SM Previous years’ MCQs compilation with

Answers By CA.CMA Suraj Tatiya S

CHAPTER 11: STRTEGIC MANAGEMENT

2019 - Dec [75] Financial objectives involve all of the following, except
(a) growth in revenues.
(b) larger market share.
(c) higher dividends.
(d) greater return on investment. (1 mark)
Answer:
(b) larger market share.
2019 - Dec [84] How often should strategic management activities be performed ?
(a) Annually
(b) Quarterly
(c) Monthly
(d) Continuously (1 mark)
Answer:
(d) Continuously
2020 - Dec [61] Generally in what order managers perform their managerial functions?
(a) Organising, planning, controlling, leading
(b) Organising, leading, planning, controlling
(c) Planning, organising, leading, controlling
(d) Planning, organising, controlling, leading (1 mark)
Answer:
(c) Planning, organising, leading, controlling
2020 - Dec [62] The famous' book “The Management Theory of Jungle” is written by:
(a) Harold Koontz
(b) Henri Fayol
(c) Peter Drucker
(d) George Terry (1 mark)
Answer:
(a) Harold Koontz
2020 - Dec [63] At what level of an organisation does a corporate manager operate?
(a) Functional
(b) Operational
(c) Middle level
(d) Top level (1 mark)
Answer:
(d) Top level
2020 - Dec [64] Consider the following statements:
Planning involves

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(1) Establishment of objectives
(2) Choose of alternative courses of action
(3) Delegation of authority
(4) Decision only by production manager Out of these statements:
(a) (1), (2), (3) and (4) are correct
(b) (1), (3) and (4) are correct
(c) (1) and (2) are correct
(d) (2) and (3) are correct (1 mark)
Answer:
(c) (1) and (2) are correct
2020 - Dec [65] When a manager monitors the work performance of workers in his department to determine if
the quality of their work is ‘up to standard’, this manager is engaging in which function?
(a) Planning
(b) Controlling
(c) Organising
(d) Leading (1 mark)
Answer:
(b) Controlling
2020 - Dec [66] Following are controlling functions of the management?
(1) Analysis of variances
(2) Initiating corrective action
(3) Measurement of Actual performance
(4) Establishment of standards Correct sequence is:
(a) (4), (2), (3), (1)
(b) (2), (3), (1), (4)
(c) (4), (1), (2), (3)
(d) (4). (3). (1). (2) (1 mark)
Answer:
(d) (4), (3), (1), (2)
2020 - Dec [67] ................ is a conscious attempt made by the executive to influence the role, of individual and
group behaviours.
(a) Direction
(b) Motivation
(c) Leadership
(d) Controlling (1 mark)
Answer:
(b) Motivation
2020 - Dec [68] What is the term for the action in which managers at an organisation analyse the current situation
of their organisation and then develop plans to accomplish its mission and achieve its goals?
(a) Synergy planning
(b) Strategy formulation
(c) Functional planning
(d) SWOT analysis (1 mark)
Answer:
(b) Strategy formulation

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 CHAPTER 12: INTRODUCTION TO STRATEGIC

2019 - Dec [91] Which of the following is a force in the Porter's five forces model of industry attractiveness?
(a) Bargaining power of suppliers
(b) Competitive market
(c) Low cost for customers
(d) Opportunity for substitutes (1 mark)
Answer:
(a) Bargaining power of suppliers
2020 - Dec [69] Match the following Porter’s five forces factors :

(a) Brand reputation and Government regulation (D Buyer power

(b) Materials scarcity and Threat of integrating (2) Rivalry among existing
forward competitions

(c) Price sensitivity and Threat of backward (3) Threat of new entry
integration

(d) Customer loyalty and Threat of horizontal (4) Supplier power

Integration

The correct order is :

(A) (a)-(2), (b)-(3), (c)-(1), (d)-(4)
(B) (a)-(3), (b)-(1), (c)-(4), (d)-(2)
(C) (a)-(3), (b)-(4), (c)-(1), (d)-(2)
(D) (a)-(2), (b)-(4), (c)-(1), (d)-(3) (1 mark)
Answer:
(c) (a)-(3), (b)-(4), (c)-(1), (d)-(2)
2020 - Dec [70] In the business, Macro environment factor, what does PEST stand for?
(a) Political, environmental, strategic, testing
(b) Political, environmental, strategic, technological
(c) Political, economic, strategic, technological
(d) Political, economic, social, technological (1 mark)
Answer:
(d) Political, economic, social, technological
2020 - Dec [71] Profitability stemming from how well a firm positions itself in the market is a key feature of which
writer’s view on strategy?
(a) Peter Drucker
(b) Jay Barney
(c) Michael Porter
(d) Henry Mintzberg (1 mark)
Answer:
(c) Michael Porter
2020 - Dec [72] Porter’s Value Chain is essentially a tool for:
(a) Calculating what a firm is worth

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(b) Advising firms on how to price their products
(c) Identifying the competitive forces within an industry
(d) Diagnosing and enhancing sources of competitive advantage within an organisation (1 mark)
Answer:
(d) Diagnosing and enhancing sources of competitive advantage within an organisation

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 CHAPTER 13: BUSINESS POLICY AND FORMULATION OF
FUNCTIONAL STRATEGY
2019 - Dec [65] Outsourcing is the:
(a) Spinning off of a value-creating activity to create a new firm
(b) Selling of a value-creating activity to other firms
(c) Purchase of a value-creating activity from an external supplier
(d) Use of computers to obtain value-creating data from the Internet
(1 mark)
Answer:
(c) Purchase of a value-creating activity from an external supplier.
2019 - Dec [76] Which of these basic questions should a vision statement answer?
(a) What is our business?
(b) Who are our competitors?
(c) Where we are to go?
(d) Why do we exist? (1 mark)
Answer:
(c) Where we are to go?
2019 - Dec [81] A corporate strategy can be defined as:
(a) A list of actions about operational planning and statement of organisation structure and control system
(b) A statement of how to compete, direction of growth and method of assessing environment
(c) Abatement of organisation's activities and allocation of resources
(d) A course of action or choice of alternatives, specifying the resources required to achieve certain stated
objectives (1 mark)
Answer:
(d) A course of action or choice of alternatives, specifying the resources required to achieve certain stated
objectives.
2019 - Dec [82] A Strategic Business Unit (SBU) is defined as a division of an organisation:
(a) that help in the marketing operations.
(b) that enable managers to have better control over the resources.
(c) that help in the choice of technology.
(d) that help in the allocation of scarce resources. (1 mark)
Answer:
(b) that enable managers to have better control over the resources.
2019 - Dec [90] Which of the following answers to the question:
‘Where does the organisation aspire to be in the future?’
(a) Mission Statement
(b) Vision Statement
(c) Objectives
(d) Core Values (1 mark)
Answer:
(b) Vision Statement
2019 - Dec [98] Successful differentiation strategy allows the company to:
(a) gain buyer loyalty to its brands
(b) charge too high a price premium
(c) depend only on intrinsic product attributes

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(d) have product quality that exceeds buyers’ needs (1 mark)
Answer:
(a) gain buyer loyalty to its brands
2019 - Dec [99] What are enduring statements of purpose that distinguish one business from other similar firms?
(a) Policies
(b) Mission statements
(c) Objectives
(d) Rules (1 mark)
Answer:
(b) Mission statements
2020 - Dec [74] The answers the question “Where do we aim to be” ₹
Whereas ................. answers the questions “What we do ₹What makes us different ?”
(a) vision statement; mission statement
(b) short-term objectives; long-term objectives
(c) objectives; strategies
(d) mission; vision (1 mark)
Answer:
(a) vision statement; mission statement
2020 - Dec [75] Large organizations create ............................................. which assume the role of a separate
company and create their own strategies and plans in order to achieve their corporate goals and contribution to
the overall organization.
(a) marketing objectives
(b) strategic business units
(c) marketing activities
(d) business development units (1 mark)
Answer:
(b) strategic business units
2020 - Dec [76] Guidelines developed by an organization to govern the actions of those who are a part of it, is
known as :
(a) Business Policy
(b) Marketing strategy
(c) Formulation strategy
(d) Values (1 mark)
Answer:
(a) Business Policy

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 CHAPTER 14: STRATEGIC ANALYSIS AND PLANNING
2019 - Dec [61] Blue Ocean Strategy is concerned with:
(a) Moving into new markets with new products
(b) Creating new market places where there is no competition
(c) Development of products and markets in order to ensure survival
(d) Making the product unique in terms of attributes (1 mark)
Answer:
(b) Creating new market places where there is no competition.
2019 - Dec [62] The product-market matrix comprising strategies of penetration, market development, product
development and diversification was first formulated by:
(a) An soft
(b) Drucker
(c) Porter
(d) Prahlad (1 mark)
Answer:
(a) Ansoff
2019 - Dec [63] Which of the following market structures would be commonly identified with FMCG products?
(a) Monopoly
(b) Monopolistic competition
(c) Oligopoly
(d) Perfect competition (1 mark)
Answer:
(b) Monopolistic competition
2019 - Dec [64] Directional Policy Matrix is same as:
(a) the BCG Model
(b) the 9-cell GE Matrix
(c) the Life-cycle Portfolio analysis
(d) the 3 x 3 competitive positioning matrix (1 mark)
Answer:
2019 - Dec [66] The existence of price-wars in the airline industry in India indicates that:
(a) Customers are relatively weak because of the high switching costs created by frequent flyer programs
(b) The industry is moving towards differentiation of services
(c) The competitive rivalry in the industry is severe
(d) The economic segment of the external environment has shifted, but the airline strategies have not changed
(1 mark)
Answer:
(c) The competitive rivalry in the industry is severe.
2019 - Dec [68] Which section of the SWOT Matrix involves matching internal strengths with external
opportunities?
(a) The WT cell
(b) The SW cell
(c) The SO cell
(d) The ST cell (1 mark)
Answer:
(c) The SO cell

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2019 - Dec [70] The emphasis on product design is very high, the intensity of competition is low, and the market
growth rate is low in the
stage of the industry life-cycle.
(a) Maturity
(b) Introduction
(c) Growth
(d) Decline (1 mark)
Answer:
(b) Introduction
2019 - Dec [71] The most probable time to pursue a harvest strategy is in a situatiqn of
(a) High growth
(b) Decline in the market life-cycle
(c) Strong competitive advantage
(d) Mergers and acquisitions (1 mark)
Answer:
(b) Decline in the market life-cycle
2019 - Dec [72] Vertical integration may be beneficial when:
(a) Lower transaction costs and improved co-ordination are vital and achievable
(b) Flexibility is reduced, providing a more stationary position in the competitive environment
(c) Various segregated specialisations will be combined
(d) The minimum efficient scales of two corporations are different
(1 mark)
Answer:
(a) Lower transaction costs and improved co-ordination are vital and achievable.
2019 - Dec [73] Conglomerate diversification is another name for which of the following?
(a) Related diversification
(b) Unrelated diversification
(c) Portfolio diversification
(d) Acquisition diversification (1 mark)
Answer:
(b) Unrelated diversification.
2019 - Dec [74] When two organizations combine to increase their strengths and financial gains, it is called:
(a) Hostile takeover
(b) Liquidation
(c) Merger
(d) Acquisition (1 mark)
Answer:
(c) Merger
2019 - Dec [77] A firm successfully implementing a differentiation strategy would expect
(a) Customers to be sensitive to price increases
(b) To charge premium prices
(c) Customers to perceive the product as standard
(d) To automatically have high levels of power over suppliers (1 mark)
Answer:
(b) To charge premium prices

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2019 - Dec [78] The concept of ‘Core competence’ has been advocated by:
(a) Gary Hamel and Peter Drucker
(b) C.K. Prahlad and Gary Hamel
(c) C.K. Prahlad and Michael Porter
(d) C.K. Prahlad and Peter Drucker (1 mark)
Answer:
(b) C.K. Prahlad and Gary Hamel.
2019 - Dec [79] Which of the following can be said to be the strategy followed in TOWS approach ?
(a) Defensive Strategy
(b) Offensive Strategy
(c) Attack Strategy
(d) Functional Strategy (1 mark)
Answer:
(a) Defensive Strategy
2019 - Dec [80] Porter's Generic strategies include:
(a) Cost Differentiation, Product Focus, Leadership
(b) Price Leadership, Cost Focus, Product Differentiation
(c) Price Differentiation, Leadership, Cost Focus
(d) Cost Leadership, Differentiation and Focus (1 mark)
Answer:
(d) Cost Leadership, Differentiation and Focus.
2019 - Dec [86] Which "S“ is not part of McKinseys 7-S Framework?
(a) Shared value
(b) System
(c) Staff
(d) Synergy (1 mark)
Answer:
(d) Synergy
2019 - Dec [87] Under the BCG growth-share matrix, low share, high-growth businesses or products are called:
(a) Stars
(b) Cash cows
(c) Question marks
(d) Dogs (1 mark)
Answer:
(c) Question marks.
2019 - Dec [88] Ansoff’s matrix is useful for:
(a) joining a business's marketing strategy with general strategic direction
(b) establishing an editorial calendar for staff to follow
(c) understanding buyer personas and buyer behaviours
(d) hiring new staff and training them on marketing tactics (1 mark)
Answer:
(a) joining a business's marketing strategy with general strategic direction
2019 - Dec [93] What does Cash Cow symbolize in BCG matrix?
(a) Volatility
(b) Unattractive Investment

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(c) Profitability
(d) Cash Drain (1 mark)
Answer:
(c) Profitability
2019 - Dec [94] What are focus strategies?
(a) When a company focuses on supplying differential products which appeal to different market segments
(b) Where a company chooses to concentrate on only one market segment or a limited range of segments
(c) Where a company focuses on achieving lower costs than its rivals so as to compete across a broad range of
market segments
(d) When a company conducts market research through focus groups to determine how their strategy should be
shaped (1 mark)
Answer:
(b) Where a company chooses to concentrate on only one market segment or a limited range of segments.
2019 - Dec [95] The BCG matrix is based on:
(a) Industry attractiveness and business strength
(b) Industry growth rate and business strength
(c) Industry attractiveness and relative market share
(d) Industry growth and market share (1 mark)
Answer:
(d) Industry growth and market share.
2019 - Dec [97] Which is the term used in Ansoff’s matrix for increasing market share with existing products in
existing markets?
(a) Market Development
(b) Market Penetration
(c) Product Development
(d) Diversification (1 mark)
Answer:
(b) Market Penetration
2019 - Dec [100] Typically profits are highest in which stage of industry life-cycle?
(a) Introduction
(b) Growth
(c) Maturity
(d) Decline (1 mark)
Answer:
(b) Growth
2020 - Dec [80] Statement (I): Stars operate in low growth industries and maintain high market share.
Statement (II): “Dogs” have weak market share in high-growth market. Codes:
(a) Statement (I) is correct but (II) is incorrect
(b) Statement (II) is correct but (I) is incorrect
(c) Both the statements (I) and (II) are correct
(d) Both the statements (I) and (II) are incorrect (1 mark)
Answer:
(d) Both the statements (I) and (II) are incorrect
2020 - Dec [81] Which of the following is the Strategy of TOWS ?
(a) Competitive Strategy
(b) Corporate Strategy

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(c) Business Strategy
(d) Functional Strategy (1 mark)
Answer:
(a) Competitive Strategy
2020 - Dec [82] The two internal elements of SWOT analysis are :
(a) Weaknesses and threats
(b) Opportunities and threats
(c) Strengths and weaknesses
(d) Strengths and threats (1 mark)
Answer:
(c) Strengths and weaknesses
2020 - Dec [83] In SWOT analysis, situations in which Firms could convert weaknesses into strengths and threats
into opportunities, known as :
(a) Conversion strategics
(b) Strategic leverage
(c) Strategic policy
(d) Vulnerability (1 mark)
Answer:
(a) Conversion strategics
2020 - Dec [84] Which can be termed as disadvantage of PERT ?
(a) Compels managers to plan their projects critically in considerable detail from beginning to the end and analyse
all factors affecting the progress of the plan
(b) Provides management a tool for forecasting the impact of schedule changes. The likely probable spots are
located early enough to take preventive measures or corrective actions.
(c) A considerable amount of data may be presented in a precise manner.
(d) The costs may be higher than the conventional methods of planning and as it needs a high degree of planning
skill and minute details resulting in rise in time and manpower resources. (1 mark)
Answer:
(d) The costs may be higher than the conventional methods of planning and as it needs a high degree of planning
skill and minute details resulting in rise in time and manpower resources.
2020 - Dec [85] What is the term used in Ansoff's matrix for increasing market share with existing products in
new markets?
(a) Market development
(b) Market penetration
(c) Product development
(d) Diversification (1 mark)
Answer:
(a) Market development
2020 - Dec [86] Porter's generic strategies are :
(a) Low price, differentiation, focus
(b) Cost leadership, differentiation, cost focus, differentiation focus
(c) Price leadership, differentiation, focus
(d) Low cost, differentiation, focus differentiation (1 mark)
Answer:
(b) Cost leadership, differentiation, cost focus, differentiation focus

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 CHAPTER 15: STRATEGIC IMPLEMENTATION AND CONTROL
2019 - Dec [67] What type of organisational structure do most small businesses follow?
(a) Divisional Structure
(b) Functional Structure
(c) Hour Glass Structure
(d) Matrix Structure (1 mark)
Answer:
(d) Matrix Structure.
2019 - Dec [69] What can be defined as the art and science of formulating, implementing and evaluating cross-
functional decisions that enable an organisation to achieve its objectives?
(a) Strategy Formulation
(b) Strategy Evaluation
(c) Strategy Implementation
(d) Strategic Management (1 mark)
Answer:
(d) Strategic Management
2019 - Dec [96] Which of these are characteristics of matrix structure?
(a) Decentralisation and co-ordination
(b) Centralisation and control
(c) Centralisation and co-ordination
(d) Decentralisation and control (1 mark)
Answer:
(a) Decentralisation and co-ordination.
2020 - Dec [87] A sudden increase in critical resources which may invite an immediate reassessment of the
organization strategy is an example of:
(a) Strategic Leap Control
(b) Implementation Control
(c) Strategic Surveillance
(d) Special Alert Control (1 mark)
Answer:
(d) Special Alert Control
2020 - Dec [88] Strategic changes that most of the companies pursue are the following except:
(a) Re-engineering
(b) Restructuring
(c) Innovation
(d) Liquidation . (1 mark)
Answer:
(d) Liquidation
2020 - Dec [89] If misinformation and lack of information create barriers in managing change, it can be managed
by :
(a) Participation
(b) Education and Communication
(c) Leadership
(d) Obtaining commitment (1 mark)

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Answer:
(b) Education and Communication
2020 - Dec [90] Important benefits of McKinsey's 7-S framework Model is/are as follows:
(a) It is a diagnostic tool for understanding the organization which are non-effective
(b) It helps to guide organization change
(c) It combines rational and hard elements with emotional and soft elements
(d) All of the above (1 mark)
Answer:
(d) All of the above
2020 - Dec [91] Restructuring and downsizing becomes necessary due to the following factors except:
(a) Unforeseen changes in business environment
(b) New technological development
(c) Increase in demand
(d) Excess production capacity (1 mark)
Answer:
(c) Increase in demand
2020 - Dec [92] In.........structure, the activities are grouped according to the types of products manufactured or
different market territories as the organizations began to grow by expanding variety of functions performed.
(a) Divisional Structure
(b) Functional Structure
(c) Horizontal Structure
(d) Vertical Structure (1 mark)
Answer:
(a) Divisional Structure
2020 - Dec [93] What is the term for the monitoring of events both internal and external to the organisation that
affects strategy ?
(a) Operational control
(b) Strategic control
(c) Strategic surveillance
(d) Environmental scanning (1 mark)
Answer:
(c) Strategic surveillance

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 CHAPTER 16: ANALYSING STRATEGIC EDGE
2019 - Dec [83] Total Quality Management was initially applied in:
(a) South Korea
(b) Japan
(c) United Kingdom
(d) United State of America (1 mark)
Answer:
(b) Japan
2019 - Dec [85] What is six-sigma risk/ return level ?
(a) High-Low
(b) Medium-High
(c) Low-Low
(d) High-High (1 mark)
Answer:
(b) Medium-High
2019 - Dec [89] Which category of benchmarking involves multi-site comparison of process and performance ?
(a) Internal
(b) Generic
(c) Competitive
(d) (a) and (b) both (1 mark)
Answer:
(d) Internal benchmarking is used to compare the work of such teams, units or divisions to identify the ones that
are best performing and share the knowledge throughout the company to other teams to achieve higher
performance.
General benchmarking refers to comparisons which “focus on excellent work processes rather than on the
business practices of a particular organization.
Here in this question, it is no where mentioned that multi-site comparison of similar processes or unrelated
processes. Hence, both options A and B may be correct.
2019 - Dec [92] The principles of the business process re-engineering (BPR) approach do not include :
(a) Rethinking business processes cross-functionally to organise work around natural information flows.
(b) Striving for improvements in performance by radical rethinking and redesigning the process.
(c) Checking that all internal customers act as their own suppliers to identify problems
(d) Scrapping any process line over two years old and starting again from scratch (1 mark)
Answer:
(d) Scrapping any process line over two years old and starting again from scratch.
2020 - Dec [94] Improving quality through small, incremental improvements is a characteristic of what type of
quality management system ?
(a) Just-in-time
(b) Six Sigma
(c) Total Quality Management
(d) Kaizen (1 mark)
Answer:
(d) Kaizen
2020 - Dec [95] Where was Total Quality Management first developed ?
(a) USA

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(b) UK
(c) Japan
(d) Korea (1 mark)
Answer:
(c) Japan
2020 - Dec [96] Which of the following are key components of a Total Quality Management system ₹-
(a) Individual responsibility, incremental improvement, use of raw data
(b) Collective responsibility, continual improvement, use of raw data
(c) Group responsibility, staged improvement, knowledge
(d) Involves everyone, continual improvement, use of data and knowledge
(1 mark)
Answer:
(d) Involves everyone, continual improvement, use of data and knowledge
2020 - Dec [97] Match the following benchmarking events with historical development:

Benchmarking History Years

(a) Reverse Engineering (1) 1982-1986

(b) Process benchmarking (2) 1976-1986

(c) Strategic benchmarking (3) 1950-1975

(d) Competitive benchmarking (4) 1988+

The correct order is:

(a) (a)-(1), (b)-(3), (c)-(2), (d)-(4)
(b) (a)-(3), (b)-(1), (c)-(4), (d)-(2)
(c) (a)-(3), (b)-(1), (c)-(2), (d)-(4)
(d) (a)-(3), (b)-(2), (c)-(1),(d)-(4) (1 mark)
Answer:
(b) (a)-(3), (b)-(1), (c)-(4), (d)-(2)
2020 - Dec [98] In Six sigma, DMAIC stands for:
(a) Do-Measure-Act-Implement-Check
(b) Define-Measure-Act-Implement-Control
(c) Define-Measure-Analyze-Improve-Control
(d) Do-Measure-'Analyze-Improve-Control (1 mark)
Answer:
(c) Define-Measure-Analyze-Improve-Control
2020 - Dec [99] In TQM, which of the following is not classified as 'costs of non-conformance'?
(a) Testing equipment
(b) Reworking
(c) Warranty claims
(d) Product design (1 mark)
Answer:
(a) Testing equipment
2020 - Dec [100] “Six Sigma" management has several levels of certification. It does not include:
(a) Yellow Belt

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(b) Green Belt
(c) Champion
(d) White Belt (1 mark)
Answer:
(d) White Belt

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