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Multiple Choice chapter 1 Introduction 94.

__________ percent of Americans think the Internet will change society more than the telephone and television combined. a. 91 b. 74 c. 37 d. 56 e. 100 Ans: b Page: 4 95. The nature and core of buying and selling in nearly all industries has been changed by a. the Internet. b. political borders. c. corporate greed. d. customer and employee focus. e. the government. Ans: a Page: 4 What Is Strategic Management? 96. What can be defined as the art and science of formulating, implementing and evaluating cross-functional decisions that enable an organization to achieve its objectives? a. Strategy formulation b. Strategy evaluation c. Strategy implementation d. Strategic management Ans: d Page: 5 97. ____________ is used to refer to strategic formulation, implementation and evaluation, with ______________ referring only to strategic formulation. a. Strategic planning; strategic management b. Strategic planning; strategic processing c. Strategic management; strategic planning d. Strategic management; strategic processing e. Strategic implementation; strategic focus Ans: c Page: 5 98. Conducting research to determine internal strengths and weaknesses is performed during which stage of strategic management? a. Formulation b. Implementation c. Evaluation d. Feedback Ans: a Page: 5 99. Strategy formulation includes all of the following activities except a. establishing a company mission. b. establishing long-term objectives. c. analyzing alternative strategies d. measuring organizational performance. e. performing an external audit. Ans: d Page: 5

100. What are the three stages of the strategic management process? a. Conflict, resolution and implementation b. Formulation, implementation and evaluation c. Formulation, execution and reward d. Formulation, implementation and resolution Ans: b Page: 5 101. An important activity in __________ is taking corrective action. a. strategy evaluation b. strategy implementation c. strategy formulation d. all of the above Ans: a Page: 6 102. __________ means mobilizing employees and managers to put strategies into action. a. Formulating strategy b. Strategy evaluation c. Implementing strategy d. Strategic advantage Ans: c Page: 6 103. __________ skills are especially critical for successful strategy implementation. a. Interpersonal b. Technical c. Conceptual d. Thinking Ans: a Page: 6 104. The activity that comes first in strategy evaluation is a. measuring organizational performance b. reviewing internal and external factors c. establishing annual objectives d. establishing long-term objectives e. preparing a revised mission statement Ans: b Page: 6 105. Which of the following is called the action phase of the strategic management process? a. Strategy formulation b. Strategy implementation c. Strategy evaluation d. Allocating resources e. Measuring performance Ans: b Page: 6

106. __________ is not a strategy-implementation activity. a. Taking corrective actions b. Establishing annual objectives c. Devising policies d. Allocating resources Ans: a Page: 6 107. What does strategy implementation involve? a. Establishing annual objectives

b. Devising policies c. Allocating resources d. All of the above e. b and c only Ans: d Page: 6 108. Strategy evaluation is necessary because a. internal and external factors are constantly changing. b. the SEC requires strategy evaluation. c. competitors change their strategies. d. the IRS requires strategy evaluation. Ans: a Page: 6 109. Strategic management is a. a pure science. b. based mainly on intuition. c. needed mainly when organizational performance falls. d. based on the use of quantitative and qualitative information. Ans: d Page: 7 110. Which statement best describes intuition? a. It represents the marginal factor in decision making. b. It represents a minor factor in decision making integrated with analysis. c. It should be coupled with analysis in decision making. d. It is better than analysis in decision making. Ans: c Page: 7

111. The strategic-management process a. is a system of independent actions. b. follows a strict sequence of activities. c. requires long periods of time to be effective. d. is a system of interrelated functions. Ans: d Page: 7 112. _________ and _________ are external changes transforming business and society today. a. E-commerce; strategy b. E-commerce; globalization c. Strategy; globalization d. Corporate culture; stakeholders Ans: b Page: 8 Key Terms in Strategic Management 113. The _____________ is any manager who has responsibility for a unit or division, responsibility for profit and loss outcome, or direct authority over a major piece of the business. a. business unit holder b. external consultant c. strategist d. financial planner Ans: c Page: 8 114. __________ are individuals in an organization most responsible for the success and failure of that organization.

a. Strategists b. Financial planners c. Personnel directors d. Stakeholders Ans: a Page: 8 115. Most strategists agree the first social responsibility of any business must be to a. make enough profit to cover the costs of the future. b. protect the environment. c. provide a safe working environment for employees. d. provide inexpensive products/services to create the volume necessary for turnover. Ans: a Page: 9 116. Opponents of social responsiveness, such as Milton Friedman, argue that the highest responsibility of an enterprise is its __________ responsibility. a. moral b. political c. legal d. technological e. ethical Ans: c Page: 9 117. Which of these is often considered the first step in strategic planning? a. Developing a vision statement b. Establishing goals and objectives c. Making a profit d. Developing a mission statement Ans: a Page: 9 118. What are enduring statements of purpose that distinguish one business from other similar firms? a. Policies b. Mission statements c. Objectives d. Rules Ans: b Page: 10 119. ___________ would not be part of the external environment of Chrysler. a. United Auto Workers b. The Federal Government c. Ford Motor Company d. Customers e. All of the above are part of Chryslers external environment. Ans: e Page: 10 120. Environmental scanning a. emphasizes internal factors over external information. b. examines key external factors. c. should be used by large companies, but is not necessary in small businesses d. All of the above are true of environmental scanning. Ans: b Page: 10

121. One of the many reasons a mission statement is useful is by a. answering the question What is our business?

b. describing the values of the firm. c. charting the direction of the firm. d. All of the above e. None of the above Ans: d Page: 10 122. __________ could be considered an external opportunity. a. An excellent research and development department b. Excellent advertising effectiveness c. A population shift to the Sun Belt d. Top management having many years of experience e. Effective marketing segmentation Ans: c Page: 10 123. Usually external opportunities and threats are a. uncontrollable by a single organization b. controlled by governments c. not as important as internal strengths and weaknesses d. key functions in strategy implementation Ans: a Page: 10 124. Which of these can be defined as specific results an organization seeks to achieve in pursuing its basic mission? a. Strategies b. Rules c. Objectives d. Policies Ans: c Page: 11 125. Long-term objectives should be a. measurable. b. continually changing. c. reasonable. d. challenging. e. only a, c & d Ans: e Page: 11

126. Internal __________ are activities in an organization that are performed especially well. a. opportunities b. competencies c. strengths d. management d. factors Ans: c Page: 11 127. The means by which long-term objectives will be achieved are called a. strategies. b. strengths. c. weaknesses. d. policies. e. opportunities. Ans: a Page: 11

128. __________ can best be described as short-term in nature. a. Mission statements b. Tenure c. Annual objectives e. Strategies Ans: c Page: 12 129. When (where) should annual objectives be established? a. In January every year b. At the corporate, divisional and functional levels c. At the corporate level d. At the divisional and functional levels Ans: b Page: 12 130. Annual objectives are especially important in strategy __________, whereas long-term objectives are particularly important in strategy __________. a. formulation; implementation b. implementation; evaluation c. evaluation; implementation d. implementation; formulation Ans: d Page: 12-13

131. What are guides to decision making? a. Laws b. Rules c. Policies d. Procedures e. Goals Ans: c Page: 13 The Strategic-Management Model 132. Which of the following is not included in the strategic management model? a. Measure and evaluate performance b. Perform internal research to identify customers c. Establish long-term objectives d. Implement strategies Ans: b Page: 14 133. The strategic-management process a. occurs once a year. b. is a sequential process. c. is a continuous process. d. applies mostly to companies with sales greater than $100 million. Ans: c Page: 14 134. The strategic-management model can be used effectively by a. profit, nonprofit and government organizations. b. only for-profit organizations. c. only very large organizations. d. only small organizations. Ans: a Page: 14

Benefits of Strategic Management 135. Strategic management enables an organization to __________, instead of companies just responding to threats in their business environment. a. be proactive b. determine when the threat will subside c. avoid the threats d. defeat their competitors Ans: a Page: 15 136. What is the act of strengthening employees sense of effectiveness by encouraging and rewarding them to participate in decision making and exercise initiative and imagination? a. Authoritarianism b. Proaction c. Empowerment d. Transformation Ans: c Page: 15 137. How do line managers become owners of the strategy? a. By attending top manager meetings. b. By gathering information about competitors. c. By involvement in the strategic-management process. d. By becoming a shareholder of the firm. Ans: c Page: 15 138. According to research, organizations using strategic management are __________ than those that do not. a. more profitable b. more complex c. less profitable d. less successful Ans: a Page: 16 139. To what do strategists of low-performing organizations often attribute their firms weak performance? a. Poor economy b. Technological change c. Foreign competition d. Paperwork deadlines e. All of the above Ans: e Page: 16 140. ___________ businesses in the United States fail annually, according to Dun & Bradstreet. a. Fewer than 10,000 b. Approximately 50 percent c. More than 100,000 d. Between 20,000 to 30,000 Ans: c Page: 16 141. According to Greenley, strategic management offers all of these benefits except that a. it provides an objective view of management problems. b. it creates a framework for internal communication among personnel. c. it encourages a favorable attitude toward change. d. it maximizes the effects of adverse conditions and changes. e. it gives a degree of discipline and formality to the management of a business. Ans: d Page: 16-17

Why Some Firms Do No Strategic Planning 142. __________ is not a reason for poor or no strategic planning in organizations. a. Wasting of time b. Being content with success c. Fire-fighting d. Poor reward structure e. Inexpensiveness Ans: e Page: 17 Pitfalls in Doing Strategic Planning 143. All of these are pitfalls an organization should avoid in strategic planning except when a. using plans as a standard for measuring performance. b. using strategic planning to gain control over decisions and resources. c. failing to involve key employees in all phases of planning. d. too hastily moving from mission development to strategy formulation. Ans: a Page: 18 144. __________ is not a pitfall an organization should avoid in strategic planning. a. Failing to communicate the plan to employees b. Involving all managers rather than delegating planning to a planner c. Top managers not actively supporting the strategic planning process d. Doing strategic planning only to satisfy accreditation or regulatory requirements Ans: b Page: 18

145. Which of the following statements is false? a. Open-mindedness is an important guideline for effective strategic management. b. Strategic management must become a self-perpetuating socialist mechanism. c. No organization has unlimited resources. d. Strategic decisions require trade-offs. Ans: b Page: 19 146. Principles of conduct that guide decision making are known as a. human rights. b. the Constitution. c. business ethics. d. nonprofit organization policies. Ans: c Page: 20 Business Ethics and Strategic Management 147. A(n) ____________ can provide a basis on which policies can be devised to guide daily decisions and behavior at the work site. a. list of guidelines b. policy for safety c. vision statement d. code of business ethics e. annual objective Ans: d Page: 20 148. The ____________ focuses on business ethics issues related to the Internet. a. E-Commerce Perspective

b. mission statement c. vision statement d. B2B commerce e. B2C Internet commerce Ans: a Page: 21 149. Because they must take the __________ of the firm, strategists salaries are high compared to those of other individuals in the organization. a. moral risks b. social risks c. environmental risks d. societal criticism Ans: a Page: 23 150. ___________ can be created by ethics training and an ethics culture. a. Competitive responsibility b. Competitive advantage c. Strategic advantage d. Employee cooperation Ans: c Page: 23 151. Which of these business actions is(are) always considered to be unethical? a. Poor product or service safety b. Using nonunion labor in a union shop c. Dumping flawed products in a foreign market d. Insider trading e. All of the above Ans: e Page: 24 152. Ethical standards come out of __________ in a final analysis. a. government b. competitors c. history and heritage d. stakeholder analysis Ans: c Page: 24 Comparing Business and Military Strategy 153. A strong __________ heritage underlies the study of strategic management. a. military b. government c. political d. social e. cultural Ans: a Page: 24 154. Military strategy is based on an assumption of __________, whereas business strategy is based on an assumption of __________. a. conflict; cooperation b. conflict; competition c. cooperation; conflict d. competition; conflict e. cooperation; competition Ans: b Page: 24

The Nature of Global Competition 155. ____________ are organizations that conduct business operations across national borders. a. Domestic firms b. Multinational corporations c. Parent companies d. Government-backed companies Ans: b Page: 25 156. A __________ refers to a firm investing in international operations, while the _________ is the country where that business is conducted. a. parent company; host country b. home country; parent company c. parent country; host company d. host company; home country Ans: a Page: 25 157. __________ is perhaps the greatest advantage of international operations. a. Reduced tariffs and taxes b. Spreading economic risks over a wider number of markets c. Access to global technology, culture and business practices d. Gaining new customers e. Less-intense competition Ans: d Page: 27 158. All of these are potential disadvantages of an international operation except a. overestimated weaknesses and underestimated strengths of competitors. b. differing languages, cultures and value systems. c. reduced tariffs and taxes. d. complexity due to a multiple monetary system. e. all of these are potential disadvantages.