TRUE/FALSE. Write 'T' if the statement is true and 'F' if the statement is false.1) Long-term objectives represent the results expected from pursuing certain strategies.Diff: 1Page Ref: 165Topic: Long-Term ObjectivesObjective: 5.01 Discuss the value of establishing long-term objectives.2) Objectives provide direction and allow for organizational synergy.Diff: 1Page Ref: 165Topic: Long-Term ObjectivesObjective: 5.01 Discuss the value of establishing long-term objectives.3) Strategic objectives include those associated with growth in revenues, growth in earnings, higher dividends,larger profit margins and improved cash flow.Diff: 2Page Ref: 166Topic: Long-Term ObjectivesObjective: 5.09 Compare and contrast financial with strategic objectives.4) Strategic objectives include larger market share, quicker on-time delivery than rivals, quickerdesign-to-market times than rivals, lower costs than rivals, and wider geographic coverage than rivals.Diff: 2Page Ref: 166Topic: Long-Term ObjectivesObjective: 5.09 Compare and contrast financial with strategic objectives.5) "If it ain't broke, don't fix it" refers to managing by crisis.Diff: 2Page Ref: 167Topic: Long-Term ObjectivesObjective: 5.01 Discuss the value of establishing long-term objectives.6) The overall aim of the Balanced Scorecard is to balance financial objectives with strategic objectives.Diff: 3Page Ref: 167Topic: Long-Term ObjectivesObjective: 5.08 Discuss the Balanced Scorecard.7) Since a combination strategy bears no risk, many organizations pursue a combination of two or morestrategies simultaneously.Diff: 3Page Ref: 169Topic: Long-Term ObjectivesObjective: 5.02 Identify 16 types of business strategies.8) Horizontal integration is seeking ownership or increased control over competitors.Diff: 2Page Ref: 169Topic: Long-Term ObjectivesObjective: 5.02 Identify 16 types of business strategies.

Page 2

9) Divestiture is selling all of a company's assets, in parts, for their tangible worth.Diff: 2Page Ref: 169Topic: Long-Term ObjectivesObjective: 5.02 Identify 16 types of business strategies.10) A chief executive officer is located in the divisional level of a large firm.Diff: 1Page Ref: 170Topic: Long-Term ObjectivesObjective: 5.02 Identify 16 types of business strategies.11) Gaining ownership or increased control over distributors or retailers is called forward integration strategy.Diff: 2Page Ref: 171Topic: Integration StrategiesObjective: 5.02 Identify 16 types of business strategies.12) Franchising is an effective means of implementing forward integration.Diff: 2Page Ref: 171Topic: Integration StrategiesObjective: 5.02 Identify 16 types of business strategies.13) A growing trend is for franchisers to buy out their part of the business from their franchisees.Diff: 2Page Ref: 171Topic: Integration StrategiesObjective: 5.02 Identify 16 types of business strategies.14) McDonalds currently owns more than 50 percent of its restaurants.Diff: 1Page Ref: 171Topic: Integration StrategiesObjective: 5.03 Identify numerous examples of organizations pursuing different types of strategies.15) Forward integration strategy is especially effective when the availability of quality distributors is so limited asto offer a competitive advantage to those firms that integrate forward.Diff: 2Page Ref: 171Topic: Integration StrategiesObjective: 5.04 Discuss guidelines when particular strategies are most appropriate to pursue.16) A strategy of seeking ownership or increased control of a firm's suppliers is backward integration.Diff: 2Page Ref: 172Topic: Integration StrategiesObjective: 5.02 Identify 16 types of business strategies.17) If a firm's present suppliers are expensive and unreliable in meeting the firm's needs for parts, componentsand/or raw materials, the firm should pursue a horizontal integration strategy.Diff: 2Page Ref: 172Topic: Integration StrategiesObjective: 5.04 Discuss guidelines when particular strategies are most appropriate to pursue.

Page 3

18) Horizontal integration is an appropriate strategy when the competitors of an organization are doing poorly.Diff: 3Page Ref: 173Topic: Integration StrategiesObjective: 5.04 Discuss guidelines when particular strategies are most appropriate to pursue.19) Market penetration, market development, and product development are intensive strategies.Diff: 2Page Ref: 173Topic: Intensive StrategiesObjective: 5.02 Identify 16 types of business strategies.20) When the correlation between dollar sales and dollar marketing expenditures has historically been low,market penetration is an appropriate strategy.Diff: 3Page Ref: 174Topic: Intensive StrategiesObjective: 5.04 Discuss guidelines when particular strategies are most appropriate to pursue.21) Market development includes introducing present products into new geographic areas.Diff: 1Page Ref: 174Topic: Intensive StrategiesObjective: 5.02 Identify 16 types of business strategies.22) An appropriate strategy when an organization has excess production capacity is market development.Diff: 2Page Ref: 174Topic: Intensive StrategiesObjective: 5.04 Discuss guidelines when particular strategies are most appropriate to pursue.23) Pepsi has 41 percent of the potato chip market in China.Diff: 2Page Ref: 174Topic: Intensive StrategiesObjective: 5.03 Identify numerous examples of organizations pursuing different types of strategies.24) Product development is a strategy that seeks increased sales by improving or modifying present products orservices.Diff: 1Page Ref: 174Topic: Intensive StrategiesObjective: 5.02 Identify 16 types of business strategies.25) Product development is an appropriate strategy when an organization has successful products that are in thematurity stage of the product life cycle.Diff: 2Page Ref: 175Topic: Intensive StrategiesObjective: 5.02 Identify 16 types of business strategies.26) There are four basic types of diversification: concentric, conglomerate, forward and backward.Diff: 1Page Ref: 175Topic: Diversification Strategies

Page 4

Objective: 5.02 Identify 16 types of business strategies.27) Most companies favor related diversification strategies in order to exploit common use of a well-known brandname.Diff: 2Page Ref: 175Topic: Diversification StrategiesObjective: 5.02 Identify 16 types of business strategies.28) Diversification strategies are becoming more popular as organizations are finding it easier to manage diversebusiness activities.Diff: 2Page Ref: 175Topic: Diversification StrategiesObjective: 5.02 Identify 16 types of business strategies.29) J.M. Smuckers Co.'s acquisition of Procter & Gamble's Folger's coffee business is an example of relateddiversification.Diff: 2Page Ref: 176Topic: Diversification StrategiesObjective: 5.03 Identify numerous examples of organizations pursuing different types of strategies.30) Unrelated diversification is an appropriate strategy when an organization's present channels of distributioncan be used to market the new products to current customers.Diff: 2Page Ref: 177Topic: Diversification StrategiesObjective: 5.04 Discuss guidelines when particular strategies are most appropriate to pursue.31) IBM's entrance into the water management business is an example of related diversification.Diff: 3Page Ref: 177Topic: Diversification StrategiesObjective: 5.03 Identify numerous examples of organizations pursuing different types of strategies.32) Unrelated diversification may be an especially effective strategy when an organization's basic industry isexperiencing increasing annual sales and profits.Diff: 2Page Ref: 177Topic: Diversification StrategiesObjective: 5.04 Discuss guidelines when particular strategies are most appropriate to pursue.33) Retrenchment and turnaround are the same strategy.Diff: 1Page Ref: 178Topic: Defensive StrategiesObjective: 5.02 Identify 16 types of business strategies.34) Although bankruptcy can be an effective type of retrenchment strategy, it does not allow firms to avoid majordebt obligations and to void union contracts.Diff: 3Page Ref: 179Topic: Defensive StrategiesObjective: 5.02 Identify 16 types of business strategies.

Page 5

35) Chapter 7 bankruptcy is a liquidation procedure used only when a firm sees no hope of being able to operatesuccessfully or to obtain necessary creditor agreement.Diff: 2Page Ref: 179Topic: Defensive StrategiesObjective: 5.02 Identify 16 types of business strategies.36) Chapter 9 bankruptcy applies to municipalities.Diff: 1Page Ref: 179Topic: Defensive StrategiesObjective: 5.02 Identify 16 types of business strategies.37) Personal bankruptcy filings in the U.S. exceeded 1 million for the first time ever in 2008.Diff: 2Page Ref: 179Topic: Defensive StrategiesObjective: 5.02 Identify 16 types of business strategies.38) Chapter 13 bankruptcy is similar to Chapter 11, but available only to large corporations.Diff: 2Page Ref: 179Topic: Defensive StrategiesObjective: 5.02 Identify 16 types of business strategies.39) Divestiture is the selling of all of a company's assets.Diff: 2Page Ref: 180Topic: Defensive StrategiesObjective: 5.02 Identify 16 types of business strategies.40) Divestiture has become a popular strategy for firms to focus on their core business and become morediversified.Diff: 3Page Ref: 180Topic: Defensive StrategiesObjective: 5.02 Identify 16 types of business strategies.41) Liquidation is often appropriate when retrenchment and divestiture have failed.Diff: 2Page Ref: 183Topic: Defensive StrategiesObjective: 5.04 Discuss guidelines when particular strategies are most appropriate to pursue.42) According to Porter, strategies allow organizations to gain competitive advantage from three different bases:cost leadership, differentiation and integration.Diff: 3Page Ref: 183Topic: Michael Porter's Five Generic StrategiesObjective: 5.05 Discuss Porter's five generic strategies.43) For consumers who are price sensitive, cost leadership emphasizes producing standardized products at verylow per-unit cost.

Page 6

Diff: 2Page Ref: 183Topic: Michael Porter's Five Generic StrategiesObjective: 5.05 Discuss Porter's five generic strategies.44) A best-value strategy offers products or services to a wide range of customers at the best price-value availableon the market.Diff: 2Page Ref: 183Topic: Michael Porter's Five Generic StrategiesObjective: 5.05 Discuss Porter's five generic strategies.45) A low-cost focus strategy offers products or services to a small range of customers at the lowest priceavailable on the market.Diff: 2Page Ref: 183Topic: Michael Porter's Five Generic StrategiesObjective: 5.05 Discuss Porter's five generic strategies.46) Jiffy Lube International would be a good example of a firm seeking the best-value focus strategy.Diff: 2Page Ref: 183Topic: Michael Porter's Five Generic StrategiesObjective: 5.03 Identify numerous examples of organizations pursuing different types of strategies.47) A cost leadership strategy can be especially effective when most buyers use the product in the same way.Diff: 2Page Ref: 185Topic: Michael Porter's Five Generic StrategiesObjective: 5.04 Discuss guidelines when particular strategies are most appropriate to pursue.48) A differentiation strategy can only be achieved with a large target market.Diff: 2Page Ref: 183Topic: Michael Porter's Five Generic StrategiesObjective: 5.05 Discuss Porter's five generic strategies.49) Differentiation guarantees competitive advantage.Diff: 2Page Ref: 185Topic: Michael Porter's Five Generic StrategiesObjective: 5.05 Discuss Porter's five generic strategies.50) The most effective differentiation bases are those that are hard or expensive for rivals to duplicate.Diff: 2Page Ref: 186Topic: Michael Porter's Five Generic StrategiesObjective: 5.05 Discuss Porter's five generic strategies.51) A low cost focus strategy can be especially attractive when the target market niche is small.Diff: 2Page Ref: 187Topic: Michael Porter's Five Generic StrategiesObjective: 5.04 Discuss guidelines when particular strategies are most appropriate to pursue.

Page 7

52) A differentiation strategy can be especially attractive when the industry has many different niches andsegments, thereby allowing a focuser to pick a competitively attractive niche suited to its own resources.Diff: 3Page Ref: 187Topic: Michael Porter's Five Generic StrategiesObjective: 5.04 Discuss guidelines when particular strategies are most appropriate to pursue.53) In a turbulent, high-velocity market, a lead-change strategy is best whenever the firm has the resources topursue this approach.Diff: 2Page Ref: 187Topic: Michael Porter's Five Generic StrategiesObjective: 5.13 Discuss strategies for competing in turbulent, high-velocity markets.54) Cooperative arrangements and joint ventures between competitors are becoming increasingly popular.Diff: 2Page Ref: 187Topic: Means for Achieving StrategiesObjective: 5.04 Discuss guidelines when particular strategies are most appropriate to pursue.55) Joint ventures tend to fail when managers who must collaborate daily in operating the venture are notinvolved in forming or shaping the venture.Diff: 2Page Ref: 189Topic: Means for Achieving StrategiesObjective: 5.07 Discuss joint ventures as a way to enter the Russian market.56) Divestiture would be an appropriate strategy when a need exists to introduce a new technology quickly.Diff: 2Page Ref: 190Topic: Means for Achieving StrategiesObjective: 5.07 Discuss joint ventures as a way to enter the Russian market.57) An acquisition occurs when a large organization purchases a smaller one or vice versa.Diff: 1Page Ref: 190Topic: Merger/AcquisitionObjective: 5.04 Discuss guidelines when particular strategies are most appropriate to pursue.58) When an acquisition or merger is not desired by both parties, it is called a takeover or hostile takeover.Diff: 2Page Ref: 190Topic: Merger/AcquisitionObjective: 5.04 Discuss guidelines when particular strategies are most appropriate to pursue.59) For all of 2008, global merger and acquisition volume increased 12 percent, putting it on par with the volumein 2005.Diff: 1Page Ref: 190Topic: Merger/AcquisitionObjective: 5.04 Discuss guidelines when particular strategies are most appropriate to pursue.60) White knight is a term that refers to a firm that agrees to acquire another firm when the other firm is facing ahostile takeover by some company.Diff: 2Page Ref: 191

Page 8

Topic: Merger/AcquisitionObjective: 5.04 Discuss guidelines when particular strategies are most appropriate to pursue.61) A leveraged buyout occurs when a firm's management and other private investors use borrowed funds to buyout the firm's shareholders.Diff: 2Page Ref: 192Topic: Merger/AcquisitionObjective: 5.04 Discuss guidelines when particular strategies are most appropriate to pursue.62) First mover advantage refers to the benefits a firm may achieve by entering a new market or developing a newproduct or service prior to rival firms.Diff: 2Page Ref: 193Topic: Merger/AcquisitionObjective: 5.11 Explain the First Mover Advantages concept.63) Companies are avoiding outsourcing more and more because it is more expensive than traditional methodsand it does not allow a firm to concentrate on core competencies.Diff: 3Page Ref: 193Topic: Merger/AcquisitionObjective: 5.12 Discuss recent trends in outsourcing.64) While outsourcing manufacturing, tech support, and back-office work is quite common, it is still unheard offor companies to outsource any of their research and development activities.Diff: 2Page Ref: 194Topic: Merger/AcquisitionObjective: 5.12 Discuss recent trends in outsourcing.65) The nonprofit sector is America's largest employer.Diff: 3Page Ref: 194Topic: Strategic Management in Nonprofit and Government OrganizationsObjective: 5.06 Describe strategic management in nonprofit, governmental, and small organizations.66) Strategists in governmental organizations operate with far more strategic autonomy than their counterparts inprivate firms.Diff: 2Page Ref: 195Topic: Strategic Management in Nonprofit and Government OrganizationsObjective: 5.06 Describe strategic management in nonprofit, governmental, and small organizations.67) Public enterprises generally cannot diversify into unrelated businesses or merge with other firms.Diff: 2Page Ref: 195Topic: Strategic Management in Small FirmsObjective: 5.06 Describe strategic management in nonprofit, governmental, and small organizations.68) All sizes and types of organizations can utilize and benefit from strategic-management concepts andtechniques.Diff: 1Page Ref: 196Topic: Strategic Management in Small Firms

Page 9

Objective: 5.10 Discuss the levels of strategies in large versus small firms.69) Research shows strategic management in small firms is more formal than in large firms, but large firms thatengage in strategic management outperform those that do not.Diff: 2Page Ref: 196Topic: Strategic Management in Small FirmsObjective: 5.10 Discuss the levels of strategies in large versus small firms.MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.70) Long-term objectives are needed at which level(s) in an organization?A. FunctionalB. DivisionalC. CorporateD. All of the aboveE. None of the aboveDiff: 1Page Ref: 195Topic: Long-Term ObjectivesObjective: 5.01 Discuss the value of establishing long-term objectives.71) Financial objectives involve all of the followingexcept:A. growth in revenues.B. larger market share.C. a rising stock price.D. greater return on investment.E. higher dividends.Diff: 2Page Ref: 166Topic: Long-Term ObjectivesObjective: 5.09 Compare and contrast financial with strategic objectives.72) What principle is based on the belief that the true measure of a really good strategist is the ability to solveproblems?A. Managing by extrapolationB. Managing by crisisC. Managing by exceptionD. Managing by objectivesE. Managing by hopeDiff: 1Page Ref: 167Topic: Long-Term ObjectivesObjective: 5.01 Discuss the value of establishing long-term objectives.73) What principle is built on the idea that there is no general plan for which way to go and what to do?A. Managing by extrapolationB. Managing by hopeC. Managing by objectivesD. Managing by subjectivesE. Managing by crisisDiff: 2Page Ref: 167Topic: Long-Term ObjectivesObjective: 5.01 Discuss the value of establishing long-term objectives.

Page 10

74) All of the following are listed among the "softer" factors in the Balanced Scorecardexcept:A. customer service.B. product quality.C. business ethics.D. stockholder equity.E. employee morale.Diff: 2Page Ref: 168Topic: Long-Term ObjectivesObjective: 5.08 Discuss the Balanced Scorecard.75) Which level of strategy is most likelynotpresent in small firms?A. DivisionalB. FunctionalC. Corporate/companyD. OperationalE. All of the above are present in small firms.Diff: 2Page Ref: 170Topic: Long-Term ObjectivesObjective: 5.10 Discuss the levels of strategies in large versus small firms.76) Microsoft opening its own retail stores is an example of which type of strategy?A. Horizontal integrationB. Backward integrationC. Forward integrationD. Related diversificationE. Unrelated diversificationDiff: 2Page Ref: 171Topic: Long-Term ObjectivesObjective: 5.03 Identify numerous examples of organizations pursuing different types of strategies.77) Cadbury PLC selling its Australian drinks business to Asahi Breweries Ltd. of Japan is an example of whichtype of strategy?A. LiquidationB. Related diversificationC. RetrenchmentD. Unrelated diversificationE. DivestitureDiff: 2Page Ref: 180Topic: Long-Term ObjectivesObjective: 5.03 Identify numerous examples of organizations pursuing different types of strategies.78) Burger King opening its first restaurant in Japan is an example of which type of strategy?A. Forward integrationB. Backward integrationC. Product developmentD. Market developmentE. Horizontal integrationDiff: 2Page Ref: 174

Page 11

Topic: Long-Term ObjectivesObjective: 5.03 Identify numerous examples of organizations pursuing different types of strategies.79) Which of the following is most likelynotincluded in the functional level of a small company?A. Department managersB. Human resource managersC. R&DD. MarketingE. FinanceDiff: 2Page Ref: 170Topic: Long-Term ObjectivesObjective: 5.10 Discuss the levels of strategies in large versus small firms.80) Integration strategies are sometimes collectively referred to as which of the following categories of strategies?A. Vertical integrationB. Hierarchical integrationC. DiversificationD. Stuck-in-the-middleE. Horizontal integrationDiff: 3Page Ref: 171Topic: Integration StrategiesObjective: 5.02 Identify 16 types of business strategies.81) Web sites that sell products directly to consumers are examples of which type of strategy?A. Conglomerate diversificationB. Product developmentC. Forward integrationD. Backward integrationE. Horizontal integrationDiff: 2Page Ref: 171Topic: Integration StrategiesObjective: 5.02 Identify 16 types of business strategies.82) The percent of McDonalds' restaurants actually owned by the McDonalds corporation is approximatelyA. 43 percent.B. 55 percent.C. 23 percent.D. 35 percent.E. 63 percent.Diff: 2Page Ref: 171Topic: Integration StrategiesObjective: 5.03 Identify numerous examples of organizations pursuing different types of strategies.83) Which of these strategies is effective when the number of suppliers is small and the number of competitors islarge?A. Conglomerate diversificationB. Backward integrationC. Concentric diversificationD. Forward integrationE. Horizontal diversificationDiff: 2Page Ref: 172Topic: Integration StrategiesObjective: 5.04 Discuss guidelines when particular strategies are most appropriate to pursue.

Page 12

84) Backward integration is effective in all of theseexceptA. when the advantage of stable prices are not important.B. when an organization needs to acquire a needed resource quickly.C. when an organization has both capital and human resources to manage the new business of supplyingits own raw materials.D. when an organization competes in an industry that is growing rapidly.E. when present suppliers have high profit margins.Diff: 1Page Ref: 172-173Topic: Integration StrategiesObjective: 5.04 Discuss guidelines when particular strategies are most appropriate to pursue.85) What refers to a strategy of seeking ownership of, or increased control over a firm's competitors?A. Concentric diversificationB. Horizontal integrationC. Forward integrationD. Conglomerate diversificationE. Backward integrationDiff: 3Page Ref: 173Topic: Integration StrategiesObjective: 5.02 Identify 16 types of business strategies.86) In which situation would horizontal integration be an especially effective strategy?A. When an organization can gain monopolistic characteristics in a particular area or region without beingchallenged by the federal government for "tending substantially" to reduce competition.B. When decreased economies of scale provide major competitive advantages.C. When an organization competes in a slowing industry.D. When an organization has neither the capital nor human talent needed to successfully manage anexpanded organization.E. When competitors are succeeding due to managerial expertise or having particular resources anorganization possesses.Diff: 3Page Ref: 173Topic: Integration StrategiesObjective: 5.04 Discuss guidelines when particular strategies are most appropriate to pursue.87) Which strategy seeks to increase market share of present products or services in present markets throughgreater marketing efforts?A. Market developmentB. Product developmentC. Backward integrationD. Forward integrationE. Market penetrationDiff: 2Page Ref: 173Topic: Intensive StrategiesObjective: 5.02 Identify 16 types of business strategies.88) When a domestic company first begins to export to India, it is an example ofA. forward integration.B. horizontal integration.

Page 13

C. backward integration.D. market development.E. concentric diversification.Diff: 2Page Ref: 183Topic: Intensive StrategiesObjective: 5.02 Identify 16 types of business strategies.89) Which strategy generally entails large research and development expenditures?A. Forward integrationB. Market penetrationC. DivestitureD. RetrenchmentE. Product developmentDiff: 1Page Ref: 174Topic: Intensive StrategiesObjective: 5.02 Identify 16 types of business strategies.90) All of the following situations are conducive to market developmentexcept:A. when an organization has excess production capacity.B. when an organization is very successful at what it does.C. when an organization competes in a high-growth industry.D. when new untapped or unsaturated markets exist.E. when an organization's basic industry is becoming rapidly global in scope.Diff: 2Page Ref: 174Topic: Intensive StrategiesObjective: 5.04 Discuss guidelines when particular strategies are most appropriate to pursue.91) Which strategy is appropriate when an organization competes in an industry characterized by rapidtechnological developments?A. Product developmentB. Market penetrationC. RetrenchmentD. LiquidationE. Backward integrationDiff: 2Page Ref: 175Topic: Intensive StrategiesObjective: 5.04 Discuss guidelines when particular strategies are most appropriate to pursue.92) Adding new, related products or services for present customers is calledA. forward integration.B. backward integration.C. related diversification.D. unrelated diversification.E. conglomerate diversification.Diff: 1Page Ref: 175-176Topic: Diversification StrategiesObjective: 5.02 Identify 16 types of business strategies.93) Which strategy should an organization use if it competes in a no-growth or a slow-growth industry?

Page 14

A. Unrelated diversificationB. RetrenchmentC. Related diversificationD. DivestitureE. Backward integrationDiff: 2Page Ref: 176Topic: Diversification StrategiesObjective: 5.04 Discuss guidelines when particular strategies are most appropriate to pursue.94) Qualcomm Inc.'s recent expansion beyond cell phones into desktop hardware is an example ofA. unrelated diversification.B. forward integration.C. divestiture.D. backward integration.E. retrenchment.Diff: 1Page Ref: 177Topic: Diversification StrategiesObjective: 5.03 Identify numerous examples of organizations pursuing different types of strategies.95) Which of the following is not an example of when an organization should use an unrelated diversificationstrategy?A. When existing markets for an organization's present products are not yet saturated.B. When an organization's present channels of distribution can be used to market the new products tocurrent customers.C. When revenues derived from an organization's current products or services would increase significantlyby adding the new unrelated, products.D. When an organization competes in a highly competitive and/or a no-growth industry.E. When the new products have counter-cyclical sales patterns compared to an organization's presentproducts.Diff: 3Page Ref: 177-178Topic: Diversification StrategiesObjective: 5.04 Discuss guidelines when particular strategies are most appropriate to pursue.96) Many more firms have failed at ________ than have succeeded due to the immense challenge of managingbusinesses in many industries rather than in a single industry.A. unrelated diversificationB. forward integrationC. related diversificationD. backward integrationE. related diversificationDiff: 2Page Ref: 177Topic: Diversification StrategiesObjective: 5.02 Identify 16 types of business strategies.97) Smithfield Foods laying off 1,800 employees, closing 6 of its 40 plants, and cutting production by 10 percent in2009 in efforts to stop the liquidity drain on the firm is an example ofA. backward integration.B. forward integration.C. liquidation.D. divestiture.

Page 15

E. retrenchment.Diff: 2Page Ref: 178Topic: Defensive StrategiesObjective: 5.03 Identify numerous examples of organizations pursuing different types of strategies.98) What kind of strategy is retrenchment?A. An expansion strategyB. An offensive strategyC. A conglomerate strategyD. An intensive strategyE. A turnaround or reorganization strategyDiff: 2Page Ref: 178Topic: Defensive StrategiesObjective: 5.02 Identify 16 types of business strategies.99) BankruptcyA. should only be used for large firms.B. can be an effective type of retrenchment strategy.C. should be used only when one is legally forced to do so.D. should never be used as a strategy.E. should only be used for small, private firms.Diff: 2Page Ref: 179Topic: Defensive StrategiesObjective: 5.02 Identify 16 types of business strategies.100) Which chapter of the bankruptcy code applies to municipalities?A. Chapter 8B. Chapter 7C. Chapter 13D. Chapter 9E. Chapter 12Diff: 1Page Ref: 179Topic: Defensive StrategiesObjective: 5.02 Identify 16 types of business strategies.101) The Family Farmer Bankruptcy Act of 1986 created which type of bankruptcy?A. Chapter 12B. Chapter 8C. Chapter 7D. Chapter 13E. Chapter 9Diff: 1Page Ref: 179Topic: Defensive StrategiesObjective: 5.02 Identify 16 types of business strategies.102) The form of bankruptcy in which all the organization's assets are sold in parts for their tangible worth isA. Chapter 8.B. Chapter 9.C. Chapter 11.D. Chapter 7.E. Chapter 13.Diff: 2Page Ref: 179Topic: Defensive StrategiesObjective: 5.02 Identify 16 types of business strategies.103) Retrenchment would be an effective strategy when an organizationA. has decided to capitalize on opportunities, maximize threats, take advantage of strengths and overcomeweaknesses.B. is one of the stronger competitors in a given industry.C. is plagued by inefficiency, low profitability, poor employee morale and pressure from stockholders to

Page 16

improveperformance.D. does not have a clearly distinctive competence and has failed to meet its objectives and goalsconsistently over time.E. has shrunk so quickly that major internal reorganization is needed.Diff: 3Page Ref: 179-180Topic: Defensive StrategiesObjective: 5.04 Discuss guidelines when particular strategies are most appropriate to pursue.104) Which term refers to selling a division of an organization?A. Horizontal integrationB. Joint ventureC. Concentric diversificationD. DivestitureE. LiquidationDiff: 2Page Ref: 180Topic: Defensive StrategiesObjective: 5.02 Identify 16 types of business strategies.105) Which strategy should be implemented when a division is responsible for an organization's overall poorperformance?A. Related diversificationB. Backward integrationC. Cost leadershipD. Forward integrationE. DivestitureDiff: 2Page Ref: 181Topic: Defensive StrategiesObjective: 5.04 Discuss guidelines when particular strategies are most appropriate to pursue.106) Selling all of a company's assets in parts for their tangible worth is calledA. joint venture.B. concentric diversification.C. unrelated integration.D. divestiture.E. liquidation.Diff: 1Page Ref: 181Topic: Defensive StrategiesObjective: 5.02 Identify 16 types of business strategies.107) Which strategy would be effective when the stockholders of a firm can minimize their losses by selling theorganization's assets?A. IntegrationB. DiversificationC. DifferentiationD. Cost leadershipE. LiquidationDiff: 2Page Ref: 183Topic: Defensive StrategiesObjective: 5.04 Discuss guidelines when particular strategies are most appropriate to pursue.

Page 17

108) Under which strategy would you offer products or services to a wide range of customers at the lowest priceavailable on the market?A. Cost Leadership Low CostB. DifferentiationC. Cost Leadership Best ValueD. Focus Best ValueE. Focus Low CostDiff: 2Page Ref: 183Topic: Michael Porter's Five Generic StrategiesObjective: 5.05 Discuss Porter's five generic strategies.109) According to Porter, which strategy offers products or services to a niche group of customers at the lowestprice available on the market?A. DifferentiationB. Cost Leadership Low CostC. Focus Best ValueD. Focus Low CostE. Cost Leadership Best ValueDiff: 1Page Ref: 183Topic: Michael Porter's Five Generic StrategiesObjective: 5.05 Discuss Porter's five generic strategies.110) Under which condition would a cost leadership strategy be especially effective?A. When technological change is fast paced and competition revolves around rapidly evolving productfeatures.B. When few rival firms are following a similar approachC. When there are many ways to differentiate the product or service and many buyers perceive thesedifferences as having value.D. When buyer needs and uses are diverse.E. When the products of rival sellers are essentially identical and supplies are readily available from any ofseveral eager sellers.Diff: 2Page Ref: 185Topic: Michael Porter's Five Generic StrategiesObjective: 5.05 Discuss Porter's five generic strategies.111) Under which condition would a differentiation strategy be especially effective?A. When technological change is fast paced and competition revolves around rapidly evolving productfeatures.B. When few, if any, other rivals are attempting to specialize in the same target segment.C. When the target market niche is large, profitable and growing.D. When the industry has many different niches and segments, thereby allowing a company to pick acompetitively attractive niche suited to its own resources.E. When industry leaders do not consider the niche to be crucial to their own success.Diff: 3Page Ref: 186Topic: Michael Porter's Five Generic StrategiesObjective: 5.05 Discuss Porter's five generic strategies.112) What occurs when two or more companies form a temporary partnership or consortium for the purpose ofcapitalizing on some opportunity?

Page 18

A. LiquidationB. A joint ventureC. Forward integrationD. RetrenchmentE. DivestitureDiff: 2Page Ref: 188Topic: Means for Achieving StrategiesObjective: 5.07 Discuss joint ventures as a way to enter the Russian market.113) All of the following are cooperative arrangementsexcept:A. cross-licensing agreements.B. joint-bidding consortia.C. marketing plans.D. cross-manufacturing agreements.E. R&D partnerships.Diff: 1Page Ref: 188Topic: Means for Achieving StrategiesObjective: 5.07 Discuss joint ventures as a way to enter the Russian market.114) Which of the following is not a reason joint ventures fail?A. Managers who must collaborate daily in operating the venture are not involved in forming or shapingthe venture.B. The venture may benefit the partnering companies but may not benefit the customers who thencomplain about poorer service or criticize the companies in other ways.C. Stakeholders from both partners are equally satisfied.D. The venture may not be supported equally by both partners.E. The venture may begin to compete more with one of the partners than the other.Diff: 2Page Ref: 189Topic: Means for Achieving StrategiesObjective: 5.07 Discuss joint ventures as a way to enter the Russian market.115) Which strategy would be most appropriate when the distinctive competencies of two or more firmscomplement each other especially well?A. RetrenchmentB. DivestitureC. IntegrationD. Conglomerate diversificationE. Joint ventureDiff: 2Page Ref: 190Topic: Means for Achieving StrategiesObjective: 5.07 Discuss joint ventures as a way to enter the Russian market.116) When two organizations of about equal size unite to form one enterprise, which of these occurs?A. MergerB. DivestitureC. LBOD. AcquisitionE. Hostile takeoverDiff: 1Page Ref: 190Topic: Merger/Acquisition

Page 19

Objective: 5.04 Discuss guidelines when particular strategies are most appropriate to pursue.117) Mergers and acquisitions are created for all of the following reasons except to:A. smooth out seasonal trends in sales.B. reduce tax obligations.C. gain economies of scale.D. gain new technology.E. increase the number of employees.Diff: 2Page Ref: 192Topic: Merger/AcquisitionObjective: 5.04 Discuss guidelines when particular strategies are most appropriate to pursue.118) There are annually more than 10,000 mergers in the United States that total more thanA. $975 billion.B. $1 trillion.C. $3 trillion.D. $700 billion.E. $825 billion.Diff: 2Page Ref: 192Topic: Merger/AcquisitionObjective: 5.04 Discuss guidelines when particular strategies are most appropriate to pursue.119) When companies take over functional operations of other firms, such as human resources, informationsystems, payroll, accounting, or customer service, this is calledA. outsourcing.B. marketing.C. licensing.D. divestiture.E. franchising.Diff: 1Page Ref: 193Topic: Merger/AcquisitionObjective: 5.12 Discuss recent trends in outsourcing.120) According to journalists' findings, what is a serious obstacle for many small business owners?A. Having too many suppliersB. A lack of business ethicsC. A lack of strategic-management knowledgeD. An excess of employees and managerial staffE. A lack of experience in networkingDiff: 2Page Ref: 196Topic: Strategic Management in Small FirmsObjective: 5.10 Discuss the levels of strategies in large versus small firms.128) Discuss Michael Porter's five generic strategies.Diff: 2Page Ref: 183Topic:Objective: 5.05 Discuss Porter's five generic strategies.129) What are the characteristics of a firm that is successfully pursuing a cost leadership strategy?Diff: 2Page Ref: 185Topic:Objective: 5.05 Discuss Porter's five generic strategies.130) Discuss four common problems that cause joint ventures to fail.Diff: 2Page Ref: 189Topic:Objective: 5.07 Discuss joint ventures as a way to enter the Russian market.131) Name at least six reasons for performing mergers or acquisitions.Diff: 2Page Ref: 192Topic:Objective: 5.02 Identify 16 types of business strategies.

1) TRUE2) TRUE3) FALSE4) TRUE5) FALSE6) FALSE7) FALSE8) TRUE9) FALSE10) FALSE11) TRUE12) TRUE13) FALSE14) FALSE15) TRUE16) TRUE17) FALSE18) FALSE19) TRUE20) FALSE21) TRUE22) TRUE23) TRUE24) TRUE25) TRUE26) FALSE27) TRUE28) FALSE29) TRUE30) TRUE31) FALSE32) FALSE33) TRUE34) FALSE35) TRUE36) TRUE37) TRUE38) FALSE39) FALSE40) FALSE41) TRUE42) FALSE43) TRUE44) TRUE45) TRUE46) FALSE47) TRUE48) FALSE49) FALSE50) TRUE51) FALSE52) FALSE53) TRUE54) TRUE55) TRUE56) FALSE57) TRUE58) TRUE59) FALSE60) TRUE61) TRUE62) TRUE63) FALSE64) FALSE65) TRUE66) FALSE67) TRUE68) TRUE69) FALSE70) D71) B72) B73) D74) D75) A76) C77) E78) D79) A80) A81) C82) C83) B84) A85) B86) A87) E88) D89) E90) C91) A92) C93) C94) A95) A96) E97) E98) E99) B100) D101) A102) D103) C104) D105) E106) E107) E108) A109) D110) E111) A112) B113) C114) C115) E116) A117) E118) D119) A120) C

Strategy Analysis and ChoiceTrue/FalseThe Nature of Strategy Analysis and Choice

1. An organizations present strategies, objectives and mission provide a basis for generating and evaluating feasible alternative strategies, coupled with the external andinternal auditinformation.Ans: T Page: 216

2. The Toxics Release Inventory (TRI) is administered by the Environmental Protection Agency in theUnited States.Ans: T Page: 217

3. Sustainability is the idea that a business can meet its financial goals without hurting customers.Ans: F Page: 218

A Comprehensive Strategy-Formulation Framework

4. The first stage of the strategy-formulation framework is the input stage, followed by the decision stage.Ans: F Page: 219

5. Stage 2 in the strategy-formulation framework involves the Quantitative Strategic Planning Matrix.Ans: F Page: 201

6. The Strengths-Weaknesses-Opportunities-Threats(SWOT) Matrix, the Strategic Position and Action Evaluation (SPACE) Matrix, the Boston Consulting Group (BCG) Matrix, the Internal-External (IE) Matrix and the Grand Strategy Matrix are included in stage two of the strategy-formulation framework.Ans: T Page: 219

The Input Stage

7. Good intuitive judgment is always needed to determine appropriate weights and ratings in the input stage matrices.Ans: T Page: 220

The Matching Stage

8. When completing the matching stage of the strategy-formulation framework, the SWOT Matrix needs to be completed before the SPACE Matrix.Ans: F Page: 2209. The purpose of matching key factors is to generate feasible alternative strategies.Ans: T Page: 220

10. Strengths-opportunities strategies are based on using a firms internal strengths to take advantage of external opportunities and threats.Ans: F Page: 221

11. A SWOT Matrix is composed of four cells for the four types of strategies it creates.Ans: F Page: 221

12. One ofthe stepsof the SWOT Matrix is to list the firms key external opportunities.Ans: T Page: 221

13. The SWOT matrix is widely used as an organizational tool and, if used appropriately, does not have any significant weaknesses.Ans: F Page 224-225

14. The most important determinants of an organizations overall strategic position are considered to be the two internal dimensions, financial strength (FS) and competitive advantage (CA), and the two external dimensions, industry strength (IS) and environmental stability (ES).Ans: T Page: 225

15. The four strategies of the SPACE Matrix are aggressive, conservative, offensive and defensive.Ans: F Page: 225

16. The ES and CA dimension variables in a SPACE Matrix are assigned a numerical value ranging from 1 (best) to 6 (worst).Ans: T Page: 226

17. Conservative strategies in a SPACE Matrix most often include product development, market development, market penetration and concentric diversification.Ans: T Page: 227

18. The firm should pursue conservative strategies if the coordinates of a SPACE directional vector are (1,4).Ans: F Page: 228

19. A firm should pursue defensive strategies if the coordinates of a SPACE directional vector are (2,3).Ans: F Page: 228

20. The firm should pursue aggressive strategies if the coordinates of a SPACE directional vector are (5,4).Ans: T Page: 228

21. Relative market share position is given on the x-axis of the BCG Matrix.Ans: T Page: 229

22. The midpoint on the x-axis of a BCG Matrix is typically set at 0.05.Ans: F Page: 229

23. The size of the circle in a BCG Matrix corresponds to the proportion of corporate revenue generated by that business unit.Ans: T Page: 230

24. In a BCG Matrix the pie slice indicates the proportion of corporate profits generated by that division.Ans: T Page: 230

25. Star, question mark,cash cowand dogs are the four quadrants exhibited by the SPACE Matrix.Ans: F Page: 231

26. Cash cows represent the organizations best long-run opportunities for growth and profitability.Ans: F Page: 231

27. The major overall benefit of the BCG Matrix is that it draws attention to the cash flow, investment characteristics and needs of an organizations various divisions.Ans: T Page: 231

28. Viewing businesses as star,cash cow, dog or question mark is an oversimplification.Ans: T Page: 232

29. The BCG Matrix does not reflect whether or not various divisions or their industries are growing over time.Ans: T Page: 232

30. Having no temporal qualities, the BCG Matrix is asnapshotof an organization at a given point in time.Ans: T Page: 232

31. Both IE and BCG Matrices are called portfolio matrices.Ans: T Page: 233

32. BCG Matrix requiresmore information aboutthe divisions than the IE Matrix.Ans: F Page: 233

33. On the x-axis of the IE Matrix, an internal factor evaluation score of 2.5 represents a weak internal position.Ans: F Page: 235

34. The IE Matrix can be divided into three major regions that have different strategy implications: grow and build, hold and maintain and harvest or divest.Ans: T Page: 235

35. The Grand Strategy Matrix is based on two evaluative dimensions, market share and market growth.Ans: F Page: 237

36. According to the Grand Strategy Matrix, when a Quadrant I firm is too heavily committed to a single product, then concentric diversification may reduce the risks associated with a narrow product line.Ans: T Page: 237

37. According to the Grand Strategy Matrix, Quadrant III organizations compete in rapid-growth industries and have weak competitive positions.Ans: F Page: 238

The Decision Stage

38. To objectively evaluate feasible alternative strategies identified in Stage 2, the QSPM uses input information derived from Stage 1.Ans: T Page: 240

39.Step 1of a QSPM assigns weights to each key external and internal factor.Ans: F Page: 241

40. Total attractiveness scores are defined as the sum of the attractiveness scores in a given column of the QSPM and are computed in the second step of the QSPM.Ans: F Page: 243

41. A positive feature of QSPM is that sets of strategies can be examined sequentially or simultaneously.Ans: T Page: 244

42. One positive feature of QSPM is that it does not require intuitive judgments and educated assumptions.Ans: F Page: 244

Cultural Aspects of Strategy Choice

43. Culture includes the set of shared values, beliefs, attitudes, customs, norms, personalities, heroes and heroines that describe a firm.Ans: T Page: 244

44. Strategy changes may be highly effective and productive if a supportive culture does not exist.Ans: F Page: 245

45. Whenever two firms merge, it becomes especially important to evaluate and consider culture-strategies linkages.Ans: T Page: 245

The Politics of Strategy Choice

46. Successful strategists minimize their own political exposureon issuesthat are highly controversial and in circumstances where opposition from major power centers was likely.Ans: T Page: 245

47. Focusing on Higher-Order Issues means it is often possible to achieve similar results using different means or paths.Ans: F Page: 246

48. Shifting focus from specific issues to more general ones may increase strategists options for gaining organizational commitment.Ans: T Page: 246

Governance Issues49. Now averaging 18 members the trend inAmerica is toward larger boards of directors.Ans: F Page: 247

50. Boards of directors are composed mostly of outsiders who are becoming more involved in an organizations strategic management.Ans: T Page: 247

51. The Sarbanes-Oxley Act put an end to the country-club atmosphere of most boards and has shifted power from CEOs to directors.Ans: T Page: 250

Multiple ChoiceThe Nature of Strategy Analysis and Choice

52. Strategy analysis and choice largely involves making __________ decisions based on __________ information.a. long-term; short-termb. subjective; objectivec. short-term; long-termd. subjective; short-terme. objective; subjectiveAns: b Page: 216

A Comprehensive Strategy-Formulation Framework

53. Which stage in the strategy-formulation framework focuses on generating feasible alternative strategies?a. Inputb. Outputc. Decisiond. Throughpute. MatchingAns: e Page: 219

54. Which stage of the strategy-formulation framework involves the Quantitative Strategic Planning Matrix?a. Stage 1b. Stage 2c. Stage 3d. Stage 4e. Stage 5Ans: c Page: 219

55. Which strategy formulation technique reveals the relative attractiveness of alternative strategies and thus provides an objective basis for selecting specific strategies.a. SWOTb. SPACEc. QSPMd.IFEe. CPMAns: c Page: 219

56. Each of the nine techniques included in the strategy formulation framework rely on the use ofa. strictly factual data.b. luck.c. financial formulas and statistics.d. intuition and analysis.e. synergy.Ans: d Page: 219

The Input Stage57. Which stage of the strategy formulation framework includes an Internal Factor Evaluation Matrix and a Competitive Profile Matrix?a. inputb. matchingc. decisiond. penetratione. researchAns: a Page: 219

58. Which stage of the strategy formulation framework contains the Internal-Factor Evaluation Matrix?a. input stageb. analysis stagec. matching staged. decision stagee. output stageAns: a Page: 219

The Matching Stage

59. The match an organization makes between its internal resources and skills and the opportunities and risks created by its external factors can be defined as:a. Inputb. Concept formulationc. Strategyd. SWOTe. An opportunityAns: c Page: 220

60. Which section of the SWOT Matrix involves matching internal strengths with external opportunities?a. The WT cellb. The SW cellc. The WO celld. The ST celle. The SO cellAns: e Page: 221

61. Which strategies aim at improving internal weaknesses by taking advantage of external opportunities?a. SOb. WOc. SWd. STe. WTAns: b Page: 221

62. Which strategies use a firms strengths to avoid or reduce the impact of external threats?a. SWb. WOc. SOd. STe. WTAns: d Page: 221

63. Which strategies are defensive tactics directed at reducing internal weaknesses and avoiding environmental threats.a. SOb. WOc. SWd. STe. WTAns: e Page: 221

64. How many cells are in a SWOT Matrix?a. twob. fourc. sixd. eighte. nineAns: e Page: 221

65. Which of the following is not a step of a SWOT Matrix?a. List the firms key external threats.b. Match strengths with external opportunities and record the resultant SO strategies in the appropriate cell.c. Match internal weaknesses with external threats and record the resultant WT strategies.d. List the firms external weaknesses.e. List the firms external opportunities.Ans: d Page: 221-222

66. Which of these is not a SPACE Matrix quadrant?a. Aggressiveb. Defensivec. Competitived. Offensivee. ConservativeAns: d Page: 225

67. The two internal dimensions represented on the axes of the SPACE Matrix area. environmental stability and industry strength.b. industry strength and internationalization.c. internationalization and competitive advantage.d. competitive advantage and financial strength.e. financial strength and environmental stability.Ans: d Page: 225

68. What are two external dimensions of the SPACE Matrix?a. Environmental stability and industry strengthb. Environmental stability and competitive advantagec. Industry strength and competitive advantaged. Competitive advantage and financial strengthe. Financial strength and industry strengthAns: a Page: 226

69. The two positive-rated dimensions on SPACE Matrix area. FS and CA.b. CA and ES.c. FS and IS.d. IS and ES.e. FS and ES.Ans: c Page: 226

70. What type of strategies would you recommend when a firms SPACE Matrix directional vector has the coordinates (-2, +3)?a. Aggressiveb. Conservativec. Competitived. Defensivee. IntegrativeAns: b Page: 225

71. In the SPACE analysis, what does a (+6, +3) strategy profile portray?a. A strong industryb. An unstable environmentc. A stable environmentd. A weak industrye. A weak financial positionAns: a Page: 225

72. What is a weakness associated with a SWOT Matrix?a. Viewing every business as a Star, Cash Cow, Dog, or Question Mark is an oversimplificationb. Many businesses fall right in the middle of the matrixc. The matrix has no temporal qualitiesd. Other variables besides relative market share position and industry growth rate in sales need to be considerede. The matrix does not reflect whether or not various divisions or their industry are growing over timeAns: c Page 225

73. For what type of company is the BCG Matrix ideal for analyzing?a. Companies with more than one divisionb. All companiesc. Companies with annual sales greater than $1 milliond. Companies with annual sales of less than $1 millione. Large companiesAns: a Page: 227

74. In the BCG Matrix, which element represents the industry growth rate in sales, measured in percentage terms?a. x-axisb. y-axisc. first quadrantd. second quadrante. third quadrantAns: b Page: 229

75. How would a division with a low relative market share position in a high growth industry be described?a. question markb. cash cowc. stard. stuck-in-the-middlee. dogAns: a Page: 230

76. When a division of an organization has a high relative market share and is in a fast-growing industry, it is called aa. starb. cash cowc. catd. question marke. dogAns: a Page: 230

77. A division with a high relative market share position in a low-growth industry can be described as aa. starb. cash cowc. question markd. doge. failureAns: b Page: 231

78. Which of these is an attractive strategy for a cash cow division?a. Concentric diversificationb. Horizontal integrationc. Conglomerate diversificationd. Backward integratione. Forward integrationAns: a Page: 231

79. Most likely, what was a cash cow in the past?a. dogb. failurec. question markd. cate. starAns: e Page: 231

80. An organization that has a low relative market share position and competes in a slow-growth industry is referred to as aa. dog.b. question mark.c. star.d. cash cow.e. cowboy.Ans: a Page: 231

81. The BCG Matrix limitations include all of these except:a. viewing every business as a star, cash cow, dog or question mark can be an oversimplification.b. requiring at least three years worth of data.c. not reflecting divisional or industry growth over time.d. not allowing a company to be classified as somewhere in between two categories.e. other variables such as size of market and competitive advantages are not considered.Ans: b Page: 232

82. Which analytical tool consists of a nine-cell matrix?a. Matching Matrixb. Competitive Profile Matrixc. SPACE Matrixd. Grand Strategy Matrixe. Internal-External MatrixAns: e Page 233

83. What analytical tool has four quadrants based on two dimensions: competitive position and market growth?a. Competitive Profile Matrixb. Internal-External Matrixc. SPACE Matrixd. Grand Strategy Matrixe. QSPMAns: d Page: 237

84. Firms located in which quadrant of the Grand Strategy Matrix are in an excellent strategic position?a. Ib. IIc. IIId. IVe. VAns: a Page: 237

85. According to the Grand Strategy Matrix, which strategy is recommended for a firm with rapid market growth and a strong competitive position?a. Market penetrationb. Conglomerate diversificationc. Joint ventured. Retrenchmente. LiquidationAns: a Page: 237

86. For companies located in Quadrant III of the Grand Strategy Matrix, the first strategy recommended isa. extensive cost and asset reduction.b. asset expansion.c. employee expansion.d. immediate liquidation of assets.e. divestiture.Ans: a Page: 238

87. Although Quadrant _____ companies are growing, according to the Grand Strategy Matrix, they are unable to compete effectively, and they need to determine why the firms current approach is ineffective and how the company can best change to improve its competitiveness.a. Ib. IIc. IIId. IVe. VAns: b Page: 238

88. According to the Grand Strategy Matrix, organizations in which .quadrant have a strong competitive position but are in a slow-growth industry,a. Ib. IIc. IIId. IVe. VAns: d Page: 238

The Decision Stage

89. Which matrix is included in the decision stage of the strategy formulation framework?a. Internal Factor Evaluation Matrixb. Quantitative Strategic Planning Matrixc. BCG Business Portfolio Matrixd. Grand Strategy Matrixe. SPACE MatrixAns: b Page: 239

90. The top row of a QSPM consists of alternative strategies derived from all of these except:a. Grand Strategy Matrix.b. BCG Matrix.c. Space Matrix.d. CPM Matrix.e. IE Matrix.Ans: d Page: 240

91. Which analytical tool determines the relative attractiveness of various strategies based on the extent to which key external and internal critical success factors are capitalized?a. BCG Matrixb. SPACE Matrixc. TOWS Matrixd. IE Matrixe. QSPMAns: e Page: 241

92. Which of the following is the first step in developing QSPM?a. Compute the Total Attractiveness Scores.b. Examine the Stage 2 matrices and identify alternative strategies the organization should consider implementing.c. Assign weights to each key external and internal factor.d. Determine the Attractiveness Scores.e. Make a list of the firms key external opportunities/threats and internal strengths/weaknesses in the left column of the QSPM.Ans: e Page: 241-243

93. What term is defined as the product of multiplying ratings by attractiveness scores in each row of the QSPM?a. Total attractiveness scoresb. Sum total attractiveness scoresc. Weighted scoresd. Total weighted scorese. FactorsAns: a Page: 243

94. What is the highest number of strategies that can be examined at one time with the QSPM?a. 1b. 2c. 5d. 10e. There is no limit.Ans: e Page: 244

95. Which of these is a limitation of QSPM?a. Only a few strategies can be evaluated simultaneously.b. The cost of doing the analysisc. Intuitive judgments and educated guesses are required.d. Sets of strategies must be examined in reverse order.e. It requires equal participation from everyone.Ans: c Page: 244

Cultural Aspects of Strategy Choice96. What includes the set of shared values, beliefs, attitudes, customs, norms, personalities, heroes and heroines that describe a firm?a. Strategyb. Culturec.Missiond. Objectivese. QSPMAns: b Page: 244

The Politics of Strategy Choice

97. What tactic involves shifting focus from specific issues to more general ones?a. Equifinalityb. Focus on higher-order issuesc. Generalizationd. Satisficinge. None of the aboveAns: c Page: 246

98. Through which tactic is it possible to achieve similar results using different means or paths?a. Generalizationb. Satisficingc. Focus on higher-order issuesd. Equifinalitye. SpecializationAns: d Page: 246

Governance Issues99. The act of oversight and direction for an organization is referred to asa. corporate lawmaking.b. centralized control.c. organizational direction.d. establishing norms.e. governance.Ans: e Page: 226

100. Today, what are boards of directors composed mostly of?a. outsidersb. managementc. uniond. employeese. stockholdersAns: a Page: 247

101. All of the following are principles of good organizational governance, as established by Business Week, except:a. No directors do business with the company or accept consulting or legal fees from the firm.b. The audit, compensation and nominating committees are made up solely of outside directors.c. Each director owns a large equity stake in the company, excluding stock options.d. At least two directors are current or former company executives.e. The CEO is not also the Chairperson of the Board.Ans: d Page: 247