MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Top-down planning that emphasizes formal strategy formulation and leaves the implementation issues to lower management levels is known as 1) _______ A) basic financial planning. B) strategic management. C) forecast-based planning. D) externally-oriented planning. E) none of the above 2) Which of the following is NOT one the four triggering events listed in the text that are the stimulus for a strategic change? 2) _______ A) new CEO B) threat of a takeover C) intervention by the organization's bank D) awareness by management of decreased profitability E) annual strategic planning conference 3) The ability of an organization to reshape its environment is described by 3) _______ A) organizational citizenship theory. B) organizational learning theory. C) theory institution. D) the strategic choice perspective. E) population ecology theory. 4) FedEx stipulates specific employee behavior including how a driver dresses to how keys are held when approaching a customer's door. This is an example of a 4) _______ A) policy. B) program. C) budget. D) procedure E) control. 5) All of the following reflect activities of a learning organization EXCEPT 5) _______ A) transferring knowledge quickly and efficiently throughout the organization. B) learning from its own experiences and past history. C) experimenting with new approaches. D) alienating competitors in the industry. E) solving problems systematically. 6) The mode of strategic decision-making typical of most universities, many large hospitals, a large number of governmental agencies, and a surprising number of large corporations is 6) _______ A) entrepreneurial. B) logical incrementalism. C) planning. D) adaptive. E) none of the above 7) Which of the following provides an example of the characteristics of a transformation leader? 7) _______ A) Microsoft CEO, Steve Ballmer, crawled under tables to plug in PC monitors and diagnosed problems with an operating system. B) Phil Knight at Nike has energized his corporation and commanded respect. C) Verizon Communications CEO Ivan Seidenberg showed his faith in his people by letting his key managers handle important projects and represent the company in public forums. D) Louis Gerstner proposed a new vision for IBM to change its business model from computer hardware to services. E) All of the above. 8) Outside directors are defined as 8) _______ A) those individuals who scan the external environment. B) individuals who organize and coordinate politically focused activities. C) those individuals with public relations responsibilities. D) board members who are also officers or executives employed by the corporation. E) individuals on the board who are not employed by the board's corporation. 9) Under what circumstances does a DIRECT interlocking directorate exist? 9) _______ A) When both management and the board establish corporate strategic management. B) When two corporations have directors who serve on the board of a third firm. C) When a corporation's employees are included on its board. D) Occurs when one or more individuals on one board also serve on a board of a second firm. E) When all board members are also employed by the corporation. 10) The vast majority of inside directors are from all of the following EXCEPT: 10) ______ A) vice-president of operational units. B) vice-president of functional units. C) chief executive officer. D) president of the corporation. E) lower-level operating employee. 11) In implementing the Sarbanes-Oxley Act, the SEC required in 2003 that a company disclose 11) ______ A) the CFO's pay. B) if it has adopted a code of ethics that applied to the CEO and the CFO. C) the number of insiders on their PR committee. D) the CEO's pay. E) all of the above 12) Which of the following is NOT descriptive of interlocking directorates? 12) ______ A) Interlocking directorates are more common in small, family-owned companies. B) Interlocking directorates occur in about 20% of the 1000 largest US firms. C) Interlocking directorates are a useful method for gaining inside information about an uncertain environment. D) Interlocking directorates occur because large firms have a large impact on other corporations. E) Interlocking directorates provide objective expertise about a firm's strategy. 13) Ethics is defined as 13) ______ A) consensually accepted standards of behavior for an occupation, trade, or profession. B) imposing one's morality upon another. C) a general rule of conduct of personal behavior, based on religious or philosophical grounds. D) voluntary obligations assumed by an individual or organization. E) formal codes that permit or forbid certain behaviors. 14) All of the following reasons provide rationale for unethical behavior EXCEPT 14) ______ A) agreement among stakeholders and business people about what is ethical. B) the impact of cultural norms and values. C) ambiguous rules. D) difficulty of one group to understand another's actions. E) differences in values between business people and key stakeholders. 15) All of the following are considered primary stakeholders EXCEPT 15) ______ A) governments. B) creditors. C) shareholders. D) customers. E) employees. 16) A code of ethics was important for two reasons. The first reason is that it clarifies company expectations of employee conduct in various situations, and the second reason is 16) ______ A) that it minimizes the possibility of mandatory regulations. B) to reduce the burden on the judicial system. C) that it makes clear that the company expects its people to recognize the ethical dimensions in decision and actions. D) that it encourages individuals to strive for good citizenship and corporations to contribute positively to society. E) to promote a high level of societal norms. 17) Which approach to ethical behavior can encourage selfish behavior when a person defines a personal need or want as a "right"? 17) ______ A) categorical imperative B) individual rights C) moral relativism D) utilitarian E) justice approach 18) Which of the following is NOT descriptive of external environmental scanning? 18) ______ A) Used to monitor, evaluate, and disseminate information from the external environment to key people within the corporation. B) Used to identify strengths and weaknesses. C) Used to identify opportunities and threats. D) It is a tool that corporations use to avoid strategic surprise. E) Used as a tool to ensure a corporation's long-term health. 19) The issues priority matrix used in environmental scanning is composed of two axis or dimensions which are labeled 19) ______ A) industry growth rate and probable competitive position. B) probability of occurrence and probable impact on the corporation. C) importance to the industry and likelihood of occurrence. D) issue importance and relative power of stakeholder groups. E) probable industry attractiveness and business strength/competitive position. 20) What are the key environmental trends that are judged to have a medium to high probability of occurrence and a medium to high probability of impact on the corporation? 20) ______ A) scenarios B) historical concerns C) industry forces D) external strategic factors E) strategic issues 21) Which of the following is true in regards to competitive intelligence? 21) ______ A) The Economic Espionage Act makes it illegal to steal any material that a business has taken "reasonable efforts" to keep secret. B) The Society of Competitive Intelligence Professionals urges strategists to stay within the law and to act ethically when searching for information. C) A number of firms hire consultants with questionable reputations who do what is necessary to get information when the selected methods do not meet SPIC ethical standards or are illegal. D) The Society of Competitive Intelligence Professionals states that illegal activities are foolish because the vast majority of worthwhile competitive intelligence is available publicly via annual reports, web sites, and libraries. E) all of the above 22) One ground rule necessary for effective brainstorming is 22) ______ A) calculating future earnings of each idea. B) critique each idea for rationality. C) propose ideas without mentally screening them. D) forecast the success of each idea. E) scrutinize each idea generated. 23) A forecasting technique using quantitative measures that attempt to discover causal or at least explanatory factors that link two or more time series together is called 23) ______ A) morphological analysis. B) statistical modeling. C) the delphi technique. D) trend extrapolation. E) trend-impact analysis. 24) Through market research, corporations can target their various products or services so that management can discover what niches to seek or develop, and how to minimize competitive pressure. This is descriptive of 24) ______ A) product life cycle. B) marketing position. C) market segmentation. D) marketing leverage. E) marketing mix. 25) The ratio of total debt to total assets is known as 25) ______ A) capital finance. B) budgeting leverage. C) capital budgeting. D) financial budgeting. E) financial leverage. 26) Which of the following statements is true concerning a corporate reputation? 26) ______ A) There is a positive relationship between corporate reputation and financial performance. B) It is a widely held perception of a company by the general public. C) A good corporate reputation can be a strategic resource. D) Reputation tends to be long-lasting and hard for others to duplicate. E) all of the above 27) Which of the following is NOT a responsibility of a research and development manager? 27) ______ A) Developing methods of embodying the new technology in new products and processes. B) Deploying resources so that the new technology can be successfully implemented. C) Suggesting and implementing a corporation's technological strategy in light of its corporate objectives and policies. D) Choosing among alternative new technologies to use within the corporation. E) Taking the design and operationalizing the plan into mass production. 28) The process of taking a new technology from the laboratory to the marketplace is called 28) ______ A) the R & D mix. B) technological competence. C) technological discontinuity. D) economies of scope versus operating leverage. E) technology transfer. 29) Which one of the following is NOT one of the four methods to improve the corporation's quality of work life? 29) ______ A) More responsive management B) Restructuring work C) Introduce innovative reward systems D) Introduce participative problem-solving E) Improve the work environment 30) Which of the following is true of defensive tactics? 30) ______ A) Defensive tactics divert attacks to less threatening avenues. B) Defensive tactics lessen the intensity of an attack. C) Defensive tactics reduce short-term profitability to ensure long-term profitability. D) Defensive tactics aim to lower the probability of attack. E) all of the above 31) The concept that advocates management's attempt to find a strategic fit between external opportunities and internal strengths while working around external threats and internal weaknesses is called 31) ______ A) situational analysis. B) strategic evaluation. C) objective analysis. D) position analysis. E) environmental analysis. 32) Which offensive tactic proposes an indirect approach against the established competitor such as changing the rules of the game? 32) ______ A) flanking maneuver B) frontal assault C) bypass attack D) guerilla warfare E) encirclement 33) When a company following a differentiation strategy ensures that the higher price it charges for its higher quality is not priced too far above the price of the competition, the company is using the process of 33) ______ A) price fixing. B) low-cost differentiation. C) cost leadership. D) cost proximity. E) basic differentiation. 34) According to Porter, the term that applies to the breadth of a company's or business unit's target market is called 34) ______ A) diversification. B) concentration. C) differentiation. D) lower cost. E) competitive scope. 35) In many cases, ________ integration is more profitable than ________ integration. 35) ______ A) backward; vertical B) vertical; backward C) mass; forward D) backward; forward E) forward; backward 36) The stability strategy is appropriate for all of the following circumstances EXCEPT 36) ______ A) popular with small business owners who have found a niche and are happy with their success. B) most appropriate for reasonably successful corporations in a reasonably predictable environment. C) appropriate when the industry is in decline. D) useful in the short-run but can be dangerous if followed too long. E) appropriate when the industry is facing modest or no-growth potential. 37) One benefit of a U.S. company entering a joint venture with an international firm is that it 37) ______ A) enhances the policy of the host country's takeover of the firm. B) promotes skepticism among other countries not involved in the merger. C) encourages competitors to work with the company. D) reduces the risks of expropriation. E) increases revenues by 20%. 38) A firm's expansion into other geographic locations and/or increasing the range of products and services offered to current markets is called 38) ______ A) horizontal growth. B) forward vertical growth. C) backward vertical growth. D) captive company strategy. E) diversification. 39) An MNC uses which international strategy for entering a foreign market by combining the higher labor skills and technology available in the developed countries with the lower cost labor available in the developing countries? 39) ______ A) licensing B) joint ventures C) production sharing D) acquisitions E) exporting 40) When a company deals with obtaining raw materials, parts, and supplies needed to perform the operations function, the company is developing its ________ strategy. 40) ______ A) purchasing B) R & D C) financial D) human resource management E) operations 41) When Intel opened four small-scale research facilities adjacent to universities to promote the cross-pollination of ideas, they were using which approach to R & D? 41) ______ A) continuous improvement B) technological leadership C) differentiation D) technology scouts E) open innovation 42) Which of the following is NOT a goal of financial strategies? 42) ______ A) Attempt to maximize the financial value of the firm. B) Provide the corporation with the appropriate financial structure and funds to achieve its overall objectives. C) Provide competitive advantage through a lower cost of funds and a flexible ability to raise capital to support a business strategy. D) Institute a new product development plan to generate profit potential. E) Examine the financial implication of corporate and business level strategic options and identify the best financial course of action. 43) When a company determines how and where a product or service is to be manufactured, the level of vertical integration in the production process, the deployment of physical resources, and relationships with suppliers, the company is developing its ________ strategy. 43) ______ A) R & D B) human resource management C) marketing D) financial E) operations 44) According to Porter, to achieve a cost advantage by following the functional strategy of technological followership, a business unit should 44) ______ A) be the first firm down the learning curve. B) pioneer the lowest-cost product design. C) innovate in other activities to increase buyer value. D) avoid R&D costs through imitation. E) create low-cost ways of performing value activities. 45) The purchasing strategy in which two suppliers are the sole suppliers of different parts, but are also the backup suppliers for each other's parts is 45) ______ A) multiple sourcing. B) just-in-time sourcing. C) sole sourcing. D) parallel sourcing. E) backup sourcing. 46) Which type of structure enables a corporation to centralize decision making along product lines and to reduce costs? 46) ______ A) matrix structure B) geographic-area structure C) functional structure D) product-group structure E) network structure 47) The job characteristics model is a good example of 47) ______ A) job design. B) job enrichment. C) job rotation. D) job enlargement. E) all of the above 48) There are three distinct phases in the development of a matrix structure. Which phase occurs when both the functional and product structures become permanent in a true dual-authority structure? 48) ______ A) true dual-authority structure B) immature matrix C) temporary cross-functional task forces D) mature matrix E) product/brand management 49) The program which incorporates the statistical approach of Six Sigma with the lean manufacturing program originally developed by Toyota is known as 49) ______ A) Flexible manufacturing. B) Lean Six Sigma. C) reengineering. D) Job enlargement. E) Just in time. 50) Which type of structure was used by American Cyanamid to introduce and manage a similar line of products throughout the world? 50) ______ A) international structure B) network structure C) geographic-area structure D) product-group structure E) functional structure 51) What is the activity that occurs in Stage I of international development? 51) ______ A) The company operates in a global industry and establishes worldwide personnel, R & D, and financing strategies. B) The company exports, but trade is minor and handled by an export department. C) The company invests in production facilities in key countries. D) The company establishes local operating divisions in host countries to better serve individual country markets. E) The company establishes its own export division with sales offices in other countries. 52) According to Hofstede, which cultural dimension describes the extent to which a society emphasizes the importance of hard work, education, and persistence as well as the importance of thrift? 52) ______ A) uncertainty avoidance B) masculinity-femininity C) power distance D) long-term orientation E) individualism-collectivism 53) Which of the following is NOT a guideline proposed for successful downsizing? 53) ______ A) Make across-the-board cuts. B) Invest in the remaining employees. C) Contract out work that others can do cheaper. D) Plan for long-run efficiencies. E) Communicate the reasons for actions. 54) If a planned strategy is not compatible with the company's current culture, and management is not willing to make major organizational changes required to manage around the culture, what should the organization do? 54) ______ A) Manage around the culture by establishing a new structural unit to implement the new strategy. B) Implement the new strategy and identify how it is superior to the old strategy. C) Find a joint-venture partner or contract with another company to carry out the strategy. D) Move forward very carefully by introducing small steps and modifications before full implementation. E) none of these 55) When Admiral was acquired by Maytag Corporation, the Admiral employees were willing to accept the dominance of Maytag's strong quality-oriented culture. This demonstrates which approach to managing culture? 55) ______ A) separation B) segmentation C) assimilation D) deculturation E) integration 56) One of the big common mistakes by corporations sending executives on global assignments is NOT 56) ______ A) providing training for the regulatory environment. B) educating executives about customs and values in other countries. C) giving executives the opportunity to visit home. D) raising their salaries. E) providing excellent health care. 57) A responsibility center which measures performance in terms of the difference between revenues (which measure production) and expenditures (which measure resources) is a(an) 57) ______ A) investment center. B) expense center. C) standard cost center. D) profit center. E) revenue center. 58) Which method of matching executive rewards to the accomplishment of strategic objectives is particularly appropriate for measuring and rewarding the performance of top SBU managers and group-level executives when performance factors and their importance vary from one SBU to another? 58) ______ A) long-term evaluation method B) strategic-funds method C) weighted-factor method D) segmentation method E) individual evaluation method 59) A survey of 600 business units found that compensation programs emphasizing bonuses and other incentives were most used in those units emphasizing 59) ______ A) stability strategies. B) international strategies. C) growth strategies. D) retrenchment strategies. E) cooperative strategies. 60) If marketing attains its goal at the expense of rising production costs are raised for the manufacturing department, the end result of marketing's achievements and manufacturing's cost increases reflects 60) ______ A) behavior substitution. B) suboptimization. C) resource allocation. D) strategy optimization. E) resource optimization.