Exam

Name___________________________________

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
1) Under the phase of strategic management, strategic information is available to
A) people throughout the organization.
B) operational personnel.
C) middle management.
D) the top-management responsible for decision-making.
E) none of the above
2) The corporate mission is best described by which one of the following?
A) A statement of corporate objectives.
B) The philosophy of the founder.
C) A description of top-management's responsibilities.
D) The purpose or reason for the corporation's existence.
E) A description of the activities carried out by the organization.
3) Which one of the following is an example of a narrow scope?
A) computers (vs office equipment)
B) transportation (vs railroads)
C) health care (vs hospitals)
D) real estate (vs apartments)
E) telecommunications (vs television)
4) Which of the following is an example of a mission?
A) Increase sales by 10% over last year.
B) Diversify product line to appeal to more people.
C) Divide a sales region into a group of sales districts.
D) Develop and sell quality appliances worldwide.
E) Pay highest salaries to keep high quality employees.
5) For many large corporations the typical strategic planning staff has just fewer than how many people?
A) 5

B) 7

C) 10

D) 3

6) The New York Stock Exchange (NYSE) requires corporations to have

A) a majority of the board be outsiders.
B) at least two outside directors providing stockholder representation.
C) cumulative voting.
D) an audit committee composed entirely of independent, outside members.
E) at least one employee director as a representative on the board.

E) 15

7) Under what circumstances does an INDIRECT interlocking directorate exist?

A) occurs when one or more individuals on one board also serves on a board of a second firm
B) present when all board members are also employed by the corporation
C) occurs when two corporations have directors who serve on the board of a third firm
D) when both management and the board establish corporate strategic management
E) the inclusion of a corporation's employees on its board
8) According to the text, the majority of outside directors are members of all BUT ONE of the following groups:
A) stockbrokers.
B) active or retired CEOs.
C) former government officials.
D) bankers.
E) professors.
9) When the pressure for coordination is strong and the pressure for local responsiveness is weak for
multinational corporations within a particular industry, the industry will be
A) consolidated.
B) global.
C) multidomestic.
D) risky.
E) indigenous.
10) Which barrier to entry uses cost advantages NOT easily imitated by new entrants such as patents on
proprietary product knowledge or government subsidies?
A) economies of scale
B) switching costs
C) cost disadvantages independent of size
D) capital requirements
E) government policy
11) An industry dominated by a few large firms, all of which struggle with product differentiation, is known as
A) worldwide.
B) multidomestic.
C) indigenous.
D) global.
E) consolidated.

12) According to the text, which one of the following is NOT descriptive of a corporation's culture?
A) Corporate culture norms are created which define acceptable behavior from top-management to operative
employee.
B) Corporate cultures are only temporary and can be easily changed.
C) A collection of beliefs, expectations, and values learned and shared by corporation's members and
transmitted from one generation of employees to another.
D) Cultures have a powerful influence on the behavior of managers and can strongly affect a corporation's
ability to shift its strategic direction.
E) Myths and rituals often emerge over time to explain why a certain aspect of the culture is important.
13) In order to move through a product's development stage, companies like Motorola and Chrysler are using
A) task forces.
B) concurrent engineering.
C) cross-functional work teams.
D) advisory committees.
E) continuous engineering.
14) The approach to internal scanning and organizational analysis which examines the nature and extent of the
synergies that do or do not exist between the internal activities of a corporation is called
A) 7-S framework.
B) S.W.O.T.
C) PIMS.
D) functional analysis.
E) corporate value chain analysis.
15) According to Porter, the competitive strategy that applies to the ability of the corporation or its business unit to
design, produce, and market a comparable product more efficiently than its competitors is called
A) lower cost.
B) competitive scope.
C) diversification.
D) differentiation.
E) concentration.
16) According to the eight dimensions of quality, a product's overall reputation is referred to as
A) reliability.
B) performance.
C) durability.
D) status.
E) perceived quality.

17) Which of Porter's competitive strategies support a low cost position to give the company a defense against
rivals while allowing it to earn profits during times of heavy competition?
A) differentiation focus
B) differentiation
C) competitive advantage
D) cost focus
E) cost leadership
18) Which strategy involves giving up management of the firm to the courts in return for some settlement of the
corporation's obligations?
A) consolidation
B) divestment
C) bankruptcy
D) diversification
E) liquidation
19) Which external growth strategy occurs when a corporation is completely absorbed as an operating subsidiary
or division of the acquiring firm?
A) acquisitions
B) mergers
C) strategic alliances
D) diversification
E) concentration
20) The "Personal Pair" system was developed by
A) Gap.

B) Lands End.

C) Mattel.

D) Levi.

E) Old Navy.

21) A committee composed of employees at least two to three echelons below the executive level strategy
committee and whose duty is to propose what the company should do differently is referred to as
A) strategy shadow committee.
B) scenario constructionists.
C) sales presentation.
D) board of directors.
E) devil's advocate.
22) Objectives which are personal and subjective and are typified by an entrepreneurial spirit describe what stage
of corporate development?
A) Stage I company
B) Stage II company
C) Stage III company
D) Stage IV company
E) Stage V company

23) The text indicated that after PepsiCo decided to concentrate on supermarkets where Pepsi had its greatest sales,
Frito-Lay increased its market share by ________%.
A) 20

B) 15

C) 2

D) 10

E) 8

24) If a planned strategy is fully compatible with the company's current culture, what should the organization do?
A) Move forward very carefully by introducing small steps and modifications before full implementation.
B) Find a joint-venture partner or contract with another company to carry out the strategy.
C) Manage around the culture by establishing a new structural unit to implement the new strategy.
D) Implement the new strategy and identify how it is superior to the old strategy in achieving the mission.
E) none of these
25) Which one is NOT one of Malekzadeh and Nahavandi's four general methods of managing disparate cultures?
A) separation
B) segmentation
C) integration
D) assimilation
E) deculturation
26) According to Peter and Waterman in their book, In Search of Excellence, which type of companies have only a
few formal objective controls?
A) corporations in multidomestic industries
B) the poorest managed companies
C) those companies with a corporate culture which supports the company's strategies
D) those companies with a strongly-held bureaucratic corporate culture
E) corporations in global industries
27) A type of responsibility center which is primarily used in sales regions is a(an)
A) expense center.
B) standard cost center.
C) profit center.
D) revenue center.
E) investment center.
28) Which of the following is an example of an objective?
A) Develop and sell quality appliances worldwide.
B) Increase sales by 10% over last year.
C) Diversify product line to appeal to more people.
D) Divide a sales region into a group of sales districts.
E) Pay highest salaries to keep high quality employees.

29) According to Kohlberg, the third level of moral development, characterized by a person's adherence to an
internal moral code, is called
A) conventional.
B) preconventional.
C) essential.
D) principled.
E) fundamental.
30) The racial/ethnic group with the flattest predicted increase is
A) Hispanics.
B) American Indians.
C) Blacks.
D) Asians.
E) Whites.
31) The PRIMARY task of the manager of information systems is to
A) design and manage the flow of information in a corporation to improve productivity and decision making.
B) prevent unlawful usage of the information from the system.
C) monitor the input of information into the information system.
D) ensure that only those who have authorized permission have access to the information system.
E) make sure the information contained in the system is up-to-date and accurate.
32) According to the text, market opportunities that management must always be on the look out for are called
A) strategic windows.
B) business opportunisms.
C) critical openings.
D) situational occasions.
E) crucial moments.
33) The rate of joint venture formation between U.S. companies and international partners has been growing
________ annually since 1985.
A) 7%

B) 37%

C) 27%

D) 5%

E) 17%

34) Which type of pricing takes advantage of the demand curve while the product is still novel and competitors are
few?
A) loss-leader pricing
B) demand pricing
C) competitive pricing
D) penetration pricing
E) skim pricing

35) Which of the following is NOT descriptive of a network structure?

A) The network structure provides an organization with increased flexibility and adaptability to cope with
rapid technological changes.
B) Independent inventors and entertainment companies often use the network structure.
C) The network structure is particularly suited to coping with the shifting patterns of international trade and
competition.
D) The network organization is a series of independent firms or business units linked together through
design, production, and marketing.
E) The network structure typically is located in a large, single building or areas with many work projects in
operation on the site.
36) Successful prospector firms tend to be headed by CEOs with backgrounds in the areas of
A) accounting/finance, manufacturing/production, and general management.
B) purchasing and logistics.
C) marketing/sales.
D) human resources and strategy.
E) research/engineering and general management.
37) Which of the following is NOT a guideline for proper control?
A) Long-term as well as short-term controls should be used.
B) Controls should be timely so that corrective actions can be taken before it is too late.
C) Control should involve only a minimum of information.
D) Emphasize the reward of meeting or exceeding standards rather than punishment for failing to meet
standards.
E) Controls should measure all activities in order to be comprehensive.
38) Which of the following is NOT a part of strategy implementation?
A) budgets
B) programs
C) performance evaluation
D) procedures
E) none of these
39) Which country pioneered the use of worker participation on corporate boards?
A) England

B) France

C) Germany

D) Japan

E) Sweden

40) Which type of international industry manufactures and sells the same products with only minor adjustments
made for individual countries around the world?
A) indigenous industry
B) multidomestic industry
C) global industry
D) worldwide industry
E) consortium industry

41) According to the text, the current trend regarding unions is that
A) corruption and scandal will continue to taint their existence.
B) U.S. membership is generally declining.
C) they are experiencing a renewed sense of power.
D) they have lessening significance for the management of multinational corporations.
E) they are maintaining an adversarial position to try to hold onto their membership.
42) A tactic is defined by the text as
A) the first company to manufacture and sell a new product or service.
B) a specific operating plan specifying how a strategy is to be implemented in terms of how, when, and where
it is to be put into action.
C) any action by a company or business unit that provides a direct or indirect indication of its intentions,
motives, goals, or internal situation.
D) the ability to adapt a product or delivery system more closely to buyers' needs.
E) policies which link formulation and implementation of the strategy.
43) As defined by the text, synergy is the concept
A) that supports the acquisition of one corporation by another.
B) that involves adding different products or divisions to the corporation.
C) that two firms can generate more profits together than separately.
D) that two functional areas of a corporation can coordinate their work as a team.
E) that a corporation can enter one or more businesses that are necessary to manufacture its own product.
44) Which type of pricing attempts to hasten market development and offers the pioneer the opportunity to utilize
the experience curve to gain market share and dominate the industry?
A) skim pricing
B) demand pricing
C) loss-leader pricing
D) competitive pricing
E) penetration pricing
45) The theory that structure follows strategy was developed by
A) Alfred Porter.
B) Michael Chandler.
C) Alfred Drucker.
D) Alfred Chandler.
E) Peter Chandler.
TRUE/FALSE. Write 'T' if the statement is true and 'F' if the statement is false.
46) A hierarchy is a group of strategy types by level in the organization.
47) A code of ethics denotes how employees should behave on the job.
48) An industry matrix summarizes the key success factors within a particular industry.

49) Mass customization is the low-cost production of individually customized goods and services.
50) Differentiation concentrates on a particular buyer group, product line segment, or geographic market.
51) Corporate parenting is the coordination of cash flow among units.
52) The importance of sole sourcing was supported by Michael Porter.
53) When using a network structure, many corporate activities are outsourced.
54) One component of an effective action plan is the determination of the expected financial and physical
consequences of each action.
55) Benchmarking is a concept that is decreasing in popularity.
56) Globalization is the internationalization of markets and corporations.
57) Corporation stakeholders are all constituencies that are affected by the achievement of the firm's objectives.
58) One of the possible barriers to entry is product differentiation.
59) R&D intensity is a principal means of decreasing marketing share in global competition.
60) The TOWS Matrix illustrates how the external opportunities and threats facing a particular corporation can be
matched with that company's internal strengths and weaknesses to result in four sets of possible strategic
alternatives.