90 exam questions BUS 599 Strategic Management ExamQuestion

90 exam questions
BUS 599: Strategic Management Exam
Question 1
Which of the following IS NOT an argument in favor of
corporate social responsibility?
(a) Imposes unequal costs among competitors.
(b) Responds to changing stakeholders’ demands.
(c) Corrects social problems caused by business.
(d) Discourages government regulation.
Question 2
The ethical roots of the classical model of corporate social
responsibility are found in which statement?
(a) The idea that the interests of stakeholders are as important
as the interests of a corporation’s stockholders.
(b) The free market theory which holds that managers are

ethically obliged to make as much money as possible for their.
(c) The ethical imperative to cause no harm.
(d) The ethical imperative to prevent harm.
Question 4
Which one of the following propositions correctly describes the
concept of a right?
(a) Rights protect a person’s wants.
(b) There is really no distinction between a person’s wants and
interests. Rights protect both.
(c) Rights protect a person’s interests.
(d) My rights never correspond to your duties and your duties
never correspond to my rights.
Question 5
Human rights are:
(a) The standards of treatment to which all people are entitled.

(b) Can safely be ignored by international companies.
(c) Defined in the united Nations Global Compact.
(d) Of no interest to customers of international companies.
Question 6
Which statement characterizes the moral reasoning typically
found in a child?
(a) When in ROME, do as the Romans do.
(b) I’II scratch your back, if you’II scratch mine.
(c) Seek the greatest good for the greatest number.
(d) Respect the rights of others.
Question 7
The Iron Law of Responsibility says that:
(a) In the long run, those who do not use power responsibly will
lose it.

(b) In the short run, sacrifice social goals for economic goals.
(c) Law is most important, more than social or economic
responsibility.
(d) In the long run, economic responsibility leads to social
responsibility.
Question 8
External rewards and internal rewards relate to which part of
the ethical decision-making framework?
(a) Individual factors
(b) Significant others
(c) Cognitive moral development
(d) Intentions
(e) Opportunity
Question 10

Which one of the following statements about multinational
corporations is FALSE?
(a) MNCs are corporate organizations that operate on a global
scale without significant ties to any one nation or region.
(b) MNCs are inherently unethical.
(c) MNCs are cauterized by a global strategy of focusing on
opportunities throughout the world.
(d) Some MNCs are so large and powerful that their revenues
are greater than the gross domestic products of some countries.
(e) Because of their size and power, MNCs have been the
subject of much ethical criticism and the source of a number of
ethical issues.
Question 11
The most intense rivalry results from:
(a) Numerous equally balanced competitors, slow industry
growth, and high fixed or storage costs.

(b) Few competitors, slow industry growth, lack of
differentiation, and high fixed or storage costs.
(c) Numerous equally balanced competitors, manufacturing
capacity increasing only in large increments, and low exit
barriers.
(d) A high level of differentiation.
Question 12
A crash R&D program by one firm cannot replicate a
successful technology developed by another firm when research
findings cumulate.
(a) Social complexity.
(b) Path dependency.
(c) Physical uniqueness.
(d) Causal ambiguity
Question 13
Emotional intelligence, as proposed by Daniel Goleman, is
manifest in self-awareness, self-regulation, social skills,

empathy, and:
(a) Ambition
(b) Motivation
(c) Sympathy.
(d) Open mindedness
Question 14
Which of the following is not characteristic of well-constructed
goals?
(a) They are precise and measurable.
(b) They are the result of a group decision process.
(c) They specify a time period.
(d) They are challenging but realistic.
(e) They address critical issues.
Question 15
There are several perspectives of competition. One perspective

is zero-sum thinking. Zero-sum thinking means that:
(a) All parts of the organizations gain at no loss.
(b) In order for someone to gain, others must experience no gain
or benefit.
(c) One can only gain at the expense of someone else.
(d) Everyone in the organization shares gains and losses
equally.
Question 16
Kaizen means:
(a) radical innovation.
(b) Incremental innovation.
(c) Open innovation.
(d) Continuous improvement.
Question 17

Costs associated with efforts to prevent errors are:
(a) Appraisal costs.
(b) Direct costs.
(c) Prevention costs.
(d) Expected costs.
Question 18
Emerging sociocultrual changes in the environment include:
(a) Changes in the ethnic composition.
(b) The increasing educational attainment of women in the past
decade.
(c) Progressively less disposable income by consumers.
(d) Changes in the geographic distribution of the population.
Question 19

In value chain analysis, the activities of organizations are
divided into two major categories of value activities: primary
and support. Which of the following is a primary activity?
(a) Purchasing key inputs.
(b) Recruiting and training employees.
(c) Repairing the product for the consumer.
(d) Monitoring the cost of producing the product through a cost
accounting system.
Question 20
The balanced scorecard enables managers to consider their
business from all of the following perspectives except:
(a) Customer perspective.
(b) Internal perspective.
(c) Innovation and leering perspective.
(d) Ethical perspective.

Question 21
Imagine your boss wants you to investigate ways your company
might be able enhance customer satisfaction, create an
attractive loyalty program, and reward your customers. Most
likely, your company’s immediate goal is to:
(a) Delight customers.
(b) Make more money.
(c) Enhance product offerings.
(d) Redefine its position.
Question 22
Giant Grocery Retailer tells Small Cereal Manufacturer that it
will not stock or sell Small Cereal Manufacture’s product line
until and unless a better trade margin is provided. What type of
power is Giant Grocery Retailer exhibiting?
(a) Purchasing power.
(b) Information power.

(c) Coercive power.
(d) Distribution power.
Question 23
Company ABC is interested in better understanding how
different groups of customers feel about its product. In order to
this, company ABC will need to :
(a) Position its product in the market.
(b) Segment the market.
(c) Mass market.
(d) Target market.
Question -24
The terms manufacturer , service provider ,government agency,
and wholesaler are designations used to segment business and
organization markets according to:
(a) The type of customer.

(b) Demographics.
(c) Product use.
(d) Buying situations.
Question-25
Which of the following is defined to be an exchange between a
firm and its customers?
(a) Advertising.
(b) Consumer behavior.
(c) Marketing.
(d) Distribution.
Questions:-26
Which is an approach for creating a perceptual map?
(a) Attribute based.

(b) Demography based.
(c) Focus group based.
(d) Survey based.
Question-27
Marketing information should be gathered _________ so the can
be in the know and poised for action.
(a) Quarterly
(b) Annually
(c) Constantly
(d) Every two years
Question-28
There are two major class of franchising. One is business format
franchising. What is the other one?
(a) Market franchising.

(b) Product franchising.
(c) In- house franchising.
(d) Multisite franchising.
Questin-29
Which of the following is not part of Michael porter’s five
forces model?
(a) Industry competitors.
(b) Threat of competition imitation strategies.
(c) Threat of new entrants.
(d) Bargaining power of buyer and suppliers.
Question-30
In order for an exchange to occur (marketing):
(a) A complex societal system must be involved.

(b) Organized marketing activities must also accur.
(c) A profit-oriented organization must be involved.
(d) Each party must have something of value to the other party.
Question-31
At a price above the equilibrium price, there is ______.
(a) A shortage
(b) A surplus
(c) Excess demand
(d) Super –equilibrium
(e) None of the above
Question-32
At a price for which quantity demanded exceeds quantity
supplied ,a __________ is experienced , which pushes the

price______ toward its equilibrium value.
(a) Surplus; downward
(b) Surplus: upward
(c) Shortage: downward
(d) Shortage: upward
Question-33
The minimum wage is an example of a ___________.
(a) Price door
(b) Price wall
(c) Price floor
(d) Price ceiling
Question-34

The supply of product X is perfectly inelastic if the price of X
rises by _________.
(a) 5 percent and quantity supplied rises by 7 percent
(b) 8 percent and quantity supplied rises by 8 percent
(c) 7 percent and quantity supplied rises by 5 percent
(d) 10 percent and quantity supplied remains the same
Question-35
If the purchase and sale of a currently illegal drug such as
marijuana were decriminalized , we would expect _______.
(a) An increase in demand and supply of this drug
(b) An increase in demand and a decrease in supply of this drug
(c) A decrease in demand and an increase in supply of this drug
(d) A decrease in demand and supply of this drug
Question-36

John just bought shares of stock in IBM for $10,000 and paid a
$90 commission to his broker . How did this affect GDP (Gross
domestic Product)?
(a) It had no impact on GDP.
(b) GDP (Gross Domestic Product) increased by $90
(c) GDP (Gross Domestic Product) increased by $10,000
(d) GDP (Gross Domestic Product) increased by $9,990
(e) GDP (Gross Domestic Product ) increased by $10,0903
Question-37
Which one of the following will cause a movement down along
an economy’s consumption schedule?
(a)An increase in stock prices.
(b) A decrease in stock prices.
(c) An increase in consumer indebtedness.

(d) A decrease in disposable income.
Question-38
The largest component of national income is __________.
(a) Rental income
(b) Proprietor’s income
(c) Compensation of employees
(d) Corporate profits
(e) Net interest
Question-39
According to the theory of efficiency wages:
(a) The most profitable firms keep wages low.
(b) Above –equilibrium wages are paid by the firm to increase
worker productivity.

(c) Some occupations are predominantly male and some are
predominantly female.
(d) Differences in human capital explain why firms pay high
wages.
Question-40
If the CPI (Consumer Price Index ) is 170 and nominal income
is $ 75,000, approximately what does real income equal?
(a) $127,500
(b) $74,825
(c) $75,175
(d) $44,118
Question-41
Dexter Hemingway is the CEO and Todd Bradley is the CFO of
Maxwell Inc. Unknowingly, both signed the financial report for
the financial year 2006/07, Which was misleading. Can they be
held liable for punishment?

(a) Under the Sarbanes – Oxley Act, both of them must
reimburse the company.
(b) Under the Sarbanes – Oxley Act, only the CEO will be liable
for punishment.
(c) Under the Racketeer Influenced and Corrupt Organization
Act(RICO) ,both of them are required to reimburse the
company.
(d) Under the Racketeer Influenced and Corrupt Organization
Act(RICO),only the CFO will be liable for punishment.
Question 42
A______ is a public offer to all the shareholders of a
corporation to buy their shares at a stated price.
(a) Leveraged buy out
(b) Tender offer
(c) Target bid
(d) Merger
Question 43

If incorporators cannot show substantial compliance with
statutes regarding incorporation but can show that they were
unaware of any defect and acted in good faith, a court may trat
the entity as a(n)___________.
(a) De jure corporation
(b) Real corporation
(c) De facto corporation
(d) Equitable corporation
Question 44
IF Tosca’s negligence causes Scarpia, who has an especially
weak heart, to die of a heart attack, Scarpia,s surviving
spouse_______.
(a) Will not be able to recover against TOSCA because Scarpia
assumed the risk of harm when he allowed himself to interact
with Tosca, knowing all the while that he had an especially
weak heart.
(b) Will not be able to recover against Tosca if her negligence
would not have caused a heart attack in normal person
(c) Will only be able to recover against Tosca if her behavior

was reckless, not merely negligent
(d) Will generally be able to recover against Tosca.
Question 45
Today, you might be buying from a regulated natural monopoly
when you purchase:
(a) A house, a condominium, or a plot of land.
(b) Natural gas or electricity.
(c) A computer, a phone, or a camera.
(d) A car, a truck, or a bicycle.
Question 46
Under the Equal protection clause,______.
(a) The government must treat like cases alike.
(b) States are prohibited from arbitrarily discriminating against
persons.

(c) States are prohibited from discriminating only on the basis
of nationality.
(d) The government can uphold restrictions on property.
Question 47
A person who shares in the profits of the business but NOT in
its_______ is not a partner.
(a) Management
(b) Losses
(c) control
(d) voting
Question 48
Under rational basis analysis,_________.
(a) A government action will be upheld as long as it has a
reasonable relationship to the achievement of a legitimate
purpose, even if those provisions are foolish.

(b) Discrimination on the basis of a suspect category will
received highest scrutiny
(c) Courts will deem a government action unconditional when
the action impinges on a fundamental right.
(d) Discrimination on the basis of economic interest will receive
highest scrutiny.
Question 49
______ is a process used mainly in the area of public
international law whereby a third party, often a disinterested
government, brings the parties together by establishing
communication and providing a site where the parties can meet,
often in secret.
(a) Public involvement.
(b) Good offices
(c) Local involvement
(d) Best transitions.
Question 50

________ law legal systems primarily rely on case law and
precedents.
(a) Common
(b) Civil
(c) Statutory
(d) Codified
Question 51
A firm changes from Last I n First Out to First In First Out; this
change will be found in the:
(a) The balance sheet.
(b) The income statement.
(c) The statement of cash flows.
(d) Notes to the financial statements.

Question 52
Financial leverage impacts the performance of the firm by:
(a) Increasing the volatility of the firm’s earnings before
interest & taxes.
(b) Decreasing the volatility of the firm’s earnings before
interest & taxes.
(c) Decreasing the volatility of the firm’s net income.
(d) Increasing the volatility of the firm’s net income.
Question 53
In the financial planning model, external funds needed (EFN) is
equal to changes in;
(a) Assets-(liabilities-equity).
(b) Assets-(liabilities + equity).
(c) (Assets+ liabilities-equity).
(d) (Assets + equity-liabilities).

Question 54
Use the following information and horizontal analysis to
compute the percentage increase in sales: Year X sales were
$200,000 and year (X+1) sales were $250,000.
(a) Sales increased by 80%.
(b) Sales increased by 25%
(c) Sales increased by 20%
(d) Sales increased by 125%
Question 55
The counting house Inc., purchased a 5-year property class
equipment for $60,000. The firm uses the MACRS method of
depreciation. What is tax depreciation for the second year of
the asset’s life”?
(a) 12000
(b) 19200
(c) 20000

(d) 24000
Question 56
Which one of the following would not be counted as part of
incremental cash flow?
(a) Opportunity cost.
(b) Sunk cost.
(c) External cost such as brand cannibalism.
(d) External benefit such as acquisition of new technology
which can be applied to other projects.
Question 57
The financial ratio days’ sales in receivables is measured as:
(a) Receivables turnover plus 365 days.
(b) Accounts receivable times 365 days.
(c) Accounts receivable plus sales, divided by 365 days.

(d) 365 days divided by the receivables turnover.
Question 58
The firm’s _______ are primarily interested in ratios that
measure the short-term liquidity of the company and its ability
to make principal and interest payments.
(a) Board of directors
(b) Creditors
(c) Owners
(d) Financial managers
(e) Customers
Question 59
Which one of the following would not be counted after the end
of a project?
(a) Scarp value.

(b) Continuation value.
(c) Release of working capital.
(d) Change in working capital.
Question 60
An increase in which one of the following accounts increases a
firm’s current ratio without affecting its quick ratio?
(a) Accounts payable
(b) Cash
(c) Inventory
(d) Accounts receivable
Question 61
Which structure is usually optimal for project based
organizations with fluctuating workloads?
(a) Functional.

(b) Divisional
(c) Matrix.
(d) Network.
Question 62
The right to self-determination and freedom from the control of
others is called:
(a) Beneficence.
(b) Justice.
(c) Fidelity.
(d) Autonomy.
Question 63
An important activity in _______ is taking corrective action.
(a) Strategy formulation
(b) Strategy evaluation

(c) Strategy manipulation
(d) Strategy implementation
Question 64
For a culture to exist, it must be all of the following
EXCEPT________.
(a) Shared by the vast majority of members.
(b) Be passed from generation to generation.
(c) Shape perceptions, judgments, and feelings.
(d) Be distinct from decisions and behaviors.
Question 65
Advantages of the place design include all of the following
except:
(a) Direct contact with customers in each locale.
(b) Managers in each market become generalists.

(c) Proximity to suppliers.
(d) Proximity to customers.
Question 66
A main force pushing toward a network structure is that an
organizations has_________ core competencies.
(a) Undefined
(b) A few
(c) Interdependent
(d) Independent
Question 67
A flat organizational structure creates a(n)______ span of
control.
(a) Tall
(b) Narrow

(c) Wide
(d) Centralized
Question 68
The term______refers to formal statements specifying
acceptable and unacceptable behaviors and decisions by
employees.
(a) Strategies
(b) Impersonality
(c) Tactics
(d) Rules
Question 69
________ refers to the lack of information regarding what
needs to be done in a role, as well as unpredictability regarding
the consequences of performance in that role.
(a) Time pressure

(b) Daily hassles
(c) Role overload
(d) Role ambiguity
(e) Role conflict
Question 70
The strategy that is based on an organization’s ability to
provide a product or service at a lower cost than its rivals is
referred to as________.
(a) Discount
(b) Differentiation
(c) Focused
(d) Low-cost
Question 71
Paid-in Capital represents:

(a) Earnings retained for use in the business.
(b) The amount invested in the entity by the owners.
(c) Market value of the entity’s common stock.
(d) Net assets of the entity at the date of the statement.
Question 72
At the beginning of the fiscal year, the balance sheet showed
assets of $1,364 and owners equity of $836. During the year,
assets increased $ 74 and liabilities decreased $38. Owner’s
equity at the end of the year totaled:
(a) $836
(b) $872
(c) $948
(d) $1438
Question 73
The number of times interest charges are earned is computed as:

(a) Net income plus interest charges, divided by interest
charges.
(b) Income before income tax plus interest charges, divided by
interest charges.
(c) Net income divided by interest charges.
(d) Income before income tax divided by interest charges.
Question 74
The tendency of the rate earned on stockholders equity to vary
disproportionately from the rate earned on total assets is
sometimes referred to as:
(a) Leverage.
(b) Solvency.
(c) Yield.
(d) Quick assets.
Question 75

Which method of evaluating capital investment proposals uses
present value concepts to compute the rate of return from the
net cash flows expected from capital investment proposals?
(a) Internal rate of return
(b) Cash Payback
(c) Net present value
(d) Average rate of return
Question 76
Statements in which all items are expressed only in relative
terms (percentages of a common bas )are:
(a) Horizontal statements.
(b) Percentage statements
(c) Vertical statements.
(d) Common-size statements.

Question 77
The reason for recoding a prepaid expense as a current asset is:
(a) That the prepaid item will be returned for a cash refund.
(b) That the prepaid item has not yet become an expense.
(c) That the expense has been incurred but not yet paid.
(d) To avoid recognizing an expense so net income will be
higher for the current accounting period.
Question 78
Current generally accepted Accounting Principles and auditing
standards require that financial statements of an entity for the
reporting period to include:
(a) Earnings and gross receipts of cash for the period.
(b) Projected earnings for the subsequent period.
(c) Financial position at the end of the period.
(d) Current market values of all assets at the end of the period.

Question 79
Which of the flowing ratios provides a solvency measure that
shows the margin of safety of note holders or bondholders and
also gives an indication of the potential ability of the business
to borrow additional funds on a long-term basis?
(a) Ratio of fixed assets to long-term liabilities.
(b) Ratio of net sales to assets
(c) Number of days’ sales in receivables
(d) Rate earned on stockholders’ equity
Question 80
Sage, Inc has 20 employees who each earn $ 100 per day and
are paid every Friday. The end of the accounting period is on a
Wednesday.
(a) $2,000
(b) $1,000
(c) $0

(d) $6,000
Question 81
Testing the probability of a relationship between variables
occurring by chance alone if there really was no difference in
the population from which that sample was drawn is knows as:
(a) Multiple regression analysis.
(b) Chi-squared test.
(c) Correlation coefficient.
(d) Significance testing.
Question 82
A Type II error is defined as ________.
(a) Rejecting a true null hypothesis
(b) Rejecting a false null hypothesis
(c) Not rejecting a true null hypothesis

(d) Not rejecting a false null hypothesis
Question 83
The numbers of rooms for 15 homes recently sold were
(mean=7.4):8,8,8,5,9,8,7,6,6,7,7,7,7,9, and 9. What is the
variance?
(a) 1.183
(b) 1.4
(c) 4
(d) 16
(e) 1.96
Question 84
Which of the following is an Excel add-in for simulation?
(a) Precision tree

(b) TopRank
(c) BestFit
(d) @Risk
(e) Riskview
Question 85
ANOVA is:
(a) A government body which collects social statistics.
(b) A two-way analysis variance.
(c) The Name of a statistical software package.
(d) A one-way analysis of variance.
Question 86
Which of the following statements are false?

(a) The modeling process discussed in Data analysis & Decision
making book is a five-step process.
(b) Dealing with uncertainty requires a basis understanding of
probability.
(c) Uncertainty is a key aspect of most business problems.
(d) Data description and data inference are included under data
analysis.
Question 87
In a criminal trial, a type II error is made when__________.
(a) A guilty defendant is acquitted
(b) An innocent person is convicted
(c) A guilty defendant is convicted
(d) An innocent person is acquitted
Question 88
What is the name of the test that is used to assess the
relationship two ordinal variables?

(a) Spearman’s rho.
(b) Phi.
(c) Cramer’s V.
(d) Chi square.
Question 89
Which one of the following would be considered a state of
nature for a business firm?
(a) Inventory levels.
(b) Salaries for employees.
(c) Site for a new plant.
(d) Worker safety laws.
Question 90
The number of miles a truck is divine before it is overhauled is
an examples of a(n)_______variable.

(a) Nominative
(b) Ordinal
(c) Interval
(d) Ratio
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