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Q:
PepsiCo's strategy called "capital performance with a purpose" links green efforts in businesses to the bottom line. This is an example of addressing concerns in the physical segment of the general environment.
a. True
b. False
Q:
Suppliers are powerful when the industry is dominated by a few large companies, no satisfactory substitutes are available, the selling industry is relatively more concentrated than the purchasing industry, or switching costs are high.
a. True
b. False
Q:
Contrary to popular belief, the global segment of the external environment does not provide many opportunities for firms that recently experienced low growth and profits coming from emerging markets.
a. True
b. False
Q:
The objective of assessing the external environment is to determine the timing and importance of the effects of environmental changes and trends on the strategic management of the firm.
a. True
b. False
Q:
The legislation introduced in the U.S. Congress during the early tenure of the Obama administration intended to reduce the amount of work U.S. companies outsource and is an example of a potential change in the sociocultural segment of the general environment.
a. True
b. False
Q:
When firms analyze the external environment, they typically have complete and unambiguous data.
a. True
b. False
Q:
Globalfocusing is often used by firms with high levels of international operations who further increase their internationalization by focusing on global niche markets.
a. True
b. False
Q:
The European sovereign-debt crisis and political upheavals in Egypt, Tunisia, Libya, and Syria illustrate uncertainties in the political/legal segment of the general environment that could affect the performance of business firms.
a. True
b. False
Q:
Monitoring involves the development of a forecast of what might happen at a future point in time.
a. True
b. False
Q:
Exit barriers are especially low in the airline industry because aircraft are not particularly specialized and can easily be sold to other airlines, air cargo companies, the military, or even to wealthy individuals who want to own a private jet.
a. True
b. False
Q:
Early adopters of new technology often achieve higher market shares and higher returns than later adopters of the technology.
a. True
b. False
Q:
Global warming and energy consumption are aspects of the technological environment segment that firms should monitor.
a. True
b. False
Q:
Eavesdropping is an ethical way to obtain information about competitors' actions.
a. True
b. False
Q:
Scanning involves detecting meaning through early signals of environmental trends.
a. True
b. False
Q:
Eavesdropping by the NSA on average Americans is ethical because it is a governmental organization instead of a for-profit company.
a. True
b. False
Q:
An example of a government policy barrier to entry would be a scenario in which the Antitrust Division of the Department of Justice disallows a merger because it creates a firm that is too dominant and would thus create unfair competition.
a. True
b. False
Q:
The process of competitor analysis should examine the competitors' future objectives, current strategy, assumptions, and capabilities.
a. True
b. False
Q:
When Google studies the internet user privacy policies of various nations, it is engaged in the forecasting component of the environmental analysis process.
a. True
b. False
Q:
When Delta Air Lines wants to study Continental Airlines, it must examine both Continental and its complementor, Star Alliance.
a. True
b. False
Q:
Any competitor intelligence practice that is legal is also ethical.
a. True
b. False
Q:
Firms can directly control the elements of the seven segments of the general environment.
a. True
b. False
Q:
Competitor analysis is focused on the factors and conditions influencing an industry's profitability potential.
a. True
b. False
Q:
The more distant strategic groups are in terms of their strategies, the greater the likelihood of rivalry between the groups.
a. True
b. False
Q:
In smaller, new venture firms, returns are sometimes measured in terms of:
a. return on assets.
b. return on equity.
c. return on sales.
d. the amount and speed of growth.
Q:
Developing a political strategy by the newly formed General Motors would likely be ineffective as firms are generally unable to influence the political/legal environment.
a. True
b. False
Q:
According to Hitt, the final responsibility for forming the organization's mission lies with the:
a. CEO.
b. top-management team.
c. employees.
d. organization's stakeholders.
Q:
The bankruptcy filings by General Motors and Chrysler Corporation during the Great Recession illustrate that firms cannot directly control the general environment's segments.
a. True
b. False
Q:
Product market stakeholders include the firm's customers, and the principal concern of this stakeholder group is:
a. maximizing the firm's return on investment.
b. receiving the highest-quality services in the industry at any price.
c. obtaining reliable products at the lowest possible price.
d. increasing the profitability of the firm.
Q:
In recent times, business leaders have become more confident in the ability of economists to provide valid and reliable predictions about the world's economic environment.
a. True
b. False
Q:
______ should establish a firm's individuality and should be inspiring and relevant to all stakeholders.
a. A strategy
b. A vision
c. A mission
d. A goal
Q:
The culmination of the strategic management process is:
a. performance.
b. strategy implementation.
c. strategy formulation.
d. analysis.
Q:
In order to cope with hypercompetition, firms need to develop ______ through continuous learning.
a. competitive resilience
b. strategic flexibility
c. strategic power
d. competitive dominance
Q:
A firm's mission:
a. is a statement of a firm's business in which it intends to compete and the customers it intends to serve.
b. is an internally focused affirmation of the organization's financial, social, and ethical goals.
c. is mainly intended to emotionally inspire employees and other stakeholders.
d. is developed by a firm before the firm develops its vision.
Q:
Before liquidating during a bankruptcy, a company will take several actions to try to satisfy its ______ stakeholders.
a. capital market
b. product market
c. organizational
d. governmental
Q:
______ has become the second-largest economy in the world.
a. The United States
b. The European Union
c. Japan
d. China
Q:
Which of the following statements about organizational knowledge is correct?
a. Knowledge is an intangible resource.
b. The importance of knowledge is increasing.
c. The value of knowledge as a proportion of shareholder value is increasing.
d. All of these options are correct.
Q:
Above-average returns are;
a. higher profits than the firm earned the previous year.
b. higher profits than the industry averaged over the last 10 years.
c. profits in excess of what an investor expects to earn from a historical pattern of performance of the firm.
d. returns in excess of what an investor expects to earn from other investments with a similar level of risk.
Q:
All of the following are assumptions of the industrial organization (I/O) model EXCEPT:
a. organizational decision makers are rational and committed to acting in the firm's best interests.
b. resources to implement strategies are firm-specific and attached to firms over the long-term.
c. the external environment is assumed to impose pressures and constraints that determine the strategies that result in above-average returns.
d. every firm in an industry controls similar strategically relevant resources.
Q:
:A business-level strategy describes
a. the businesses in which the company intends to compete.
b. all policies and procedures used in functional departments.
c. the business unit's actions to exploit its competitive advantage over rivals.
d. a firm's resources, intent, and mission.
Q:
Research shows that approximately ______ percent of a firm's profitability is explained by the industry in which it competes, whereas ______ percent is explained by the firm's characteristics and actions.
a. 90; 10
b. 60; 40
c. 36; 20
d. 20; 36
Q:
The industrial organization (I/O) model argues that:
a. the key factor in success is choosing the correct industry in which to compete.
b. the firm's internal resources and capabilities represent the foundation for development of a value-creating strategy.
c. the key to earning above-average returns is strategic flexibility.
d. the internal structure of the organization must match the industry in which it competes for it to earn above-average returns on investment.
Q:
Effective strategic leaders are chosen based on:
a. their capabilities and accumulation of human capital over time.
b. their single-minded focus on strategy formation.
c. their aptitude for strategy implementation.
d. their focus on innovation.
Q:
A firm has achieved ______ when it successfully formulates and implements a value-creating strategy.
a. strategic competitiveness
b. a permanently sustainable competitive advantage
c. substantial returns
d. legal and ethical core values
Q:
The Chambers of Commerce of cities and towns often implore citizens to buy from local businesses. This is because the organization's role as a taxpayer is most important to ______ as stakeholders.
a. major suppliers of capital
b. shareholders
c. host communities
d. unions
Q:
The firm's ______ provide the foundation for choosing one or more ______ and deciding how to implement them.
a. analyses; strengths
b. abilities; strengths
c. analyses; strategies
d. abilities; strategies
Q:
Refuge Nursing Homes, Inc., (RNH) has been highly profitable in the past 10 years, providing its investors higher returns than those earned by its direct competitors' investors. RNH has a reputation for providing high-paying managerial and hourly-employee jobs. However, recent investigations have revealed that the nursing home residents have been provided substandard care, including non-nutritious and unappetizing meals, non-functional medical equipment, and inadequate patient-care staffing. Which statement best describes the situation?
a. RNH has been earning below-average returns, so it has had to prioritize the demands of its various stakeholders.
b. RNH has prioritized the demands of capital market stakeholders and organizational stakeholders, over the demands of product market stakeholders.
c. RNH has earned above-average returns and so has satisfied the needs of all relevant stakeholders.
d. RNH has been attempting to minimally satisfy the demands of all of its stakeholders.
Q:
Successful strategic leaders are:
a. committed to helping the firm to create value for all stakeholder groups.
b. committed to nurturing those around them.
c. decisive.
d. All of these options are correct.
Q:
A companys ability to acquire knowledge is:
a. less important in the 21st century than in previous periods of business history.
b. an important source of competitive advantage in virtually all industries.
c. not considered an asset or resource for businesses.
d. only important in high technology industries.
Q:
Firms use the five forces model of competition to identify the ______ of the industry. It is measured by its _______.
a. size; number of competitors.
b. globalization; export percentages.
c. hypercompetition; technology diffusion.
d. attractiveness; profitability.
Q:
When resources and capabilities serve as a source of competitive advantage for a firm, the firm has created a(n):
a. strategic mission.
b. inspiring vision.
c. core competence.
d. sustainable market niche.
Q:
The I/O model is grounded in:
a. anthropology.
b. psychology.
c. economics.
d. accounting.
Q:
In a diversified firm, corporate-level strategy is concerned with:
a. operating each individual business under the corporate umbrella.
b. determining how each functional department of the firm will operate.
c. determining in which businesses to compete and how resources will be allocated between businesses.
d. coordinating the vision and mission of each subsidiary firm.
Q:
The "liability of foreignness" is the:
a. inability of most U.S. managers to truly comprehend foreign cultures.
b. political disadvantage that U.S. firms have when doing business abroad.
c. overall risk of participating outside a firm's domestic country when entering global competition.
d. preference for "buying local," which always puts foreign firms at a disadvantage when competing in the U.S. market.
Q:
Knowledge is composed of all the following EXCEPT:
a. insight.
b. expertise.
c. information.
d. intelligence.
Q:
The goal of the organization's ______ is to point the firm in the direction of where it would like to be in the years to come.
a. vision
b. mission
c. culture
d. strategy
Q:
Organizational stakeholders are usually satisfied when
a. their return on investment has been maximized.
b. customers pay the highest sustainable price for the goods and services they receive.
c. companies provide a dynamic, stimulating, and rewarding work environment.
d. companies are paying the highest prices to suppliers.
Q:
Organizational culture refers to:
a. the social energy that drives, or fails to drive, the organization.
b. the complex set of ideologies, symbols, and core values that are shared throughout the firm.
c. what people do when no one else is looking.
d. All of these options are correct.
Q:
A major assumption about the strategic management process is that it is:
a. inspired.
b. team-based.
c. rational.
d. inclusive.
Q:
Organizational stakeholders include:
a. unions.
b. host communities.
c. employees.
d. suppliers of capital.
Q:
Generally speaking, product market stakeholders are satisfied when:
a. a firm achieves a balance between profit margins, costs paid to suppliers and prices set for customers.
b. a firm's profit margin yields an above-average return to its capital market stakeholders.
c. the interests of the firm's organizational stakeholders have been maximized.
d. the interests of all stakeholders have been at least minimally satisfied.
Q:
PGG Mining is making a strategic decision whether to shut down a coal mine in Pennsylvania. It is important to consider that the decision:
a. should be based solely on the results of the CEOs approval of the mines general manager.
b. has ethical implications for organizational stakeholders.
c. need not be socially responsible if the firm is making below-average returns from the mine.
d. All of these choices are important to consider.
Q:
The resource-based model argues that:
a. all resources have the potential to be the basis of sustainable competitive advantage.
b. resources alone can be a source of sustainable competitive advantage.
c. the key to competitive success is the structure of the industry in which the firm competes.
d. resources that are valuable, rare, costly to imitate, and non-substitutable form the basis of a firm's core competencies.
Q:
A ______ is an integrated and coordinated set of commitments and actions designed to exploit core competencies and gain a competitive advantage.
a. goal
b. strategy
c. tactic
d. mission
Q:
SWOT stands for
a. strategy, wealth, organization, and threats.
b. success, weakness, opportunities, and taxes.
c. strength, wealth, organization, and taxes.
d. strengths, weaknesses, opportunities, and threats.
Q:
The interests of an organization's stakeholders often conflict, and the organization must prioritize its stakeholders if it cannot satisfy them all. The ______ is the most critical criterion in prioritizing stakeholders.
a. power of each stakeholder
b. urgency of satisfying each stakeholder
c. vulnerability of organizational stakeholders
d. social value of each stakeholder
Q:
All of the following are resources of an organization EXCEPT:
a. an hourly production employee's ability to catch subtle quality defects in products.
b. oil drilling rights in a promising region.
c. weak competitors in the industry.
d. a charity's board of directors of experienced executives.
Q:
Firms use both the ______ and ______ models. In fact, these models complement each other in that one focuses outside the firm while the other focuses inside the firm.
a. industry; capability
b. I/O; resource-based
c. competition; competency
d. industry; competency
Q:
______ provides the firm with new and up-to-date skill sets, which allow it to adapt to its environment as it encounters changes.
a. Strategic flexibility
b. Continuous learning
c. Knowledge
d. The Internet
Q:
______ is a capacity for a set of resources to perform a task or an activity in an integrative manner.
a. A capability
b. A core competence
c. Sustainable competitive advantage
d. Organizational intelligence
Q:
A company competing in a single product market has
a. one corporate-level strategy.
b. one business-level strategy.
c. one business-level strategy for failure. It should seek to diversify.
d. one business-level strategy and one corporate-level strategy.
Q:
Which of the following statements is most consistent with the I/O view? Performance of a firm is most directly attributable to:
a. the power of the financial market stakeholders.
b. the resources the firm possesses.
c. the profitability of the industry in which the firm competes.
d. hypercompetition within the industry.
Q:
The global economy, globalization, rapid technological change, and the increasing importance of knowledge are creating the need to:
a. delegate strategic responsibilities to employees "closer to the action."
b. split responsibilities between the CEO and the board of directors to minimize the possibility of corporate scandals triggered by unethical CEOs.
c. re-centralize the responsibility for strategy to the CEO.
d. expand the strategic responsibilities to all organizational stakeholders.
Q:
The resource-based view of the firm:
a. emphasizes that it is difficult to develop and sustain a competitive advantage based on resources alone.
b. argues that the industry environment has a stronger influence on firms' ability to implement strategies successfully than does the competitive environment.
c. calls for firms to focus on their homogeneous capabilities to compete against their rivals.
d. suggests that vision and mission are marketing messages not tied to strategic plans.
Q:
Strategic leaders, ______, often work long hours, and their work is filled with ambiguous decision situations.
a. at the top of the organization
b. regardless of their location in the organization
c. in the finance area
d. in the operations area
Q:
In the resource-based model, which of the following factors would be considered a key to organizational success?
a. Unique market niche
b. Weak competition
c. Economies of scale
d. Skilled employees
Q:
A large corporation has earned a reputation for being a challenging work environment for employees, placing demands on employees time and pushing them to accomplish tasks, sometimes with little recognition. A recent audit found that the company was denying employees overtime pay despite the extra work. This is a reflection of the companys:
a. core values of hard work to gain advancement.
b. unethical corporate culture.
c. lack of an organizational mission.
d. search for its core competencies.
Q:
The economic interdependence among countries which is reflected in the flow of goods, services, financial capital, and knowledge across country borders is defined as:
a. hypercompetition.
b. boundaryless retailing.
c. strategic intensity.
d. globalization.
Q:
It is important to emphasize that almost all strategic management process decisions have ______ because they are related to how a firm interacts with its stakeholders.
a. ethical dimensions.
b. local dimensions.
c. political dimensions.
d. global dimensions.
Q:
The strategic leader's work is characterized by:
a. ambiguous decision situations where the best course of action is not always easy to identify.
b. a willingness to unify stakeholders through skillful manipulation.
c. an ability to identify solutions to long-range problems.
d. concentration on the practical day-to-day aspects of the organization's operations.
Q:
All of the following are characteristics of the global economy EXCEPT:
a. the increasing importance of developing countries as sources of revenue growth.
b. the free movement of goods, services, people, skills, and ideas across geographic borders.
c. the increased use of tariffs to protect industries.
d. higher levels of opportunities and challenges in new geographic markets.