management. d. a systems operating procedure. Which of the following is NOT one the four triggering events listed in the text that are the stimulus for a strategic change? (p. a standard operating program. c. b. a standard outside procedure.15) a. stimulating a review of the corporation's strategic management. return on investment. preference. pinpointing problem areas. 89. b. Standard Scanning. is typically an irregular and a discontinuous process.
the entrepreneurial mode of strategy formulation a. The mode of strategy formulation used when top management has a reasonably clear idea of the corporation's mission and objectives. it only has the opportunity for reactive behavior. e. b. c. entrepreneurial mode. e. e.18) a. c. Rather than utilizing a proactive search for new opportunities. e. 99. directive consequential none of these continuous rare 96. What characterizes the planning mode of strategy formulation? a. c. rare. directive. d. (p. Which of the following is NOT a characteristic of strategic decisions as mentioned in the text? (p. According to Mintzberg. logical incrementalism. assumes the environment is unresponsive to input. b. b. b. strategic mode.19) Top management believes that the environment is a force to be used and controlled. strategies. is characterized by reactive solutions to existing problems. should cause management to question their objectives. e. Strategic decisions which set precedents for lesser decisions and future actions throughout the organization are referred to as (p. Assumes that systematic scanning and analysis of the environment can provide the knowledge necessary to influence the environment to the corporation's advantage. inexpensive. assumes major responsibilities for strategy formulation. and policies. d. motivational. includes the proactive search for new opportunities and reactive solutions to existing problems. d. b. consequential. d. is only the concern of top management because they set the original strategies. should signal the immediate revamp of the firm's strategic policy.18) 98. is focused on opportunities seen by one person.19) 115 . is not an indicator of problems if it only happens once. Based on vision and large-picture strategy. (p. 100. b. planning mode. adaptive mode. c. Assumes the environment is too complex to be completely comprehended. 97. should cause management to look only within the organization to determine the problem. c. d. c.18) a.a.19) a. d. 95. e. but it chooses to develop a series of tentative or partial strategies instead of developing full-blown strategies is called (p. The strategic decision making process is an eight-step approach to decision-making and is most useful when operating in the (p.
116 .a. e. a la mode. c. b. incremental mode. planning mode. entrepreneurial mode. adaptive mode. d.
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