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    • Chapter 1 Quiz 1. The term _________ is used to refer to strategy formulation, implementation, and evaluation, with _________referring only to strategy formulation. strategic planning; strategic management assessment; planning strategic management; strategic planning management cycle; brainstorming Correct Answer:strategic management; strategic planning 2. Which of these requires a firm to establish annual objectives, devise policies, and allocate resources? Strategy formulation Strategy implementation Strategy manipulation Strategy evaluation 3.The rationale for periodically conducting strategic-management meetings away from the work site is to encourage more _____________ and ____________ among participants. feedback; rigidity creativity; candor confidence; self-interest strategy evaluation; candor 4.Anything that a firm does especially well compared to rival firms is referred to as: competitive advantage. comparative advantage. an external opportunity. opportunity cost. 5.Both military and business organizations do all of the following except: use of the element of surprise. Aim "to gain competitive advantage." use the assumption of conflict to develop strategies. use their own strengths to exploit competitors weaknesses. 6.__________ are the individuals who are most responsible for the success or failure of an organization. Ethics officers Operatives Consultants Strategists 7.A disadvantage of international operations is: foreign operations can allow firms to establish low-cost production
    • facilities in locations close to raw materials and/or cheap labor. economies of scale can be achieved from operation in global rather thansolely domestic markets. competitors in foreign markets may not exist. Language, culture, and value systems differ among countries, causingcommunication barriers and problems managing people. 8.The problem of limited resources within a firm makes ______________ particularly important as the firm decides how to allocate its resources. strategy formulation strategy implementation long-range planning short-range planning 9.All of these are pitfalls an organization should avoid in strategic planning except: using strategic planning to gain control over decisions and resources. failing to involve key employees in all phases of planning. hastily moving from mission development to strategy formulation. using plans as a standard for measuring performance. 10.The process of conducting research and gathering and assimilating external information is called: lobbying. industry analysis. long-range planning. mission development. 11.The term strategic planning refers only to strategy formulation. True False 12.The action stage of strategic management is called strategy formulation. True False 13.Three fundamental strategy evaluation activities are reviewing external and internal factors, measuring performance, and taking corrective actions. True False 14.Strategies can be defined as specific results that an organization seeks to achieve in pursuing its basic mission. True False 15.Reasons for poor or no strategic planning on part of firms include overconfidence, too expensive, suspicion, and laziness. True False 16.In a multidivisional firm, objectives should be established for the overall company and not for each division.
    • True False 17.An organization can pursue any and/or all strategies that potentially could benefit the firm. True False 18.Communication is an act of strengthening employees sense of effectiveness by encouraging them to participate in decision making and to exercise initiative and imagination, and rewarding them for doing so. True False 19.Given that formality creates flexibility and creativity, managers must be very formal in strategic planning. True False 20.One pitfall to avoid in strategic planning is top management making many intuitive decisions that conflict with formal planning. True False Identify and describe the three stages of the strategic-management process. Givereasons within your answer to describe why each of these stages is important in strategicmanagement.Answers1.Correct Answer: strategic management; strategic planning2.Correct Answer: Strategy implementation .3.Correct Answer: creativity; candor4. Correct.: competitive advantage.5.Correct Answer: use the assumption of conflict to develop strategies.6.Correct Answer: Strategists
    • .7.Correct Answer: language, culture, and value systems differ among countries, causingcommunication barriers and problems managing people.8.Your Answer: strategy formulation Correct.9.Correct Answer: using plans as a standard for measuring performance. .10.Correct Answer: industry analysis.11.True Correct.12.Correct Answer:False Incorrect. Strategy implementation is called the action stage.13.True Correct.14.Correct Answer:False15.Incorrect. Strategies are the means by which long-term objectives will be achieved.Correct Answer:True16.Incorrect. Some firms do not engage in strategic planning due to overconfidence, tooexpensive, suspicion, and laziness.False Correct.17.Correct Answer:False Incorrect. No organization can pursue all the strategies that potentially could benefit thefirm.
    • 18.Correct Answer:False Incorrect. Empowerment is the act of strengthening employees sense of effectiveness byencouraging and rewarding them to participate in decision making and exercise initiative andimagination.19.Correct Answer:False Incorrect. Managers that are very formal in strategic planning can stifle flexibility andcreativity.20.True Correct.21. Identify and describe the three stages of the strategic-management process.Give reasons within your answer to describe why each of these stages is important in strategicmanagement.Your Answer:(blank)22. What is sustained competitive advantage? Define this concept and explain how afirm can achieve it. Why is it important in strategic management?Your Answer:(blank)23. How do external opportunities and threats differ in their strategic implicationsfrom those of internal strengths and weaknesses? Be sure to include in your answer a briefdescription of each of these four terms.Your Answer:(blank)24. What is the strategic-management model? What does it represent? Describeseveral characteristics of the strategic-management process based on what you understandabout the strategic-management model.Your Answer:(blank)25. Describe the concept of empowerment. How is empowerment related to thedecentralization of the strategic-management process?Your Answer:(blank)
    • Chapter 2 The operating ______ of organizations should be to identify customersÕ needs and then provide a product or service to fulfill those needs. philosophy culture self-concept concern for public image Carefully prepared _____________ and ____________ are widely recognized by both practitioners and academicians as the first step in strategic management. long-term objectives; goals creeds; long-term objectives vision statements; mission statements short-term objectives; long-term objectives The vision and mission statement can often be found: on supplier invoices. in a competitive market analysis. on the front of annual reports. in the SEC report. It is important to involve ______________ in the process of developing a mission statement. only those managers who will use the mission very few people to ease consensus-building as many managers as possible as wide a variety of upper-level managers as possible Which of the following is not one of the reasons identified by King and Cleland for carefully developing a written mission? To ensure ambiguity of purpose within the organization To establish a general tone or organizational climate To provide a basis for allocating organizational resources To facilitate the translation of objectives into a work structure involving the assignment of tasks to responsible elements within the organization During strategy _________, corporate social policy should be set and administered. formulation control evaluation implementation What is the recommended length of an effective mission statement? Less than 200 words One sentence of 10 to 20 words
    • There is no recommendation. It can be as long as the management wants. One pageA study by Rarick and Vitton found that firms with a formalized mission statement havethe average return on shareholdersÕ equity compared to those firms without aformalized mission statement. twice five times half one quarterA good operating philosophy of organizations should be to ________ and then_________. identify customersÕ needs; provide a product or service to fulfill them develop a market; identify a customer base take an environmental orientation first; take a customer orientation develop a product or service; identify a market for the product or serviceWhich of the following is a question that an effective mission statement answers? Is the firm technologically current? What is the company we want to be in the long-range future? What is our net worth? What is our profitability?The vision statement should be short, preferably one sentence. True FalseCommitment to a companyÕs strategy and intellectual agreement on the strategies to bepursued do not necessarily translate into an emotional bond. True FalseThe highest level of managers should develop the vision statement, which should beconcise. True FalseEach division of a multidivisional organization should develop a mission statement. True FalseStakeholders of an organization include stockholders, customers and creditors, but notthe competitors. True FalseDeveloping a comprehensive mission statement is important because divergent viewscan be revealed and resolved through the process. True False
    • An effective mission statement should include five components. True False During strategy formulation, social policy should be reaffirmed and changed. True False A mission statement should be specific and thus encourage the creative potential for the organization. True False The term social policy embraces managerial philosophy and thinking at the highest levels of an organization. True False What is the purpose of a mission statement? Differentiate between a mission and a vision statement.Many organizations develop both a mission statement and a vision statement. Whereas themission statement answers the question Ò"What is our business?Ó" the vision statementanswers the question Ò"What do we want to become?Ó" Students should refer to Ò"What Is OurBusiness?Ó" and Ò"Vision Versus MissionÓ" for more information related to this question. Thesesections are located on pages 59-60. Why are the vision and mission statements important to a given organization? Why arethey important to effective strategic management? Cite several reasons organizations shouldcarefully develop a written mission statement. King and Cleland recommend that organizations carefully develop a written missionstatement. They provide several reasons stated in the text. These include ensuring unanimity ofpurpose within the organization, providing a basis for allocating resources, establishing a generalorganizational climate, serving as a focal point for identification with the organizationÕs purposeand direction, and others. Students should refer to the importance of vision and missionstatements on pages 61-62 in developing their answers. Why is the resolution of divergent views important in an organization? How can thedevelopment of a mission statement help the organization to achieve this? What could happen ifconsiderable disagreement over the vision and mission of a firm is not resolved?
    • The resolution of divergent views is important in any organization. It is more important tobuild consensus on the mission and vision of the firm than to make compromises that do notrepresent the views of either party. If left unresolved, divergent views can lead to constantdisagreements among the organizationÕs strategists. Students may refer to a resolution ofdivergent views on pages 62-64 for more information. What does it mean to reflect the anticipations of customers? How can a companyincorporate this idea when developing its mission statement? A good mission statement reflects the anticipations of customers. Rather than developinga product and then trying to find a market, the operating philosophy of organizations should be toidentify customersÕ needs and then provide a product or service to fulfill those needs. This ispart of establishing a customer orientation instead of a product orientation or specific serviceorientation. A major reason for developing a mission statement is to attract customers who givemeaning to an organization. For more regarding this question, students may refer to a customerorientation on pages 66-68. List and explain the nine essential components of a mission statement. Why are theseimportant? The mission statement is often the most visible and public part of the strategic-management process. There are nine critical components that should be included in the missionstatement. They can be addressed by asking several questionsÑ-who, what, where, how much,or what. Students should identify all nine componentsÑ-customers, products, markets,technology, concern for survival, growth and profitability, philosophy, self-concept, concern forpublic image, and concern for employees. Students can refer to mission statement componentson page 70 for more information related to this question.
    • Your Results for "Chapter Quiz"1.Your Answer: philosophy Correct.2.Your Answer: long-term objectives; goalsCorrect Answer:vision statements; mission statements Incorrect. The correct answer is vision statements; mission statements.3.Your Answer: in a competitive market analysis.Correct Answer:on the front of annual reports. Incorrect. The correct answer is on the front of annual reports.4.Your Answer: only those managers who will use the missionCorrect Answer:as many managers as possible Incorrect. The correct answer is as many managers as possible.5.Correct Answer:To ensure ambiguity of purpose within the organization6.
    • Your Answer: implementation Correct.7.Your Answer: Less than 200 words Correct.8. .Correct Answer:twice Incorrect. The correct response is twice.9.Your Answer: identify customersÕ needs; provide a product or service to fulfill them Correct.10.Your Answer: Is the firm technologically current? Correct.11.Your Answer:True Correct.12.Correct Answer:True Incorrect. This does not necessarily translate into an emotional bond; hence, strategiesthat have been formulated may not be implemented.13.Correct Answer:False Incorrect. As many managers as possible should have input into developing the visionstatement.14.Correct Answer:
    • True Incorrect. Each division of a multidivisional organization should develop a missionstatement.15.Your Answer:False Correct.16.Your Answer:True Correct.17.Correct Answer:False Incorrect. An effective mission statement should include nine components.18.Correct Answer:False Incorrect. It should be changed during strategy evaluation.19.Correct Answer:False Incorrect. A good mission statement should not be too specific; otherwise, it could stiflethe potential for creative growth for the organization.20.Your Answer:True Correct.
    • Chapter 3 Chapter QuizAccording to I/O theorists, which of the following contributes least to firm performance? Internal resources Economies of scale Barriers to market entry Product differentiationThe external audit is aimed at: taking advantage of potential threats and minimizing external opportunities. developing an exhaustive list of factors that could influence the business. identifying key variables that offer actionable responses. developing an infinite list of opportunities that could benefit a firm.Which of the following is not a misperception about business intelligence that prevailsamong American executives today? Running an intelligence program requires lots of people, computers, and other resources. Business is not equal to espionage. Intelligence gathering is an unethical business practice. Collecting intelligence about competitors violates antitrust laws.__________ are the results of a low value of the dollar. Lower imports and higher exports Lower imports and lower exports Higher imports and higher exports Higher imports and lower exportshas replaced as the worlds hottest destination for foreign direct investment. Great Britain; China Great Britain; the United States The United States; China China; the United States_______________ and ______________ are creating similar patterns of consumption indiverse cultures worldwide. Tax harmonization; legal factors Distinct domestic markets; the climate for international business Mass communication; high technology
    • Corporate tax breaks; mass communication Many businesses use _____________ to obtain most of their information on competitors because it is fast, thorough, and accurate. past performance the Internet SEC reports other firms mission statements All of these, except__________, are part of Porters competitive forces in industry analysis. potential entry of new competitors bargaining power of suppliers development of substitute products bargaining power of unions In its simplest sense, the international challenge faced by U.S. business is twofold: how to increase exports to other countries and how to increase importsfrom other countries. how to defend domestic markets against imported goods while minimizing exports. how to maximize exports to other nations and how to defend domestic markets againstimported goods. how to minimize imports and exports in domestic markets and slowly decreaseglobalization. _______________ are most appropriate when historical data are available and when therelationships among key variables are expected to remain the same in the future. Qualitative forecasts Econometric model analyses Quantitative forecasts A scenario forecast Five major categories of external variables are: (1) economic forces, (2) social andcultural forces, (3) political, governmental and legal forces, (4) technological forces and (5)demographic forces. True
    • False Significant and unequal effects on companies in different industries and in differentlocations come from trends in the dollars value. True False The absence of a legal system deters firms from initiating business with China. TrueFalse Research findings suggest that approximately 36 percent of a firms profitability can beexplained by the industry, whereas 20 percent is attributed to the firms internal factors. TrueFalse Nine out of 10 large companies have employees dedicated solely to gatheringcompetitive intelligence. True False Acquisition is essential to growth in the most competitive companies. TrueFalse Bargaining power of consumers is usually the most powerful of Porters five competitive
    • forces. TrueFalse Many large multinational firms are moving out of EU member-countries into Switzerlandand Ireland to avoid costs associated with tax harmonization. TrueFalse Poor infrastructure and little respect for legal contracts are two risks that still restrain firmsfrom initiating business with China. True False Based on the best information at the time, assumptions serve as checkpoints on thevalidity of strategies. True False Identify the five broad categories of external forces. Which two do you think are the mostimportant for a firm that specializes in government contracts for the military? Support yourresponse. To create paragraphs in your essay response, type <p> at the beginning of theparagraph, and </p> at the end. Briefly explain the rationale behind the industrial organization (I/O) approach tocompetitive advantage. Do you agree with this approach? To create paragraphs in your essay response, type <p> at the beginning of the
    • paragraph, and </p> at the end. Explain the importance of technological forces for a firm. Identify some recenttechnological forces that have been factors in how companies compete in a particular industryand explain how those forces affected competition. To create paragraphs in your essay response, type <p> at the beginning of theparagraph, and </p> at the end. Differentiate between market commonality and resource similarity. What is meant by eachof these terms? How are they used? To create paragraphs in your essay response, type <p> at the beginning of theparagraph, and </p> at the end. What is the Competitive Profile Matrix? How is it used? What factors are included in thisanalysis? To create paragraphs in your essay response, type <p> at the beginning of theparagraph, and </p> at the end.Copyright © 1995-2008, Pearson Education, Inc., publishing as Pearson Prentice HallLegal and Privacy Terms
    • Your Results for "Chapter Quiz"Print this pageSite Title: Strategic Management: Concepts and Cases, 11EBooks Title: Strategic Management: Concepts and Cases, 11th EditionBooks Author: DavidLocation on Site: Chapter 3 > Chapter QuizDate/Time Submitted:October 27, 2008 at 1:06 AM (EDT) Summary of Results45% Correct of 20 scored items: 9 correct: 45%11 incorrect: 55%5 questions not scored. 20 scored questions.More information about scoring1. According to I/O theorists, which of the following contributes least to firmperformance?Your Answer: Internal resources Correct.2. The external audit is aimed at:Your Answer: taking advantage of potential threats and minimizing external opportunities.
    • Correct Answer:identifying key variables that offer actionable responses. Incorrect. The correct answer is identifying key variables that offer actionable responses.3. Which of the following is not a misperception about business intelligence thatprevails among American executives today?Your Answer: Running an intelligence program requires lots of people, computers, and otherresources.Correct Answer:Business is not equal to espionage. Incorrect. This is a misperception about business intelligence. The correct answer is thatbusiness is not equal to espionage.4. __________ are the results of a low value of the dollar.Your Answer: Lower imports and higher exports Correct.5. has replaced as the worlds hottest destination for foreign direct investment.Your Answer: Great Britain; the United StatesCorrect Answer:China; the United States Incorrect. The correct answer is China; the United States.6. _______________ and ______________ are creating similar patterns ofconsumption in diverse cultures worldwide.Your Answer: Mass communication; high technology Correct.7. Many businesses use _____________ to obtain most of their information oncompetitors because it is fast, thorough, and accurate.Your Answer: other firms mission statementsCorrect Answer:the Internet Incorrect. The correct answer is the Internet.8. All of these, except__________, are part of Porters competitive forces in industryanalysis.Your Answer: bargaining power of unions
    • Correct.9. In its simplest sense, the international challenge faced by U.S. business istwofold:Your Answer: how to minimize imports and exports in domestic markets and slowly decreaseglobalization.Correct Answer:how to maximize exports to other nations and how to defend domestic marketsagainst imported goods. Incorrect. The correct answer is how to maximize exports to other nations and how todefend domestic markets against imported goods.10. _______________ are most appropriate when historical data are available andwhen the relationships among key variables are expected to remain the same in the future.Your Answer: Quantitative forecasts Correct.11. Five major categories of external variables are: (1) economic forces, (2) socialand cultural forces, (3) political, governmental and legal forces, (4) technological forces and (5)demographic forces.Your Answer:TrueCorrect Answer:False Incorrect. The five categories are: (1) economic forces, (2) social, cultural, demographic,and environmental forces, (3) political, governmental, and legal forces, (4) technological forces,and (5) competitive forces.12. Significant and unequal effects on companies in different industries and indifferent locations come from trends in the dollars value.Your Answer:True Correct.13. The absence of a legal system deters firms from initiating business with China.Your Answer:FalseCorrect Answer:True
    • Incorrect. The absence of a legal system is one among several serious risks that stilldeters firms from initiating business with China.14. Research findings suggest that approximately 36 percent of a firms profitabilitycan be explained by the industry, whereas 20 percent is attributed to the firms internal factors.Your Answer:False Correct.15. Nine out of 10 large companies have employees dedicated solely to gatheringcompetitive intelligence.Your Answer:FalseCorrect Answer:True Incorrect. Nine out of 10 large companies have employees dedicated solely to gatheringcompetitive intelligence.16. Acquisition is essential to growth in the most competitive companies.Your Answer:TrueCorrect Answer:False Incorrect. Acquisition is essential to growth; the most successful purchases are in nichesthat add a technology or a related market.17. Bargaining power of consumers is usually the most powerful of Porters fivecompetitive forces.Your Answer:False Correct.18. Many large multinational firms are moving out of EU member-countries intoSwitzerland and Ireland to avoid costs associated with tax harmonization.Your Answer:FalseCorrect Answer:True
    • Incorrect. Many large multinational firms are moving out of EU member-countries intoSwitzerland and Ireland to avoid costs associated with tax harmonization.19. Poor infrastructure and little respect for legal contracts are two risks that stillrestrain firms from initiating business with China.Your Answer:True Correct.20. Based on the best information at the time, assumptions serve as checkpoints onthe validity of strategies.Your Answer:FalseCorrect Answer:True Incorrect. Based on the best information at the time, assumptions serve as checkpointson the validity of strategies.21. Identify the five broad categories of external forces. Which two do you think arethe most important for a firm that specializes in government contracts for the military? Supportyour response.Your Answer:sdas The five broad categories include economic forces; social, cultural, demographic, andenvironmental forces; political, governmental, and legal forces; technological forces; andcompetitive forces. The two that would likely be most directly important to a firm that didgovernment contract work to support the military would be technological forces and the political,governmental, and legal forces. Students should refer to key external forces on page 83 for moreinformation.22. Briefly explain the rationale behind the industrial organization (I/O) approach tocompetitive advantage. Do you agree with this approach?Your Answer:sa In the first part of the answer, students should explain that the I/O approach advocatesthat external (industry) factors are more important that internal factors in a firm achievingcompetitive advantage. Competitive advantage is determined largely by competitive positioningwithin an industry. In the second part of the response, students should demonstrate anunderstanding of the I/O view as separate and distinct from other views on competitiveadvantage.
    • 23. Explain the importance of technological forces for a firm. Identify some recenttechnological forces that have been factors in how companies compete in a particular industryand explain how those forces affected competition.Your Answer:sda Revolutionary technological changes and discoveries are having a dramatic impact onorganizations. Superconductivity, for instance, has revolutionized transportation, utility,healthcare, electrical, and computer industries. The Internet is another example. Students shouldoffer several examples and may refer to technological forces on page 93 in the text for furtherexplanation on this topic.24. Differentiate between market commonality and resource similarity. What is meantby each of these terms? How are they used?Your Answer:asd Market commonality and resource similarity are used to study rivalry among competitors.Market commonality can be defined as the number and significance of markets that a firmcompetes in with rivals. Resource similarity is the extent to which the type and amount of a firmsinternal resources are comparable to a rival. Students may refer to market commonality andresource similarity on page 99 for more information regarding this question.25. What is the Competitive Profile Matrix? How is it used? What factors are includedin this analysis?Your Answer:dsa The Competitive Profile Matrix (CPM) identifies a firms major competitors and itsparticular strengths and weaknesses in relation to a sample firms strategic position. Criticalsuccess factors in a CPM include both internal and external issues. Factors often included in thisanalysis include breadth of product line, effectiveness of sales distribution, proprietary or patentadvantages, location, production capacity and efficiency, experience, union relations,technological advantages, and e-commerce expertise. Students should refer to the CompetitiveProfile Matrix (CPM) on pages 111-112.E-mail Your ResultsMy name is (first last):E-mail my results to:E-mail address:Send as:Me:
    • Instructor:TA:Other:HelpCopyright © 1995-2008, Pearson Education, Inc., publishing as Pearson Prentice Hall | Legal andPrivacy TermsHome Chapter 4 Chapter 4: The Internal AssessmentChapter 4: The Internal AssessmentThis activity contains 25 questions. A firmÕs strengths that cannot be easily matched or imitated by competitors are called: external opportunities. distinctive competencies. special properties. competitive ventures. ___________ can inhibit strategic management, for example, by leading managers tomiss the significance of changing external conditions. Rules and guidelines Culture Market segmentation Competitive awareness
    • The five functions of management are planning, organizing, _________, staffing, andcontrolling. rewarding communicating implementing motivating A standardized, detailed set of techniques and behaviors that manage anxieties butseldom produce intended, technical consequences of practical importance is a: ritual. saga. metaphor. rite. __________ ratios measure managementÕs overall effectiveness as shown by thereturns generated on sales and investment. Liquidity Profitability Growth Leverage The internal resource categories used in the resource-based approach are physicalresources, human resources, and: financial resources. natural resources. technological resources. organizational resources.
    • Americans place a high priority on __________ whereas many foreigners do not. material wealth family relationships silence Staffing involves all of these activities except: recruiting. managing union relations. customer analysis. training and developing. Which of the following ties all business functions together and provides the basis for allmanagerial decisions? Management Marketing Information Technology A _____________ receives raw material from both the external and internal evaluation ofan organization. management information system data transformer quality control mechanism process function system In China, activities involve concern for guanxi, or personal relations. TrueFalse
    • The process of performing an internal audit closely parallels the process of performing anexternal one. TrueFalse The basic premise of the RBV is that the mix, type, amount, and nature of a firmÕsinternal resources should be considered secondarily in devising strategies that can lead tosustainable competitive advantage. True False Synergy is the 2 + 2 = 5 effect. TrueFalse Sometimes an organization will pursue a backward integration strategy primarily to gainbetter control over prices charged to consumers. TrueFalse An opportunity analysis is an appraisal of the costs, benefits and risks associated withdecisions. TrueFalse An example of activity ratios is the times-interest-earned ratio.
    • TrueFalse Capacity decisions concern the design of the physical production system. TrueFalse In the value chain, total revenues minus total costs of all activities undertaken to developand market a product or service yields value. TrueFalse Internal R&D and contract R&D are the two basic forms of R&D in organizations. TrueFalse Describe the process of performing an internal audit. What are the goals of an internalaudit? To create paragraphs in your essay response, type <p> at the beginning of theparagraph, and </p> at the end. What is the resource-based view? Describe this approach to competitive advantage andexplain its general reasoning. To create paragraphs in your essay response, type <p> at the beginning of theparagraph, and </p> at the end.
    • Compare and contrast U.S. firms with European firms. Why do the management styles,workplace norms, and other factors of work life differ in Europe from the U.S.? To create paragraphs in your essay response, type <p> at the beginning of theparagraph, and </p> at the end. What does it mean for a manager to be motivating? What affects morale and employeesatisfaction? To create paragraphs in your essay response, type <p> at the beginning of theparagraph, and </p> at the end. Identify and describe the Internal Factor Evaluation (IFE) Matrix. What is its purpose instrategic management? To create paragraphs in your essay response, type <p> at the beginning of theparagraph, and </p> at the end.Copyright © 1995-2008, Pearson Education, Inc., publishing as Pearson Prentice HallLegal and Privacy Terms
    • Your Results for "Chapter 4: The Internal Assessment"Print this pageSite Title: Strategic Management: Concepts and Cases, 11EBooks Title: Strategic Management: Concepts and Cases, 11th EditionBooks Author: DavidLocation on Site: Chapter 4 > Chapter 4: The Internal AssessmentDate/Time Submitted:October 27, 2008 at 1:09 AM (EDT) Summary of Results45% Correct of 20 scored items: 9 correct: 45%11 incorrect: 55%5 questions not scored. 20 scored questions.More information about scoring1. A firmÕs strengths that cannot be easily matched or imitated by competitors arecalled:Your Answer: external opportunities.Correct Answer:distinctive competencies. Incorrect. The correct answer is distinctive competencies.2. ___________ can inhibit strategic management, for example, by leadingmanagers to miss the significance of changing external conditions.Your Answer: Market segmentationCorrect Answer:Culture Incorrect. The correct answer is culture.3. The five functions of management are planning, organizing, _________, staffing,and controlling.Your Answer: motivating
    • Correct.4. A standardized, detailed set of techniques and behaviors that manage anxietiesbut seldom produce intended, technical consequences of practical importance is a:Your Answer: metaphor.Correct Answer:ritual. Incorrect. The correct answer is ritual.5. __________ ratios measure managementÕs overall effectiveness as shown bythe returns generated on sales and investment.Your Answer: GrowthCorrect Answer:Profitability Incorrect. The correct answer is profitability.6. The internal resource categories used in the resource-based approach arephysical resources, human resources, and:Your Answer: organizational resources. Correct.7. Americans place a high priority on __________ whereas many foreigners do not.Your Answer: silenceCorrect Answer:material wealth Incorrect. The correct answer is material wealth.8. Staffing involves all of these activities except:Your Answer: customer analysis. Correct.9. Which of the following ties all business functions together and provides the basisfor all managerial decisions?Your Answer: Information Correct.10. A _____________ receives raw material from both the external and internal
    • evaluation of an organization.Your Answer: process function systemCorrect Answer:management information system Incorrect. The correct answer is management information system.11. In China, activities involve concern for guanxi, or personal relations.Your Answer:True Correct.12. The process of performing an internal audit closely parallels the process ofperforming an external one.Your Answer:True Correct.13. The basic premise of the RBV is that the mix, type, amount, and nature of afirmÕs internal resources should be considered secondarily in devising strategies that can leadto sustainable competitive advantage.Your Answer:False Correct.14. Synergy is the 2 + 2 = 5 effect.Your Answer:FalseCorrect Answer:True Incorrect. Synergy refers to the 2 + 2 = 5 effect.15. Sometimes an organization will pursue a backward integration strategy primarilyto gain better control over prices charged to consumers.Your Answer:False Correct.
    • 16. An opportunity analysis is an appraisal of the costs, benefits and risks associatedwith decisions.Your Answer:FalseCorrect Answer:True Incorrect. An opportunity analysis is an appraisal of the costs, benefits and risksassociated with decisions.17. An example of activity ratios is the times-interest-earned ratio.Your Answer:False Correct.18. Capacity decisions concern the design of the physical production system.Your Answer:TrueCorrect Answer:False Incorrect. Process decisions concern the design of the physical production system.19. In the value chain, total revenues minus total costs of all activities undertaken todevelop and market a product or service yields value.Your Answer:FalseCorrect Answer:True Incorrect. In the value chain, total revenues minus total costs of all activities undertakento develop and market a product or service yields value.20. Internal R&D and contract R&D are the two basic forms of R&D in organizations.Your Answer:FalseCorrect Answer:True Incorrect. The two basic forms of R&D in organizations are internal R&D and contractR&D.
    • 21. Describe the process of performing an internal audit. What are the goals of aninternal audit?Your Answer:asda The process of performing an internal audit closely parallels the process of performing anexternal audit. The internal audit requires gathering and assimilating information about the firmÕsmanagement, marketing, finance/accounting, production/operations, research and development,and management information systems operations. Key factors should be prioritized so that thefirmÕs most important strengths and weaknesses can be determined collectively. Students mayrefer to the process of performing an internal audit on page 123.22. What is the resource-based view? Describe this approach to competitiveadvantage and explain its general reasoning.Your Answer:das The RBV approach to competitive advantage contends that internal resources are moreimportant for a firm than external factors in achieving and sustaining competitive advantage.According to its proponents, organizational performance will primarily be determined by internalresources that can be grouped into three all-encompassing categories: physical, human, andorganizational resources. Students may refer to the Resource-Based View (RBV) on page 125.23. Compare and contrast U.S. firms with European firms. Why do the managementstyles, workplace norms, and other factors of work life differ in Europe from the U.S.?Your Answer:sa In Europe, most workers are unionized and enjoy more frequent vacations and holidaysthan U.S. workers. A 90-minute lunch break plus 20-minute morning and afternoon breaks arecommon in European firms. Also, guaranteed permanent employment is commonly a part of thetypical European employment contract. Students can refer to U.S. versus foreign cultures onpage 128 for more information.24. What does it mean for a manager to be motivating? What affects morale andemployee satisfaction?Your Answer:as Motivating can be defined as the process of influencing people to accomplish specificobjectives. Motivation explains why some people work hard and others do not. The motivatingfunction of management includes at least four major components: leadership, group dynamics,communication, and organizational change. Refer to motivating on page 134 for moreinformation.25. Identify and describe the Internal Factor Evaluation (IFE) Matrix. What is itspurpose in strategic management?
    • Your Answer:as The IFE Matrix is a strategy-formulation tool that summarizes and evaluates the majorstrengths and weaknesses in the functional areas of a business. It also provides a basis foridentifying and evaluating relationships among those areas. The IFE Matrix is developed in fivesteps. The last step is to sum the weighted scores for each variable to determine the totalweighted score for the organization. Students can refer to pages 157-158 in the section on theIFE Matrix for more information.E-mail Your ResultsMy name is (first last):E-mail my results to:E-mail address:Send as:Me:Instructor:TA:Other:HelpCopyright © 1995-2008, Pearson Education, Inc., publishing as Pearson Prentice Hall | Legal andPrivacy Terms
    • Home Chapter 5 Chapter QuizChapter QuizThis activity contains 25 questions. __________ is based on the belief that the true measure of a really good strategist is theability to solve problems. Managing by subjectives Managing by extrapolation Managing by crisis Managing by hope Long-term objectives are needed at the ____________ of an organization. corporate and divisional levels corporate levels corporate, divisional, and functional levels divisional and functional levels __________ bankruptcy applies to municipalities. Chapter 7 Chapter 9 Chapter 11 Chapter 12
    • Many, if not most, organizations pursue a: concentric diversification. combination strategy. geographic strategy. product development strategy. An example of _____________ strategy is establishing Web sites to sell products directlyto consumers. backward integration conglomerate diversification horizontal integration forward integration Which of the following is not a guideline for pursuing liquidation? When divestiture has not been successful When an organizationÕs only alternative is bankruptcy When the stockholders of the firm can minimize their losses by selling the firmÕs assets When the organization has successfully pursued retrenchment A popular strategy that occurs when two or more companies form a temporarypartnership for the purpose of capitalizing on some opportunity is called a(n): merger. joint venture. acquisition. takeover. All of the following situations are conducive to market penetration except _________. when current markets are not saturated with a particular product orservice when the usage rate of present customers could be increased significantly
    • when increased economies of scale provide major competitive advantages when the correlation between dollar sales and dollar marketing expenditures historicallyhas been low ______________ is selling a division of an organization. Franchising Divestiture Liquidation Horizontal integration ______________ strategy can be especially effective when price competition among rivalsellers is especially vigorous and most buyers use the product in the same ways. Differentiation Focus Cost leadership Market penetration Managing by subjective is also referred to as the mystery approach to decision making. TrueFalse To successfully employ a focus strategy, a firm must ensure that its total costs across itsoverall value chain are lower than competitorsÕ total costs. TrueFalse The overall aim of the Balanced Scorecard is to balance financial objectives with strategicobjectives.
    • TrueFalse High-velocity change is becoming more the rule rather than the exception. TrueFalse Chapter 9 bankruptcy applies to farmers. TrueFalse Joint ventures are being used increasingly because they allow companies to minimizerisk. TrueFalse Concentric diversification strategy is effective when an organization has a weakmanagement team. TrueFalse Pioneering new and better technologies is an action based on the strategic posture ofleading change. True False
    • An acquisition occurs when a large organization purchases a smaller firm, whereas amerger occurs when two organizations of about equal size unite to form one enterprise. TrueFalse Cost advantage refers to the benefits a firm may achieve by entering a new market ordeveloping a new product or service prior to rival firms. TrueFalse What are long-term objectives? Describe their purpose within various levels of anorganization. To create paragraphs in your essay response, type <p> at the beginning of theparagraph, and </p> at the end. Compare market penetration, market development, and product development. Give anexample of each intensive strategy. To create paragraphs in your essay response, type <p> at the beginning of theparagraph, and </p> at the end. What are the diversification strategies? Describe the two general types of diversificationstrategies and explain when each type is appropriate. To create paragraphs in your essay response, type <p> at the beginning of theparagraph, and </p> at the end.
    • What is differentiation? When would a firm pursue a differentiation strategy? Give anexample of a firm that uses differentiation. To create paragraphs in your essay response, type <p> at the beginning of theparagraph, and </p> at the end. What is business-process outsourcing (BPO)? For what reasons would companieschoose to outsource their functional operations? To create paragraphs in your essay response, type <p> at the beginning of theparagraph, and </p> at the end.Copyright © 1995-2008, Pearson Education, Inc., publishing as Pearson Prentice HallLegal and Privacy TermsYour Results for "Chapter Quiz"Print this pageSite Title: Strategic Management: Concepts and Cases, 11EBooks Title: Strategic Management: Concepts and Cases, 11th EditionBooks Author: DavidLocation on Site: Chapter 5 > Chapter Quiz
    • Date/Time Submitted:October 27, 2008 at 1:11 AM (EDT) Summary of Results45% Correct of 20 scored items: 9 correct: 45%11 incorrect: 55%5 questions not scored. 20 scored questions.More information about scoring1. __________ is based on the belief that the true measure of a really goodstrategist is the ability to solve problems.Your Answer: Managing by subjectivesCorrect Answer:Managing by crisis Incorrect. The correct answer is managing by crisis.2. Long-term objectives are needed at the ____________ of an organization.Your Answer: corporate and divisional levelsCorrect Answer:corporate, divisional, and functional levels Incorrect. The correct answer is corporate, divisional, and functional levels.3. __________ bankruptcy applies to municipalities.Your Answer: Chapter 11Correct Answer:Chapter 9 Incorrect. The correct answer is Chapter 9.4. Many, if not most, organizations pursue a:Your Answer: concentric diversification.Correct Answer:combination strategy. Incorrect. The answer is combination strategy.5. An example of _____________ strategy is establishing Web sites to sell productsdirectly to consumers.Your Answer: conglomerate diversification
    • Correct Answer:forward integration Incorrect. The correct answer is forward integration.6. Which of the following is not a guideline for pursuing liquidation?Your Answer: When the stockholders of the firm can minimize their losses by selling the firmÕsassetsCorrect Answer:When the organization has successfully pursued retrenchment Incorrect. Liquidation would be appropriate in this situation. The correct answer is whenan organization has successfully pursued retrenchment.7. A popular strategy that occurs when two or more companies form a temporarypartnership for the purpose of capitalizing on some opportunity is called a(n):Your Answer: joint venture. Correct.8. All of the following situations are conducive to market penetration except_________.Your Answer: when the usage rate of present customers could be increased significantlyCorrect Answer:when the correlation between dollar sales and dollar marketing expenditureshistorically has been low Incorrect. This is conducive to market development. The correct answer is when thecorrelation between dollar sales and dollar marketing expenditures historically has been low.9. ______________ is selling a division of an organization.Your Answer: Horizontal integrationCorrect Answer:Divestiture Incorrect. The correct answer is divestiture.10. ______________ strategy can be especially effective when price competitionamong rival sellers is especially vigorous and most buyers use the product in the same ways.Your Answer: DifferentiationCorrect Answer:Cost leadership Incorrect. The correct response is cost leadership strategy.11. Managing by subjective is also referred to as the mystery approach to decision
    • making.Your Answer:True Correct.12. To successfully employ a focus strategy, a firm must ensure that its total costsacross its overall value chain are lower than competitorsÕ total costs.Your Answer:False Correct.13. The overall aim of the Balanced Scorecard is to balance financial objectives withstrategic objectives.Your Answer:False Correct.14. High-velocity change is becoming more the rule rather than the exception.Your Answer:True Correct.15. Chapter 9 bankruptcy applies to farmers.Your Answer:False Correct.16. Joint ventures are being used increasingly because they allow companies tominimize risk.Your Answer:FalseCorrect Answer:True Incorrect. Joint ventures and cooperative arrangements are being used increasinglybecause they allow companies to improve communications and networking, to globalizeoperations, and to minimize risk.
    • 17. Concentric diversification strategy is effective when an organization has a weakmanagement team.Your Answer:TrueCorrect Answer:False Incorrect. Concentric diversification is effective when an organization has a strongmanagement team.18. Pioneering new and better technologies is an action based on the strategicposture of leading change.Your Answer:True Correct.19. An acquisition occurs when a large organization purchases a smaller firm,whereas a merger occurs when two organizations of about equal size unite to form oneenterprise.Your Answer:True Correct.20. Cost advantage refers to the benefits a firm may achieve by entering a newmarket or developing a new product or service prior to rival firms.Your Answer:False Correct.21. What are long-term objectives? Describe their purpose within various levels of anorganization.Your Answer:vbc Long-term objectives represent the results expected from pursuing certain strategies. Thetime frame for objectives and strategies (actions to be taken to accomplish long-term objectives)should be consistent, usually from two to five years. Objectives should be quantitative,measurable, realistic, understandable, challenging, hierarchical, obtainable, and congruentamong organizational units. They are needed at the corporate, divisional, functional, andoperational levels. Students may see long-term objectives and the nature of long-term objectiveson page 168.
    • 22. Compare market penetration, market development, and product development.Give an example of each intensive strategy.Your Answer:cv Market penetration is seeking increased market share for present products or services inpresent markets through greater marketing efforts. Market development comes with introducingpresent products or services into new geographic areas. Product development is seekingincreased sales by improving present products or services or developing new ones. Studentsshould provide specific examples. See Table 5-3 on alternative strategies, defined andexemplified for summary information.23. What are the diversification strategies? Describe the two general types ofdiversification strategies and explain when each type is appropriate.Your Answer:c There are two general types of diversification strategies: related and unrelated.Businesses are related when their value chains possess competitively valuable, cross-businessstrategic fits. Businesses are said to be unrelated when their value chains are so dissimilar thatno competitively valuable, cross-business relationships exist. Most companies favor relateddiversification strategies in order to capitalize on synergies. Students should see diversificationstrategies on page 180 for information on this question.24. What is differentiation? When would a firm pursue a differentiation strategy? Givean example of a firm that uses differentiation.Your Answer:vc Differentiation is one of Michael PorterÕs generic strategies. It is a strategy aimed atproducing products and services considered unique industry-wide and directed at consumers whoare relatively price-insensitive. Students should provide an example of a firm that usesdifferentiation and give support for their responses. See Michael PorterÕs five generic strategieson pages 188-191.25. What is business-process outsourcing (BPO)? For what reasons wouldcompanies choose to outsource their functional operations?Your Answer:vc Business-process outsourcing, or BPO, is a rapidly growing new business that involvescompanies taking over the functional operations, such as HR or payroll, of other firms.Companies are choosing to outsource their functional operations more and more for severalreasons: (1) it is less expensive, (2) it allows the firm to focus on its core businesses, and (3) itenables the firm to provide better services. There are other advantages to the strategy as well.Students may refer to outsourcing on page 201.E-mail Your Results
    • My name is (first last):E-mail my results to:E-mail address:Send as:Me:Instructor:TA:Other:HelpCopyright © 1995-2008, Pearson Education, Inc., publishing as Pearson Prentice Hall | Legal andPrivacy Terms