Text: Authors: Publisher: Strategic Management: Concepts and Cases 12th edition, 2009 ISBN: 13: 9780136015703 Fred R. David Pearson Education 925 N. Spurgeon Street, Santa Ana, CA 92701 Phone: 714-547-9625 Fax: 714-547-5777 12/14 BAM560 Strategic Management F in a l E x a m in a ti o n All rights reserved. No part of this book may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording or by any information storage and retrieval system without written permission from the publisher, except for the inclusion of brief quotation in review. Copyright © 2014 by California Coast University Final Examination Strategic Management 1 Multiple Choice Questions (Enter your answers on the enclosed answer sheet) 1) During what stage of strategic management are a firm’s specific internal strengths and weaknesses determined? A) Feedback B) Implementation C) Goal-setting D) Formulation E) Evaluation 2) What step in the strategic development process involves mobilizing employ- ees and managers to put strategies into action? A) Implementing strategy B) Formulating strategy C) Strategy evaluation D) Competitive advantage E) Strategic advantage 3) Which phase of strategic management is called the action phase? A) Strategy implementation B) Strategy formulation C) Allocating resources D) Strategy evaluation E) Measuring performance 4) ________ is not a strategy-implementation activity. A) Devising policies B) Establishing annual objectives C) Taking corrective actions D) Motivating employees E) Allocating resources 5) ________ and ________ are external forces transforming business and society today. A) Corporate culture; stakeholders B) Stakeholders; strategy C) E-commerce; strategy D) E-commerce; globalization E) Strategy; globalization 2 Final Examination Strategic Management 6) In December 2006, online sales in the U.S. rose by A) 150 percent. B) 10 percent. C) 100 percent. D) 25 percent. E) 50 percent. 7) The one factor that has most significantly impacted the nature and core of buying and selling in nearly all industries has been A) corporate greed. B) customer and employee focus. C) the government. D) the Internet. E) political borders. 8) Specific results an organization seeks to achieve in pursuing its basic mission are A) rules. B) mission. C) policies. D) objectives. E) strategies. 9) In which phase of strategic management are annual objectives especially important? A) Implementation B) Control C) Evaluation D) Formulation E) Management 10) What are guides to decision making? A) Laws B) Procedures C) Goals D) Rules E) Policies Final Examination Strategic Management 3 11) The changes that occurred when ...

1. Text:
Authors:
Publisher:
Strategic Management: Concepts and Cases
12th edition, 2009
ISBN: 13: 9780136015703
Fred R. David
Pearson Education
925 N. Spurgeon Street, Santa Ana, CA 92701 Phone: 714-
547-9625 Fax: 714-547-5777
12/14
BAM560
Strategic Management
F
in
a
l
E
x
a

2. m
in
a
ti
o
n
All rights reserved. No part of this book may be reproduced or
transmitted
in any form or by any means, electronic or mechanical,
including photocopying,
recording or by any information storage and retrieval system
without written
permission from the publisher, except for the inclusion of brief
quotation
in review.
Copyright © 2014 by California Coast University
Final Examination
Strategic Management
1

3. Multiple Choice Questions (Enter your answers on the enclosed
answer sheet)
1) During what stage of strategic management are a firm’s
specific internal
strengths and weaknesses determined?
A) Feedback
B) Implementation
C) Goal-setting
D) Formulation
E) Evaluation
2) What step in the strategic development process involves
mobilizing employ-
ees and managers to put strategies into action?
A) Implementing strategy
B) Formulating strategy
C) Strategy evaluation
D) Competitive advantage
E) Strategic advantage
3) Which phase of strategic management is called the action
phase?
A) Strategy implementation
B) Strategy formulation
C) Allocating resources
D) Strategy evaluation
E) Measuring performance
4) ________ is not a strategy-implementation activity.
A) Devising policies
B) Establishing annual objectives

4. C) Taking corrective actions
D) Motivating employees
E) Allocating resources
5) ________ and ________ are external forces transforming
business and society
today.
A) Corporate culture; stakeholders
B) Stakeholders; strategy
C) E-commerce; strategy
D) E-commerce; globalization
E) Strategy; globalization
2
Final Examination
Strategic Management
6) In December 2006, online sales in the U.S. rose by
A) 150 percent.
B) 10 percent.
C) 100 percent.
D) 25 percent.
E) 50 percent.
7) The one factor that has most significantly impacted the
nature and core of
buying and selling in nearly all industries has been
A) corporate greed.
B) customer and employee focus.

5. C) the government.
D) the Internet.
E) political borders.
8) Specific results an organization seeks to achieve in
pursuing its basic mission
are
A) rules.
B) mission.
C) policies.
D) objectives.
E) strategies.
9) In which phase of strategic management are annual
objectives especially
important?
A) Implementation
B) Control
C) Evaluation
D) Formulation
E) Management
10) What are guides to decision making?
A) Laws
B) Procedures
C) Goals
D) Rules
E) Policies
Final Examination

6. Strategic Management
3
11) The changes that occurred when Robert Iger took over the
reigns at Disney,
demonstrate which current trend in organizations?
A) Increased emphasis on strategic planning
B) Increased structuring of strategic management
C) Increased decentralizing of strategic management
D) Increased formalization of the strategic management
process
E) Increased central planning of the strategic management
process
12) According to research, organizations using strategic
management are
________ than those that do not.
A) more complex
B) more profitable
C) less profitable
D) less complex
E) less static
13) According to Greenley, strategic management offers all of
these benefits
except that
A) it provides an objective view of management problems.
B) it encourages a favorable attitude toward change.
C) it maximizes the effects of adverse conditions and changes.
D) it creates a framework for internal communication among
personnel.
E) it gives a degree of discipline and formality to the

7. management of a business.
14) What is not a reason given for poor or no strategic planning
in organizations?
A) Fire-fighting
B) Trust of management
C) Poor reward structure
D) Wasting of time
E) Being content with success
15) Principles of conduct that guide decision-making are known
as
A) social responsibility requirements.
B) business ethics.
C) human rights.
D) nonprofit organization policies.
E) the Constitution.
4
Final Examination
Strategic Management
16) Ethical standards come out of ________ in a final analysis.
A) history and heritage
B) competitors
C) community involvement
D) stakeholder analysis
E) government

8. 17) All of these are potential disadvantages of an international
operation except
A) reduced tariffs and taxes.
B) complexity due to a multiple monetary system.
C) overestimated weaknesses and underestimated strengths of
competitors.
D) differing languages, cultures and value systems.
E) all of these are potential disadvantages.
18) Which of these basic questions should a vision statement
answer?
A) Who are our competitors?
B) What is our business?
C) Who are our employees?
D) What do we want to become?
E) Why do we exist?
19) Who is referred to as “the father of modern management?”
A) Smith
B) Deming
C) Drucker
D) Peters
E) McGinnis
20) The mission statement answers which question?
A) How can we improve ourselves?
B) What do we want to become?
C) Who are our stakeholders?
D) What is our business?
E) How can we increase profitability?

9. Final Examination
Strategic Management
5
21) The vision statement answers which question?
A) Who are our stakeholders?
B) What do we want to become?
C) What is our business?
D) How can we increase profitability?
E) How can we improve ourselves?
22) In the process of developing a mission statement, it is
important to involve
A) the board of directors only.
B) upper-level management only.
C) as few managers as possible.
D) as many managers as possible.
E) lower-level management only.
23) What can be used to promote unbiased views and to manage
the development
of the mission statement more effectively?
A) An internal group
B) Surveys
C) Command-and-control
D) A committee of managers
E) A facilitator
24) Business Week reports that firms using mission statements
have ________

10. percent higher return on certain financial measures than
those without such
statements.
A) 15
B) 57
C) 54
D) 10
E) 30
25) All stakeholders
A) have environmental concerns as their top priority.
B) have the same claims and concerns about an organization.
C) have ownership rights in an organization.
D) have the same voting rights in an organization.
E) have claims and concerns about an organization, but these
claims and con-
cerns vary.
6
Final Examination
Strategic Management
26) The three characteristics of a mission statement are a
declaration of attitude,
a declaration of social policy and
A) a profit orientation.
B) an employee orientation.
C) a customer orientation.
D) a shareholder orientation.

11. E) an environmental orientation.
27) A proactive environmental policy is likely to lead to
A) numerous liability suits.
B) reduced customer loyalty.
C) conservation of energy.
D) higher medical costs.
E) higher cleanup costs.
28) What happened to sales of big-rig trucks as a result of new
federal regulations
on emissions?
A) Production increased by 40 percent
B) Production decreased by 40 percent
C) The change had no impact on production
D) Production increased by 50 percent
E) Production decreased by 50 percent
29) The corporate social policy should be reaffirmed or changed
during which
phase of strategy development?
A) Strategy evaluation
B) Strategy formulation
C) Strategy implementation
D) Strategic mission
E) Strategy control
30) Which of the following dimensions are not recommended
aspects of a mission
statement?
A) Customers
B) Concern for employees

12. C) Markets
D) Self-concept
E) Strategies
Final Examination
Strategic Management
7
31) Effective mission statements
A) become ineffective in the first year.
B) never require revision.
C) are usually changed every few years.
D) stand the test of time and require little revision.
E) are usually changed every few months.
32) The process of performing an external audit needs to
include
A) only top level managers, as it’s a planning function.
B) stockholders and external government agencies
C) between 15 to 20 managers for it to be valid
D) primarily front-line supervisors
E) as many managers and employees as possible.
33) What effect do trends in the dollar’s value have on
companies in different
industries and in different locations?
A) Insignificant and unequal
B) No significant impact
C) Marginal and equal

13. D) Significant and unequal
E) Significant and equal
34) In general, what happens to American goods in overseas
markets when there
is a strong dollar?
A) Cheaper
B) More attractive
C) More expensive
D) Less expensive
E) Desirable
35) When an industry relies heavily on government contracts,
which forecasts can
be the most important part of an external audit?
A) Competitive
B) Economic
C) Multinational
D) Political
E) Technological
8
Final Examination
Strategic Management
36) Who is Japan’s largest trading partner?
A) China
B) Mexico
C) Germany

14. D) U.S.
E) U.K.
37) Technological advancements can create new ________
advantages that are
more powerful than existing advantages.
A) economic
B) social
C) competitive
D) comparative
E) environmental
38) Which sector of the economy would be most impacted by
technological devel-
opments?
A) Paper
B) Forestry
C) Textiles
D) Metals
E) Pharmaceuticals
39) Keeping strategies secret from employees and stakeholders
can do all of the
following except
A) inhibit employee and stakeholder commitment.
B) forego valuable employee or stakeholder input.
C) provide competitive advantage to competitors.
D) inhibit employee and stakeholder communication.
E) inhibit employee and stakeholder understanding.
40) Intensity of competition ________ in lower-return
industries.

15. A) is lowest
B) is not important
C) is highest
D) is non-existent
E) fluctuates
Final Examination
Strategic Management
9
41) Whenever new firms can easily enter a particular industry,
the intensity of
competitiveness among firms
A) decreases.
B) increases.
C) fluctuates.
D) neutralizes.
E) stays the same.
42) What level of bargaining power do consumers have when
the products being
purchased are standard or undifferentiated?
A) Marginal
B) High
C) Negative
D) Low
E) Not necessary
43) Because of the Internet, barriers to personal and business
success are

16. A) acting like glass walls.
B) being eliminated.
C) lower.
D) significantly enhanced.
E) being built.
44) The international challenge faced by U.S. business is
twofold
A) how to gain and maintain exports to other nations and how
to defend domes-
tic markets against imported goods.
B) how to gain exports to other nations and enhance market
share for imported
goods in domestic markets.
C) how to increase exports to other countries and how to
increase imports from
other countries.
D) how to defend domestic markets against imported goods
while minimizing
exports.
E) how to enhance imported goods in domestic markets and
minimize exports to
other nations.
45) ________ exemplifies the complexity of relationships
among the functional
areas of business.
A) Financial ratio analysis
B) Environmental scanning
C) External audit
D) Government audit
E) Distribution strategy

17. 10
Final Examination
Strategic Management
46) Which function of management includes all of those
activities undertaken to
ensure actual operations conform to planned operations?
A) Controlling
B) Staffing
C) Planning
D) Motivating
E) Organizing
47) The first step in the controlling function of management is
to
A) take corrective actions.
B) establish performance standards.
C) restrict breaks employees take.
D) measure individual and organizational performance.
E) evaluate expense reports.
48) Opportunity analysis is one of the basic functions of
A) computer information systems.
B) production/operations.
C) management.
D) marketing.
E) research and development.
49) ________ is not considered to be a function of marketing.

18. A) Market segmentation
B) Distribution
C) Marketing research
D) Customer analysis
E) Opportunity analysis
50) The Robinson-Patman Act affects a company’s
A) culture.
B) employee costs.
C) cost of products.
D) pricing methods.
E) trucking methods.
Final Examination
Strategic Management
11
51) What category of ratios measures a firm’s ability to meet
maturing short-term
obligations?
A) Leverage
B) Activity
C) Profitability
D) Growth
E) Liquidity
52) According to Roger Schroeder, which of the following is
not a basic function
of production management?

19. A) Transportation
B) Inventory
C) Capacity
D) Workforce
E) Quality
53) Which country has the highest average hourly pay for auto
workers?
A) Japan
B) Germany
C) Canada
D) France
E) U.S.
54) ________ has been successful in determining R&D budget
allocations.
A) Financing as many project proposals as possible
B) Budgeting for R&D about what competitors spend
C) Using the percentage of sales method
D) Deciding how many successful new products are needed
E) All of the above have been used
55) Which of the following ties all business functions together
and provides the
basis for all managerial decisions?
A) Marketing
B) Management
C) Workforce
D) Information
E) Technology

20. 12
Final Examination
Strategic Management
56) Which of the following is the first step in developing an IFE
Matrix?
A) Identifying the organization’s functions of business
B) Summing the weighted scores for each variable
C) Identifying the organization’s strengths and weaknesses
D) Determining the lead strategist
E) Determining the organization’s structure
57) The IFE Matrix should be ________ in multidivisional
firms.
A) all-inclusive
B) constructed only for the major divisions
C) revised monthly
D) constructed for each division
E) developed before the EFE Matrix
58) Which of these strategies is effective when the number of
suppliers is small
and the number of competitors is large?
A) Conglomerate diversification
B) Forward integration
C) Backward integration
D) Concentric diversification
E) Horizontal diversification
59) Which strategy seeks to increase market share of present

21. products or services
in present markets through greater marketing efforts?
A) Backward integration
B) Market penetration
C) Forward integration
D) Market development
E) Product development
60) All of the following situations are conducive to market
development except
A) when an organization competes in a high-growth industry.
B) when new untapped or unsaturated markets exist.
C) when an organization is very successful at what it does.
D) when an organization’s basic industry is becoming rapidly
global in scope.
E) when an organization has excess production capacity.
Final Examination
Strategic Management
13
61) Which strategy should an organization use if it competes in
a no-growth or a
slow-growth industry?
A) Backward integration
B) Retrenchment
C) Unrelated diversification
D) Related diversification
E) Divestiture

22. 62) Which of the following is not an example of when an
organization should use
an unrelated diversification strategy?
A) When revenues derived from an organization’s current
products or services
would increase significantly by adding the new unrelated,
products.
B) When the new products have counter-cyclical sales patterns
compared to an
organization’s present products.
C) When an organization competes in a highly competitive
and/or a no-growth
industry.
D) When an organization’s present channels of distribution
can be used to mar-
ket the new products to current customers.
E) When the organization has a strong management team.
63) Which chapter of the bankruptcy code applies to
municipalities?
A) Chapter 9
B) Chapter 12
C) Chapter 8
D) Chapter 13
E) Chapter 7
64) The Family Farmer Bankruptcy Act of 1986 created
A) Chapter 13.
B) Chapter 9.
C) Chapter 8.
D) Chapter 7.
E) Chapter 12.

23. 65) Under which strategy would you offer products or services
to a wide range of
customers at the lowest price available on the market?
A) Low-cost
B) Differentiation
C) Best-value
D) Low-cost focus
E) Best-value focus
14
Final Examination
Strategic Management
66) Under which condition would a differentiation strategy be
especially effec-
tive?
A) When the industry has many different niches and segments,
thereby allowing
a company to pick a competitively attractive niche suited to
its own resourc-
es.
B) When technological change is fast paced and competition
revolves around
rapidly evolving product features.
C) When few, if any, other rivals are attempting to specialize
in the same target
segment.
D) When industry leaders do not consider the niche to be
crucial to their own

24. success.
E) When the target market niche is large, profitable and
growing
67) Which of the following is not a reason joint ventures fail?
A) The venture may benefit the partnering companies but may
not benefit the
customers who then complain about poorer service or
criticize the companies
in other ways.
B) The venture may begin to compete more with one of the
partners than the
other.
C) Stakeholders from both partners are equally satisfied.
D) Managers who must collaborate daily in operating the
venture are not in-
volved in forming or shaping the venture.
E) The venture may not be supported equally by both partners.
68) What was the largest acquisition completed in 2007?
A) CVS acquiring Caremark Rx
B) AT&T acquiring BellSouth Corp
C) Linde acquiring BOC Group
D) Johnson & Johnson acquiring Pjizen Consumer Healthcare
E) Porsche acquiring Volkswagon
69) Which section of the SWOT Matrix involves matching
internal strengths with
external opportunities?
A) The ST cell
B) The WT cell
C) The WO cell
D) The SW cell

25. E) The SO cell
70) Which strategies aim at improving internal weaknesses by
taking advantage of
external opportunities?
Final Examination
Strategic Management
15
A) ST
B) WO
C) SO
D) WT
E) SW
71) How many cells are in a SWOT Matrix?
A) Eight
B) Nine
C) Two
D) Four
E) Six
72) Which of the following is not a step of a SWOT Matrix?
A) Match strengths with external opportunities and record the
resultant SO strat-
egies in the appropriate cell.
B) List the firm’s key external threats.

26. C) Match internal weaknesses with external threats and record
the resultant WT
strategies.
D) List the firm’s external opportunities.
E) List the firm’s external weaknesses.
73) Which of these is not a SPACE Matrix quadrant?
A) Aggressive
B) Defensive
C) Conservative
D) Competitive
E) Offensive
74) In the SPACE analysis, what does a (+6, +3) strategy profile
portray?
A) A strong industry
B) A stable environment
C) A weak industry
D) An unstable environment
E) A weak financial position
75) For what type of company is the BCG Matrix ideal for
analyzing?
A) All companies
B) Large companies
C) Companies with more than one division
16
Final Examination

27. Strategic Management
D) Companies with annual sales of less than $1 million
E) Companies with annual sales greater than $1 million
76) An organization that has a low relative market share
position and competes in
a slow-growth industry is referred to as a
A) dog.
B) star.
C) question mark.
D) cowboy.
E) cash cow.
77) According to the Grand Strategy Matrix, organizations in
which .quadrant
have a strong competitive position but are in a slow-growth
industry,
A) IV.
B) I.
D) V.
E) III.
78) The top row of a QSPM consists of alternative strategies
derived from all of
these except
A) BCG Matrix.
B) CPM Matrix.
C) Space Matrix.
D) Grand Strategy Matrix.
E) IE Matrix.
79) How are objectives in the areas of profitability, growth and

28. market share com-
monly established?
A) Geographic location
B) Customer groups
C) Business segment
D) Product
E) all of the above
80) _______ is not a major factor that commonly prohibits
effective resource al-
location.
A) Underprotection of resources
B) Lack of sufficient knowledge
C) Vague strategy targets
D) Reluctance to take risks
E) Organizational politics
Final Examination
Strategic Management
17
81) Which approach for managing and resolving conflict
involves exchanging
members of conflicting parties of that each can gain an
appreciation of the
others point of view?
A) Resistance
B) Confrontation
C) Defusion

29. D) Avoidance
E) Compliance
82) Which approach for managing and resolving conflict
involves playing down
differences between conflicting parties while accentuating
similarities and
common interests?
A) Defusion
B) Resistance
C) Compliance
D) Avoidance
E) Confrontation
83) Why do changes in company strategy often require changes
in the way an
organization is structured?
A) Structure dictates how resources will be obtained.
B) Structure dictates strategy.
C) Structure dictates how goals and objectives will be
established.
D) Structure dictates how money is spent.
E) Structure dictates authority over projects.
84) What percentage of companies are reported to have some
form of bonus plan?
A) 40 percent
B) 95 percent
C) 80 percent
D) 75 percent
E) 25 percent
85) Resistance to change can manifest itself through

30. A) filing unfounded grievances.
B) sabotaging production machines.
C) unwillingness to cooperate.
D) absenteeism.
E) all of the above
18
Final Examination
Strategic Management
86) Which strategy could be best defined as an effective, multi-
method technique
of studying and altering a firm’s culture?
A) Delivering
B) Benchmarking
C) Educative change strategy
D) Triangulation
E) Process management
87) What percent of strategies formulated are successfully
implemented?
A) Approximately 66 percent
B) Less than 10 percent
C) Between 40 to 60 percent
D) About 30 percent
E) More than 80 percent
88) Why is market segmentation an important variable in the
strategy-implemen-

31. tation process?
A) Company strategies do not require increased sales through
new markets and
products.
B) It allows a firm to minimize per-unit profits and per-
segment sales.
C) It directly affects marketing mix variables.
D) It allows a firm to operate with no resources.
E) all of the above
89) Which of the following is (are) true about two different
market segments?
A) They are most effective when a firm squats between two
segments.
B) They are always in different geographic locations.
C) They are usually incompatible.
D) They usually require different marketing strategies.
E) They can usually be served with the same marketing
strategy.
90) What is a central strategy-implementation technique that
allows an organiza-
tion to examine the expected results of various actions and
approaches?
A) Financial budgeting
B) EPS/EBIT
C) External analysis
D) TOWS analysis
E) Projected financial statement analysis
Final Examination

32. Strategic Management
19
91) Which of these is the most common type of budgeting time
frame?
A) Annual
B) Monthly
C) Daily
D) Every decade
E) Quarterly
92) What is a limitation of using financial budgets?
A) They are sometimes used as instruments of tyranny.
B) They can become a substitute for objectives.
C) They can hide inefficiencies if done only on precedent.
D) They can be so detailed that they are cumbersome and
expensive.
E) all of the above
93) What best describes how much a company is worth?
A) Static
B) Known only to the firm’s accountants
C) Explicit accounting standards
D) An exact science
E) An educated guess
94) What is the best definition of goodwill?
A) Value associated with benefits from environmental
programs
B) Excess of current assets over liabilities

33. C) Value attached to the firms reputation
D) Premiums paid for acquisition
E) Excess of assets over liabilities
95) If success for one organizational department means failure
for another de-
partment, then strategies may be
A) advantageous.
B) failures.
C) synergistic.
D) inconsistent.
E) inconsonant
96) Corrective actions are not needed when
A) changes have occurred in the firm’s internal strategic
position.
B) the industry is slowing down.
20
Final Examination
Strategic Management
C) the firm is not progressing satisfactorily toward achieving
stated objectives.
D) external and internal factors have not significantly
changed.
E) competitive factors are on the rise.
97) What is the basis for quantitative financial evaluation?

34. A) Financial ratios
B) Reduction in costs
C) The EPS/EBIT Analysis
D) Present value analysis
E) Capital Asset Pricing Model
98) Corrective action should do all of the following except
A) improve internal weaknesses.
B) avoid external threats.
C) capitalize upon internal strengths.
D) strengthen an organization’s competitive position.
E) avoid external opportunities.
99) What aims to balance long term with short term concerns,
financial with non-
financial concerns, and internal with external concerns?
A) Contingency planning
B) Measuring performance
C) reviewing Bases of Strategy
D) The Balanced Scorecard approach
E) Taking corrective action
100) Which type of auditors are specifically responsible for
safeguarding the as-
sets of a company?
A) Research auditors
B) Government auditors
C) External auditors
D) Independent auditors
E) Internal auditors