Chapter 1 Quiz

1. The term _________ is used to refer to strategy formulation, implementation,

and evaluation, with _________referring only to strategy formulation.
strategic planning; strategic management
assessment; planning
strategic management; strategic planning
management cycle; brainstorming
Correct Answer:

strategic management; strategic planning

2. Which of these requires a firm to establish annual objectives, devise policies,

and allocate resources?
Strategy formulation
Strategy implementation
Strategy manipulation
Strategy evaluation
3.The rationale for periodically conducting strategic-management meetings away
from the work site is to encourage more _____________ and ____________
among participants.
feedback; rigidity
creativity; candor
confidence; self-interest
strategy evaluation; candor
4.Anything that a firm does especially well compared to rival firms is referred to
as:
competitive advantage.
comparative advantage.
an external opportunity.
opportunity cost.
5.Both military and business organizations do all of the following except:
use of the element of surprise.
Aim "to gain competitive advantage."
use the assumption of conflict to develop strategies.
use their own strengths to exploit competitors' weaknesses.
6.__________ are the individuals who are most responsible for the success or

failure of an organization.
Ethics officers
Operatives
Consultants
Strategists
7.A disadvantage of international operations is:
foreign operations can allow firms to establish low-cost production
facilities in locations close to raw materials and/or cheap labor.
economies of scale can be achieved from operation in global rather
than solely domestic markets.
competitors in foreign markets may not exist.
Language, culture, and value systems differ among countries,
causing communication barriers and problems managing people.
8.The problem of limited resources within a firm makes ______________
particularly important as the firm decides how to allocate its resources.
strategy formulation
strategy implementation
long-range planning
short-range planning
9.All of these are pitfalls an organization should avoid in strategic planning
except:
using strategic planning to gain control over decisions and
resources.
failing to involve key employees in all phases of planning.
hastily moving from mission development to strategy formulation.
using plans as a standard for measuring performance.
10.The process of conducting research and gathering and assimilating external
information is called:
lobbying.
industry analysis.
long-range planning.
mission development.
11.The term strategic planning refers only to strategy formulation.
True
False

12.The action stage of strategic management is called strategy formulation.

True
False
13.Three fundamental strategy evaluation activities are reviewing external and
internal factors, measuring performance, and taking corrective actions.
True
False
14.Strategies can be defined as specific results that an organization seeks to
achieve in pursuing its basic mission.
True
False
15.Reasons for poor or no strategic planning on part of firms include
overconfidence, too expensive, suspicion, and laziness.
True
False
16.In a multidivisional firm, objectives should be established for the overall
company and not for each division.
True
False
17.An organization can pursue any and/or all strategies that potentially could
benefit the firm.
True
False
18.Communication is an act of strengthening employees' sense of effectiveness by
encouraging them to participate in decision making and to exercise initiative and
imagination, and rewarding them for doing so.
True
False
19.Given that formality creates flexibility and creativity, managers must be very
formal in strategic planning.
True
False
20.One pitfall to avoid in strategic planning is top management making many
intuitive decisions that conflict with formal planning.
True
False

Identify and describe the three stages of the strategic-management process. Give
reasons within your answer to describe why each of these stages is important in strategic
management.
Answers
1.Correct Answer:

strategic management; strategic planning

2.Correct Answer:
.

Strategy implementation

3.Correct Answer:

creativity; candor

4.

competitive advantage.

Correct.:

5.Correct Answer:

use the assumption of conflict to develop strategies.

6.Correct Answer:

Strategists

.
7.Correct Answer:
language, culture, and value systems differ among countries,
causing communication barriers and problems managing people.
8.Your Answer:

strategy formulation

Correct.
9.Correct Answer:
.

using plans as a standard for measuring performance.

10.Correct Answer:

industry analysis.

11.True
Correct.
12.Correct Answer:
False
Incorrect. Strategy implementation is called the action stage.
13.True

Correct.

14.Correct Answer:
False
15.Incorrect. Strategies are the means by which long-term objectives will be achieved.
Correct Answer:
True
16.Incorrect. Some firms do not engage in strategic planning due to overconfidence, too
expensive, suspicion, and laziness.
False
Correct.
17.Correct Answer:
False
Incorrect. No organization can pursue all the strategies that potentially could
benefit the firm.
18.Correct Answer:
False
Incorrect. Empowerment is the act of strengthening employees' sense of
effectiveness by encouraging and rewarding them to participate in decision making and

exercise initiative and imagination.

19.Correct Answer:
False
Incorrect. Managers that are very formal in strategic planning can stifle flexibility
and creativity.
20.True
Correct.
21.
Identify and describe the three stages of the strategic-management process.
Give reasons within your answer to describe why each of these stages is important in
strategic management.
Your Answer:
(blank)

22.
What is sustained competitive advantage? Define this concept and explain
how a firm can achieve it. Why is it important in strategic management?
Your Answer:
(blank)

23.
How do external opportunities and threats differ in their strategic
implications from those of internal strengths and weaknesses? Be sure to include in your
answer a brief description of each of these four terms.
Your Answer:
(blank)

24.
What is the strategic-management model? What does it represent?
Describe several characteristics of the strategic-management process based on what you
understand about the strategic-management model.
Your Answer:
(blank)

25.
Describe the concept of empowerment. How is empowerment related to
the decentralization of the strategic-management process?
Your Answer:
(blank)
\
Chapter 2

The operating ______ of organizations should be to identify customers' needs

and then provide a product or service to fulfill those needs.
philosophy
culture
self-concept
concern for public image
Carefully prepared _____________ and ____________ are widely recognized by
both practitioners and academicians as the first step in strategic management.
long-term objectives; goals
creeds; long-term objectives
vision statements; mission statements
short-term objectives; long-term objectives
The vision and mission statement can often be found:
on supplier invoices.
in a competitive market analysis.
on the front of annual reports.
in the SEC report.
It is important to involve ______________ in the process of developing a mission
statement.
only those managers who will use the mission
very few people to ease consensus-building
as many managers as possible
as wide a variety of upper-level managers as possible
Which of the following is not one of the reasons identified by King and Cleland
for carefully developing a written mission?
To ensure ambiguity of purpose within the organization
To establish a general tone or organizational climate
To provide a basis for allocating organizational resources

To facilitate the translation of objectives into a work structure involving

the
assignment of tasks to responsible elements within the organization
During strategy _________, corporate social policy should be set and
administered.
formulation
control
evaluation
implementation
What is the recommended length of an effective mission statement?
Less than 200 words
One sentence of 10 to 20 words
There is no recommendation. It can be as long as the management wants.
One page
A study by Rarick and Vitton found that firms with a formalized mission
statement have the average return on shareholders' equity compared to those
firms without a formalized mission statement.
twice
five times
half
one quarter
A good operating philosophy of organizations should be to ________ and then
_________.
identify customers' needs; provide a product or service to fulfill them
develop a market; identify a customer base
take an environmental orientation first; take a customer orientation
develop a product or service; identify a market for the product or service
Which of the following is a question that an effective mission statement answers?
Is the firm technologically current?
What is the company we want to be in the long-range future?
What is our net worth?
What is our profitability?
The vision statement should be short, preferably one sentence.
True

False
Commitment to a company's strategy and intellectual agreement on the
strategies to be pursued do not necessarily translate into an emotional bond.
True
False
The highest level of managers should develop the vision statement, which should
be concise.
True
False
Each division of a multidivisional organization should develop a mission
statement.
True
False
Stakeholders of an organization include stockholders, customers and creditors, but
not the competitors.
True
False
Developing a comprehensive mission statement is important because divergent
views can be revealed and resolved through the process.
True
False
An effective mission statement should include five components.
True
False
During strategy formulation, social policy should be reaffirmed and changed.
True
False
A mission statement should be specific and thus encourage the creative potential
for the organization.
True
False
The term social policy embraces managerial philosophy and thinking at the
highest levels of an organization.
True
False
What is the purpose of a mission statement? Differentiate between a mission and a

vision statement.

Many organizations develop both a mission statement and a vision statement. Whereas
the mission statement answers the question "What is our business?" the vision
statement answers the question "What do we want to become?" Students should refer
to "What Is Our Business?" and "Vision Versus Mission" for more information
related to this question. These sections are located on pages 59-60.

Why are the vision and mission statements important to a given organization?
Why are they important to effective strategic management? Cite several reasons
organizations should carefully develop a written mission statement.
King and Cleland recommend that organizations carefully develop a written
mission statement. They provide several reasons stated in the text. These include ensuring
unanimity of purpose within the organization, providing a basis for allocating resources,
establishing a general organizational climate, serving as a focal point for identification
with the organization's purpose and direction, and others. Students should refer to the
importance of vision and mission statements on pages 61-62 in developing their answers.

Why is the resolution of divergent views important in an organization? How can

the development of a mission statement help the organization to achieve this? What could
happen if considerable disagreement over the vision and mission of a firm is not
resolved?
The resolution of divergent views is important in any organization. It is more
important to build consensus on the mission and vision of the firm than to make
compromises that do not represent the views of either party. If left unresolved, divergent
views can lead to constant disagreements among the organization's strategists. Students
may refer to a resolution of divergent views on pages 62-64 for more information.

What does it mean to reflect the anticipations of customers? How can a company
incorporate this idea when developing its mission statement?

A good mission statement reflects the anticipations of customers. Rather than

developing a product and then trying to find a market, the operating philosophy of
organizations should be to identify customers' needs and then provide a product or
service to fulfill those needs. This is part of establishing a customer orientation instead of
a product orientation or specific service orientation. A major reason for developing a
mission statement is to attract customers who give meaning to an organization. For more
regarding this question, students may refer to a customer orientation on pages 66-68.

List and explain the nine essential components of a mission statement. Why are
these important?
The mission statement is often the most visible and public part of the strategicmanagement process. There are nine critical components that should be included in the
mission statement. They can be addressed by asking several questions-who, what,
where, how much, or what. Students should identify all nine components-customers,
products, markets, technology, concern for survival, growth and profitability, philosophy,
self-concept, concern for public image, and concern for employees. Students can refer to
mission statement components on page 70 for more information related to this question.

Your Results for "Chapter Quiz"

1.
Your Answer: philosophy
Correct.
2.
Your Answer: long-term objectives; goals
Correct Answer:

vision statements; mission statements

Incorrect. The correct answer is vision statements; mission statements.

3.
Your Answer: in a competitive market analysis.
Correct Answer:

on the front of annual reports.

Incorrect. The correct answer is on the front of annual reports.

4.

Your Answer: only those managers who will use the mission
Correct Answer:

as many managers as possible

Incorrect. The correct answer is as many managers as possible.

5.
Correct Answer:

To ensure ambiguity of purpose within the organization

6.
Your Answer: implementation
Correct.
7.
Your Answer: Less than 200 words
Correct.
8.

Correct Answer:

twice

Incorrect. The correct response is twice.

9.
Your Answer: identify customers' needs; provide a product or service to fulfill them
Correct.
10.Your Answer:
Correct.
11.
Your Answer:
True
Correct.

Is the firm technologically current?

12.
Correct Answer:
True
Incorrect. This does not necessarily translate into an emotional bond; hence,
strategies that have been formulated may not be implemented.
13.
Correct Answer:
False
Incorrect. As many managers as possible should have input into developing the
vision statement.
14.
Correct Answer:
True
Incorrect. Each division of a multidivisional organization should develop a
mission statement.
15.
Your Answer:
False
Correct.
16.
Your Answer:
True
Correct.
17.
Correct Answer:
False

Incorrect. An effective mission statement should include nine components.

18.
Correct Answer:
False
Incorrect. It should be changed during strategy evaluation.
19.
Correct Answer:
False
Incorrect. A good mission statement should not be too specific; otherwise, it could
stifle the potential for creative growth for the organization.
20.
Your Answer:
True
Correct.

Chapter 3

Chapter Quiz

According to I/O theorists, which of the following contributes least to firm

performance?
Internal resources
Economies of scale
Barriers to market entry
Product differentiation
The external audit is aimed at:
taking advantage of potential threats and minimizing external
opportunities.
developing an exhaustive list of factors that could influence the business.
identifying key variables that offer actionable responses.
developing an infinite list of opportunities that could
benefit a firm.
Which of the following is not a misperception about business intelligence that
prevails among American executives today?
Running an intelligence program requires lots of people, computers, and
other resources.
Business is not equal to espionage.
Intelligence gathering is an unethical business practice.
Collecting intelligence about competitors violates antitrust laws.
__________ are the results of a low value of the dollar.
Lower imports and higher exports
Lower imports and lower exports
Higher imports and higher exports
Higher imports and lower exports
has replaced as the world's hottest destination for foreign direct investment.
Great Britain; China
Great Britain; the United States
The United States; China
China; the United States
_______________ and ______________ are creating similar patterns of
consumption in diverse cultures worldwide.
Tax harmonization; legal factors
Distinct domestic markets; the climate for international business
Mass communication; high technology
Corporate tax breaks; mass communication

Many businesses use _____________ to obtain most of their information on

competitors because it is fast, thorough, and accurate.
past performance
the Internet
SEC reports
other firms' mission statements
All of these, except__________, are part of Porter's competitive forces in industry
analysis.
potential entry of new competitors
bargaining power of suppliers
development of substitute products
bargaining power of unions

In its simplest sense, the international challenge faced by U.S. business is

twofold:
how to increase exports to other countries and how to increase
imports from other countries.
how to defend domestic markets against imported goods while minimizing
exports.
how to maximize exports to other nations and how to defend domestic markets
against imported goods.
how to minimize imports and exports in domestic markets and slowly decrease
globalization.

_______________ are most appropriate when historical data are available and
when the relationships among key variables are expected to remain the same in the
future.
Qualitative forecasts
Econometric model analyses
Quantitative forecasts

A scenario forecast

Five major categories of external variables are: (1) economic forces, (2) social
and cultural forces, (3) political, governmental and legal forces, (4) technological forces
and (5) demographic forces.
True
False

Significant and unequal effects on companies in different industries and in

different locations come from trends in the dollar's value.
True
False

The absence of a legal system deters firms from initiating business with China.
True
False

Research findings suggest that approximately 36 percent of a firm's profitability

can be explained by the industry, whereas 20 percent is attributed to the firm's internal
factors.
True
False

Nine out of 10 large companies have employees dedicated solely to gathering

competitive intelligence.
True
False

Acquisition is essential to growth in the most competitive companies.

True
False

Bargaining power of consumers is usually the most powerful of Porter's five

competitive forces.
True
False

Many large multinational firms are moving out of EU member-countries into

Switzerland and Ireland to avoid costs associated with tax harmonization.
True
False

Poor infrastructure and little respect for legal contracts are two risks that still
restrain firms from initiating business with China.
True
False

Based on the best information at the time, assumptions serve as checkpoints on

the validity of strategies.
True
False

Identify the five broad categories of external forces. Which two do you think are
the most important for a firm that specializes in government contracts for the military?
Support your response.
To create paragraphs in your essay response, type <p> at the beginning of
the paragraph, and </p> at the end.

Briefly explain the rationale behind the industrial organization (I/O) approach to
competitive advantage. Do you agree with this approach?
To create paragraphs in your essay response, type <p> at the beginning of
the paragraph, and </p> at the end.

Explain the importance of technological forces for a firm. Identify some recent
technological forces that have been factors in how companies compete in a particular
industry and explain how those forces affected competition.

To create paragraphs in your essay response, type <p> at the beginning of

the paragraph, and </p> at the end.

Differentiate between market commonality and resource similarity. What is meant

by each of these terms? How are they used?
To create paragraphs in your essay response, type <p> at the beginning of
the paragraph, and </p> at the end.

What is the Competitive Profile Matrix? How is it used? What factors are
included in this analysis?
To create paragraphs in your essay response, type <p> at the beginning of
the paragraph, and </p> at the end.

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Your Results for "Chapter Quiz"

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Site Title:

Strategic Management: Concepts and Cases, 11E

Book's Title: Strategic Management: Concepts and Cases, 11th Edition

Book's Author:

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Location on Site:

Chapter 3 > Chapter Quiz

Date/Time Submitted:
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Summary of Results
45% Correct of 20 scored items: 9 correct:
11 incorrect: 55%

45%

5 questions not scored. 20 scored questions.

More information about scoring

1.
According to I/O theorists, which of the following contributes least to firm
performance?
Your Answer: Internal resources

Correct.
2.

The external audit is aimed at:

Your Answer: taking advantage of potential threats and minimizing external

opportunities.
Correct Answer:

identifying key variables that offer actionable responses.

Incorrect. The correct answer is identifying key variables that offer actionable
responses.
3.
Which of the following is not a misperception about business intelligence
that prevails among American executives today?
Your Answer: Running an intelligence program requires lots of people, computers, and
other resources.
Correct Answer:

Business is not equal to espionage.

Incorrect. This is a misperception about business intelligence. The correct answer

is that business is not equal to espionage.
4.

__________ are the results of a low value of the dollar.

Your Answer: Lower imports and higher exports

Correct.
5.
investment.

has replaced as the world's hottest destination for foreign direct

Your Answer: Great Britain; the United States

Correct Answer:

China; the United States

Incorrect. The correct answer is China; the United States.

6.
_______________ and ______________ are creating similar patterns of
consumption in diverse cultures worldwide.

Your Answer: Mass communication; high technology

Correct.
7.
Many businesses use _____________ to obtain most of their information
on competitors because it is fast, thorough, and accurate.
Your Answer: other firms' mission statements
Correct Answer:

the Internet

Incorrect. The correct answer is the Internet.

8.
All of these, except__________, are part of Porter's competitive forces in
industry analysis.
Your Answer: bargaining power of unions
Correct.
9.
twofold:

In its simplest sense, the international challenge faced by U.S. business is

Your Answer: how to minimize imports and exports in domestic markets and slowly
decrease globalization.
Correct Answer:
how to maximize exports to other nations and how to defend
domestic markets against imported goods.
Incorrect. The correct answer is how to maximize exports to other nations and
how to defend domestic markets against imported goods.
10.
_______________ are most appropriate when historical data are available
and when the relationships among key variables are expected to remain the same in the
future.
Your Answer: Quantitative forecasts
Correct.

11.
Five major categories of external variables are: (1) economic forces, (2)
social and cultural forces, (3) political, governmental and legal forces, (4) technological
forces and (5) demographic forces.
Your Answer:
True
Correct Answer:
False
Incorrect. The five categories are: (1) economic forces, (2) social, cultural,
demographic, and environmental forces, (3) political, governmental, and legal forces, (4)
technological forces, and (5) competitive forces.
12.
Significant and unequal effects on companies in different industries and in
different locations come from trends in the dollar's value.
Your Answer:
True
Correct.
13.
China.

The absence of a legal system deters firms from initiating business with

Your Answer:
False
Correct Answer:
True
Incorrect. The absence of a legal system is one among several serious risks that
still deters firms from initiating business with China.
14.
Research findings suggest that approximately 36 percent of a firm's
profitability can be explained by the industry, whereas 20 percent is attributed to the
firm's internal factors.
Your Answer:
False
Correct.

15.
Nine out of 10 large companies have employees dedicated solely to
gathering competitive intelligence.
Your Answer:
False
Correct Answer:
True
Incorrect. Nine out of 10 large companies have employees dedicated solely to
gathering competitive intelligence.
16.

Acquisition is essential to growth in the most competitive companies.

Your Answer:
True
Correct Answer:
False
Incorrect. Acquisition is essential to growth; the most successful purchases are in
niches that add a technology or a related market.
17.
Bargaining power of consumers is usually the most powerful of Porter's
five competitive forces.
Your Answer:
False
Correct.
18.
Many large multinational firms are moving out of EU member-countries
into Switzerland and Ireland to avoid costs associated with tax harmonization.
Your Answer:
False
Correct Answer:
True
Incorrect. Many large multinational firms are moving out of EU membercountries into Switzerland and Ireland to avoid costs associated with tax harmonization.

19.
Poor infrastructure and little respect for legal contracts are two risks that
still restrain firms from initiating business with China.
Your Answer:
True
Correct.
20.
Based on the best information at the time, assumptions serve as
checkpoints on the validity of strategies.
Your Answer:
False
Correct Answer:
True
Incorrect. Based on the best information at the time, assumptions serve as
checkpoints on the validity of strategies.
21.
Identify the five broad categories of external forces. Which two do you
think are the most important for a firm that specializes in government contracts for the
military? Support your response.
Your Answer:
sdas
The five broad categories include economic forces; social, cultural, demographic,
and environmental forces; political, governmental, and legal forces; technological forces;
and competitive forces. The two that would likely be most directly important to a firm
that did government contract work to support the military would be technological forces
and the political, governmental, and legal forces. Students should refer to key external
forces on page 83 for more information.
22.
Briefly explain the rationale behind the industrial organization (I/O)
approach to competitive advantage. Do you agree with this approach?
Your Answer:
sa
In the first part of the answer, students should explain that the I/O approach

advocates that external (industry) factors are more important that internal factors in a firm
achieving competitive advantage. Competitive advantage is determined largely by
competitive positioning within an industry. In the second part of the response, students
should demonstrate an understanding of the I/O view as separate and distinct from other
views on competitive advantage.
23.
Explain the importance of technological forces for a firm. Identify some
recent technological forces that have been factors in how companies compete in a
particular industry and explain how those forces affected competition.
Your Answer:
sda
Revolutionary technological changes and discoveries are having a dramatic
impact on organizations. Superconductivity, for instance, has revolutionized
transportation, utility, healthcare, electrical, and computer industries. The Internet is
another example. Students should offer several examples and may refer to technological
forces on page 93 in the text for further explanation on this topic.
24.
Differentiate between market commonality and resource similarity. What
is meant by each of these terms? How are they used?
Your Answer:
asd
Market commonality and resource similarity are used to study rivalry among
competitors. Market commonality can be defined as the number and significance of
markets that a firm competes in with rivals. Resource similarity is the extent to which the
type and amount of a firm's internal resources are comparable to a rival. Students may
refer to market commonality and resource similarity on page 99 for more information
regarding this question.
25.
What is the Competitive Profile Matrix? How is it used? What factors are
included in this analysis?
Your Answer:
dsa
The Competitive Profile Matrix (CPM) identifies a firm's major competitors and
its particular strengths and weaknesses in relation to a sample firm's strategic position.
Critical success factors in a CPM include both internal and external issues. Factors often
included in this analysis include breadth of product line, effectiveness of sales
distribution, proprietary or patent advantages, location, production capacity and

efficiency, experience, union relations, technological advantages, and e-commerce

expertise. Students should refer to the Competitive Profile Matrix (CPM) on pages 111112.
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Home

Chapter 4

Chapter 4: The Internal Assessment

Chapter 4: The Internal Assessment

This activity contains 25 questions.

A firm's strengths that cannot be easily matched or imitated by competitors are

called:
external opportunities.
distinctive competencies.
special properties.
competitive ventures.

___________ can inhibit strategic management, for example, by leading

managers to miss the significance of changing external conditions.
Rules and guidelines
Culture
Market segmentation
Competitive awareness

The five functions of management are planning, organizing, _________, staffing,

and controlling.
rewarding
communicating
implementing
motivating

A standardized, detailed set of techniques and behaviors that manage anxieties but
seldom produce intended, technical consequences of practical importance is a:
ritual.
saga.
metaphor.
rite.

__________ ratios measure management's overall effectiveness as shown by the

returns generated on sales and investment.
Liquidity
Profitability
Growth
Leverage

The internal resource categories used in the resource-based approach are physical
resources, human resources, and:
financial resources.
natural resources.
technological resources.
organizational resources.

Americans place a high priority on __________ whereas many foreigners do not.

material wealth
family
relationships

silence

Staffing involves all of these activities except:

recruiting.
managing union relations.
customer analysis.
training and developing.

Which of the following ties all business functions together and provides the basis
for all managerial decisions?
Management
Marketing
Information
Technology

A _____________ receives raw material from both the external and internal
evaluation of an organization.
management information system
data transformer
quality control mechanism
process function system

In China, activities involve concern for guanxi, or personal relations.

True
False

The process of performing an internal audit closely parallels the process of

performing an external one.
True
False

The basic premise of the RBV is that the mix, type, amount, and nature of a
firm's internal resources should be considered secondarily in devising strategies that can
lead to sustainable competitive advantage.
True
False

Synergy is the 2 + 2 = 5 effect.

True
False

Sometimes an organization will pursue a backward integration strategy primarily

to gain better control over prices charged to consumers.
True
False

An opportunity analysis is an appraisal of the costs, benefits and risks associated

with decisions.
True
False

An example of activity ratios is the times-interest-earned ratio.

True
False

Capacity decisions concern the design of the physical production system.

True
False

In the value chain, total revenues minus total costs of all activities undertaken to
develop and market a product or service yields value.
True
False

Internal R&D and contract R&D are the two basic forms of R&D in
organizations.
True
False

Describe the process of performing an internal audit. What are the goals of an
internal audit?
To create paragraphs in your essay response, type <p> at the beginning of
the paragraph, and </p> at the end.

What is the resource-based view? Describe this approach to competitive

advantage and explain its general reasoning.
To create paragraphs in your essay response, type <p> at the beginning of
the paragraph, and </p> at the end.

Compare and contrast U.S. firms with European firms. Why do the management
styles, workplace norms, and other factors of work life differ in Europe from the U.S.?
To create paragraphs in your essay response, type <p> at the beginning of
the paragraph, and </p> at the end.

What does it mean for a manager to be motivating? What affects morale and
employee satisfaction?

To create paragraphs in your essay response, type <p> at the beginning of

the paragraph, and </p> at the end.

Identify and describe the Internal Factor Evaluation (IFE) Matrix. What is its
purpose in strategic management?
To create paragraphs in your essay response, type <p> at the beginning of
the paragraph, and </p> at the end.

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Chapter 4 > Chapter 4: The Internal Assessment

Date/Time Submitted:
October 27, 2008 at 1:09 AM (EDT)
Summary of Results
45% Correct of 20 scored items: 9 correct:
11 incorrect: 55%

45%

5 questions not scored. 20 scored questions.

More information about scoring

1.
A firm's strengths that cannot be easily matched or imitated by
competitors are called:
Your Answer: external opportunities.
Correct Answer:

distinctive competencies.

Incorrect. The correct answer is distinctive competencies.

2.
___________ can inhibit strategic management, for example, by leading
managers to miss the significance of changing external conditions.
Your Answer: Market segmentation
Correct Answer:

Culture

Incorrect. The correct answer is culture.

3.
The five functions of management are planning, organizing, _________,
staffing, and controlling.
Your Answer: motivating
Correct.

4.
A standardized, detailed set of techniques and behaviors that manage
anxieties but seldom produce intended, technical consequences of practical importance is
a:
Your Answer: metaphor.
Correct Answer:

ritual.

Incorrect. The correct answer is ritual.

5.
__________ ratios measure management's overall effectiveness as
shown by the returns generated on sales and investment.
Your Answer: Growth
Correct Answer:

Profitability

Incorrect. The correct answer is profitability.

6.
The internal resource categories used in the resource-based approach are
physical resources, human resources, and:
Your Answer: organizational resources.
Correct.
7.
do not.

Americans place a high priority on __________ whereas many foreigners

Your Answer: silence

Correct Answer:

material wealth

Incorrect. The correct answer is material wealth.

8.

Staffing involves all of these activities except:

Your Answer: customer analysis.

Correct.

9.
Which of the following ties all business functions together and provides
the basis for all managerial decisions?
Your Answer: Information
Correct.
10.
A _____________ receives raw material from both the external and
internal evaluation of an organization.
Your Answer: process function system
Correct Answer:

management information system

Incorrect. The correct answer is management information system.

11.

In China, activities involve concern for guanxi, or personal relations.

Your Answer:
True
Correct.
12.
The process of performing an internal audit closely parallels the process of
performing an external one.
Your Answer:
True
Correct.
13.
The basic premise of the RBV is that the mix, type, amount, and nature of
a firm's internal resources should be considered secondarily in devising strategies that
can lead to sustainable competitive advantage.
Your Answer:
False
Correct.

14.

Synergy is the 2 + 2 = 5 effect.

Your Answer:
False
Correct Answer:
True
Incorrect. Synergy refers to the 2 + 2 = 5 effect.
15.
Sometimes an organization will pursue a backward integration strategy
primarily to gain better control over prices charged to consumers.
Your Answer:
False
Correct.
16.
An opportunity analysis is an appraisal of the costs, benefits and risks
associated with decisions.
Your Answer:
False
Correct Answer:
True
Incorrect. An opportunity analysis is an appraisal of the costs, benefits and risks
associated with decisions.
17.

An example of activity ratios is the times-interest-earned ratio.

Your Answer:
False
Correct.
18.
Your Answer:
True

Capacity decisions concern the design of the physical production system.

Correct Answer:
False
Incorrect. Process decisions concern the design of the physical production system.
19.
In the value chain, total revenues minus total costs of all activities
undertaken to develop and market a product or service yields value.
Your Answer:
False
Correct Answer:
True
Incorrect. In the value chain, total revenues minus total costs of all activities
undertaken to develop and market a product or service yields value.
20.
Internal R&D and contract R&D are the two basic forms of R&D in
organizations.
Your Answer:
False
Correct Answer:
True
Incorrect. The two basic forms of R&D in organizations are internal R&D and
contract R&D.
21.
Describe the process of performing an internal audit. What are the goals of
an internal audit?
Your Answer:
asda
The process of performing an internal audit closely parallels the process of
performing an external audit. The internal audit requires gathering and assimilating
information about the firm's management, marketing, finance/accounting,
production/operations, research and development, and management information systems
operations. Key factors should be prioritized so that the firm's most important strengths
and weaknesses can be determined collectively. Students may refer to the process of
performing an internal audit on page 123.

22.
What is the resource-based view? Describe this approach to competitive
advantage and explain its general reasoning.
Your Answer:
das
The RBV approach to competitive advantage contends that internal resources are
more important for a firm than external factors in achieving and sustaining competitive
advantage. According to its proponents, organizational performance will primarily be
determined by internal resources that can be grouped into three all-encompassing
categories: physical, human, and organizational resources. Students may refer to the
Resource-Based View (RBV) on page 125.
23.
Compare and contrast U.S. firms with European firms. Why do the
management styles, workplace norms, and other factors of work life differ in Europe
from the U.S.?
Your Answer:
sa
In Europe, most workers are unionized and enjoy more frequent vacations and
holidays than U.S. workers. A 90-minute lunch break plus 20-minute morning and
afternoon breaks are common in European firms. Also, guaranteed permanent
employment is commonly a part of the typical European employment contract. Students
can refer to U.S. versus foreign cultures on page 128 for more information.
24.
What does it mean for a manager to be motivating? What affects morale
and employee satisfaction?
Your Answer:
as
Motivating can be defined as the process of influencing people to accomplish
specific objectives. Motivation explains why some people work hard and others do not.
The motivating function of management includes at least four major components:
leadership, group dynamics, communication, and organizational change. Refer to
motivating on page 134 for more information.
25.
Identify and describe the Internal Factor Evaluation (IFE) Matrix. What is
its purpose in strategic management?
Your Answer:

as
The IFE Matrix is a strategy-formulation tool that summarizes and evaluates the
major strengths and weaknesses in the functional areas of a business. It also provides a
basis for identifying and evaluating relationships among those areas. The IFE Matrix is
developed in five steps. The last step is to sum the weighted scores for each variable to
determine the total weighted score for the organization. Students can refer to pages 157158 in the section on the IFE Matrix for more information.
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Chapter 5

Chapter Quiz

Chapter Quiz
This activity contains 25 questions.

__________ is based on the belief that the true measure of a really good strategist is the
ability to solve problems.
Managing by subjective
Managing by extrapolation
Managing by crisis
Managing by hope
Long-term objectives are needed at the ____________ of an organization.
Corporate and divisional levels
Corporate levels
Corporate, divisional, and functional levels
Divisional and functional levels

Many, if not most, organizations pursue a:

Concentric diversification.
Combination strategy.
Geographic strategy.
Product development strategy.
An example of _____________ strategy is establishing Web sites to sell products directly
to consumers.
Backward integration
Conglomerate diversification
Horizontal integration
Forward integration
Which of the following is not a guideline for pursuing liquidation?
When divestiture has not been successful
When an organization's only alternative is bankruptcy
When the stockholders of the firm can minimize their losses by selling the firm's assets
When the organization has successfully pursued retrenchment
A popular strategy that occurs when two or more companies form a temporary
partnership for the purpose of capitalizing on some opportunity is called a(n):
Merger.
Joint venture.
Acquisition.
Takeover.
All of the following situations are conducive to market penetration except _________.
When current markets are not saturated with a particular product or service
When the usage rate of present customers could be increased significantly
When increased economies of scale provide major competitive advantages
When the correlation between dollar sales and dollar marketing expenditures historically
has been low
______________ is selling a division of an organization.
Franchising
Divestiture
Liquidation
Horizontal integration

______________ strategy can be especially effective when price competition among rival
sellers is especially vigorous and most buyers use the product in the same ways.
Differentiation
Focus
Cost leadership
Market penetration

Managing by subjective is also referred to as the mystery approach to decision

making.
True
False

To successfully employ a focus strategy, a firm must ensure that its total costs
across its overall value chain are lower than competitors' total costs.
True
False

The overall aim of the Balanced Scorecard is to balance financial objectives with
strategic objectives.
True
False

High-velocity change is becoming more the rule rather than the exception.
True
False

Chapter 9 bankruptcy applies to farmers.

True
False

Joint ventures are being used increasingly because they allow companies to
minimize risk.
True
False

Concentric diversification strategy is effective when an organization has a weak

management team.
True
False

Pioneering new and better technologies is an action based on the strategic posture
of leading change.
True
False

An acquisition occurs when a large organization purchases a smaller firm, whereas a

merger occurs when two organizations of about equal size unite to form one enterprise.
True
False

Cost advantage refers to the benefits a firm may achieve by entering a new market or
developing a new product or service prior to rival firms.
True
False
What are long-term objectives? Describe their purpose within various levels of an
organization.
Compare market penetration, market development, and product development. Give an
example of each intensive strategy.

What are the diversification strategies? Describe the two general types of
diversification strategies and explain when each type is appropriate.
To create paragraphs in your essay response, type <p> at the beginning of
the paragraph, and </p> at the end.

What is differentiation? When would a firm pursue a differentiation strategy?

Give an example of a firm that uses differentiation.
To create paragraphs in your essay response, type <p> at the beginning of
the paragraph, and </p> at the end.

What is business-process outsourcing (BPO)? For what reasons would companies

choose to outsource their functional operations?
To create paragraphs in your essay response, type <p> at the beginning of
the paragraph, and </p> at the end.

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Site Title:

Strategic Management: Concepts and Cases, 11E

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Chapter 5 > Chapter Quiz

Date/Time Submitted:
October 27, 2008 at 1:11 AM (EDT)
Summary of Results
45% Correct of 20 scored items: 9 correct:
11 incorrect: 55%

45%

5 questions not scored. 20 scored questions.

More information about scoring

1.
__________ is based on the belief that the true measure of a really good
strategist is the ability to solve problems.
Your Answer: Managing by subjectives
Correct Answer:

Managing by crisis

Incorrect. The correct answer is managing by crisis.

2.

Long-term objectives are needed at the ____________ of an organization.

Your Answer: corporate and divisional levels

Correct Answer:

corporate, divisional, and functional levels

Incorrect. The correct answer is corporate, divisional, and functional levels.

3.

__________ bankruptcy applies to municipalities.

Your Answer: Chapter 11

Correct Answer:

Chapter 9

Incorrect. The correct answer is Chapter 9.

4.

Many, if not most, organizations pursue a:

Your Answer: concentric diversification.

Correct Answer:

combination strategy.

Incorrect. The answer is combination strategy.

5.
An example of _____________ strategy is establishing Web sites to sell
products directly to consumers.
Your Answer: conglomerate diversification
Correct Answer:

forward integration

Incorrect. The correct answer is forward integration.

6.

Which of the following is not a guideline for pursuing liquidation?

Your Answer: When the stockholders of the firm can minimize their losses by selling the
firm's assets
Correct Answer:

When the organization has successfully pursued retrenchment

Incorrect. Liquidation would be appropriate in this situation. The correct answer is

when an organization has successfully pursued retrenchment.
7.
A popular strategy that occurs when two or more companies form a
temporary partnership for the purpose of capitalizing on some opportunity is called a(n):
Your Answer: joint venture.
Correct.
8.
_________.

All of the following situations are conducive to market penetration except

Your Answer: when the usage rate of present customers could be increased significantly
Correct Answer:
when the correlation between dollar sales and dollar marketing
expenditures historically has been low
Incorrect. This is conducive to market development. The correct answer is when
the correlation between dollar sales and dollar marketing expenditures historically has
been low.

9.

______________ is selling a division of an organization.

Your Answer: Horizontal integration

Correct Answer:

Divestiture

Incorrect. The correct answer is divestiture.

10.
______________ strategy can be especially effective when price
competition among rival sellers is especially vigorous and most buyers use the product in
the same ways.
Your Answer: Differentiation
Correct Answer:

Cost leadership

Incorrect. The correct response is cost leadership strategy.

11.
Managing by subjective is also referred to as the mystery approach to
decision making.
Your Answer:
True
Correct.
12.
To successfully employ a focus strategy, a firm must ensure that its total
costs across its overall value chain are lower than competitors' total costs.
Your Answer:
False
Correct.
13.
The overall aim of the Balanced Scorecard is to balance financial
objectives with strategic objectives.
Your Answer:
False
Correct.

14.

High-velocity change is becoming more the rule rather than the exception.

Your Answer:
True
Correct.
15.

Chapter 9 bankruptcy applies to farmers.

Your Answer:
False
Correct.
16.
Joint ventures are being used increasingly because they allow companies
to minimize risk.
Your Answer:
False
Correct Answer:
True
Incorrect. Joint ventures and cooperative arrangements are being used
increasingly because they allow companies to improve communications and networking,
to globalize operations, and to minimize risk.
17.
Concentric diversification strategy is effective when an organization has a
weak management team.
Your Answer:
True
Correct Answer:
False
Incorrect. Concentric diversification is effective when an organization has a
strong management team.
18.

Pioneering new and better technologies is an action based on the strategic

posture of leading change.

Your Answer:
True
Correct.
19.
An acquisition occurs when a large organization purchases a smaller firm,
whereas a merger occurs when two organizations of about equal size unite to form one
enterprise.
Your Answer:
True
Correct.
20.
Cost advantage refers to the benefits a firm may achieve by entering a new
market or developing a new product or service prior to rival firms.
Your Answer:
False
Correct.
What are long-term objectives? Describe their purpose within various levels of an
organization.
Long-term objectives represent the results expected from pursuing certain strategies. The
time frame for objectives and strategies (actions to be taken to accomplish long-term
objectives) should be consistent, usually from two to five years. Objectives should be
quantitative, measurable, realistic, understandable, challenging, hierarchical, obtainable,
and congruent among organizational units. They are needed at the corporate, divisional,
functional, and operational levels.
Compare market penetration, market development, and product development. Give an
example of each intensive strategy.
Market penetration is seeking increased market share for present products or services in
present markets through greater marketing efforts. Market development comes with
introducing present products or services into new geographic areas. Product development
is seeking increased sales by improving present products or services or developing new
ones.

What are the diversification strategies? Describe the two general types of diversification
strategies and explain when each type is appropriate.
There are two general types of diversification strategies: related and unrelated.
Businesses are related when their value chains possess competitively valuable, crossbusiness strategic fits. Businesses are said to be unrelated when their value chains are so
dissimilar that no competitively valuable, cross-business relationships exist. Most
companies favor related diversification strategies in order to capitalize on synergies..
What is differentiation? When would a firm pursue a differentiation strategy? Give an
example of a firm that uses differentiation.
Differentiation is one of Michael Porter's generic strategies. It is a strategy aimed at
producing products and services considered unique industry-wide and directed at
consumers who are relatively price-insensitive. Students should provide an example of a
firm that uses differentiation and give support for their responses. See Michael Porter's
five generic strategies on pages 188-191.
What is business-process outsourcing (BPO)? For what reasons would companies choose
to outsource their functional operations?
Business-process outsourcing, or BPO, is a rapidly growing new business that involves
companies taking over the functional operations, such as HR or payroll, of other firms.
Companies are choosing to outsource their functional operations more and more for
several reasons: (1) it is less expensive, (2) it allows the firm to focus on its core
businesses, and (3) it enables the firm to provide better services. There are other
advantages to the strategy as well. Students may refer to outsourcing on page 201.