Q&A Hero

Q: Using a Grand Strategy Matrix approach, what strategies are recommended for a firm that is a weak competitor in a slow-growing market? Elaborate on what these strategies could mean for a college or university.

Q: The process whereby a firm determines the costs associated with organizational activities from purchasing raw materials to manufacturing products to marketing those products is called A) the resource-based approach. B) value chain analysis. C) strategic cost analysis. D) the internal factor evaluation matrix. E) cost-benefit analysis.

Q: Which component of a mission statement addresses the basic beliefs, values, aspirations, and ethical priorities of the firm? A) Technology B) Philosophy C) Concern for public image D) Customers E) Self-concept

Q: American firms that seem insulated from foreign competition today may be vulnerable tomorrow.

Q: Evaluating strategies on a continuous rather than on a periodic basis allows benchmarks of progress to be established and more effectively monitored.

Q: Explain the benefits and limitations of developing a Boston Consulting Group Matrix.

Q: ________ become(s) ________ only when evaluated, filtered, condensed, analyzed, and organized for a specific purpose, problem, individual, or time. A) Information; data B) Information; material C) Data; information D) Data; competitive advantages E) Competitive advantages; material

Q: Which component of a mission statement addresses the firm's distinctive competence or major competitive advantage? A) Technology B) Philosophy C) Concern for public image D) Customers E) Self-concept

Q: Foreign banks currently operate and compete in most parts of the United States.

Q: Regardless of the size of the organization, a certain amount of "management by wandering around" at all levels is essential to effective strategy evaluation.

Q: Compare and contrast the IE Matrix with the BCG Matrix.

Q: An effective information management system ________ information in such a way that it answers important operating and strategic questions. A) collects B) codes C) stores D) synthesizes E) all of the above

Q: Effective mission statements can vary in A) length. B) content. C) format. D) specificity. E) all of the above

Q: One aspect of the global challenge faced by U.S. business involves the complications of having to deal with two or more monetary systems.

Q: Competitive advantages normally are the result of superiority in one of three areas: feasibility, consistency, or consonance.

Q: In a BCG Matrix, all divisions are classified as either Question Marks, Stars, Cash Cows, or Dogs. Define each of these terms.

Q: ________ ties all business functions together and provides the basis for all managerial decisions. A) Management B) Marketing C) Information D) Technology E) Workforce

Q: Which of the following illustrates the self-concept component of a mission statement? A) To earn our customer's loyalty, we listen to them, anticipate their needs, and act to create value in their eyes. B) We are committed to leapfrogging ongoing competition within 1,000 days by unleashing the constructive and creative abilities and energies of each of our employees. C) Our emphasis is on North American markets, although global opportunities will be explored. D) To compensate its employees with remuneration and fringe benefits competitive with other employment opportunities in its geographical area and commensurate with their contributions toward efficient corporate operations. E) In this respect, the company will conduct its operations prudently and will provide the profits and growth which will assure our ultimate success.

Q: Weaknesses of competitors in foreign lands are often underestimated, and strengths are often overestimated.

Q: Strategies may be inconsistent if policy problems and issues continue to be brought to the top for resolution.

Q: Give five coordinates of a SPACE Matrix directional vector that would suggest conservative strategies to be most appropriate.

Q: ________ is a commonly used approach to determine R&D budget allocations. A) Financing as many project proposals as possible B) Using the percentage of sales method C) Budgeting for R&D about what competitors spend D) Deciding how many successful new products are needed E) All of the above

Q: The following excerpt from a mission statement illustrates which of the nine essential components of a mission statement? "We believe our first responsibility is to the doctors, nurses, patients, mothers, and all others who use our products and services." A) Markets B) Customers C) Concern for Employees D) Concern for Public Image E) Technology

Q: Keeping informed about the number and the nature of competitors is easier when doing business internationally.

Q: The decreasing time span for which planning can be done with any degree of certainty is a reason strategy evaluation is more difficult today.

Q: If you construct a SPACE Matrix and the directional vector points to the lower left quadrant, what type of strategies would you recommend? Give several examples.

Q: Where is the largest seaport, in terms of ship container traffic processed annually? A) Hong Kong B) Shanghai C) Singapore D) Los Angeles E) New York

Q: An effective mission statement should do all of the following EXCEPT A) include monetary amounts, numbers, percentages and ratios B) be inspiring C) reveal that the firm is environmentally responsible D) identify the utility of a firm's products E) be reconciliatory

Q: Language, culture, and value systems differ among countries, which can create barriers to communication and problems managing people.

Q: Strategy evaluation is becoming increasingly easier with the passage of time, given technological advances.

Q: Explain the concept of matching in the strategy formulation framework. Give at least three examples of matching.

Q: In most industries, the major costs of producing a product or service are incurred within A) marketing. B) management. C) research and development. D) operations. E) management information systems.

Q: What question is asked in conjunction with the philosophy component of a mission statement? A) What are the firm's major products or services? B) Is the firm committed to growth and financial soundness? C) What are the basic beliefs, values, aspirations, and ethical priorities of the firm? D) Is the firm responsive to social, community, and environmental concerns? E) Are employees a valuable asset of the firm?

Q: The availability, depth, and reliability of economic and marketing information in different countries vary extensively.

Q: Consistency, distinctiveness, advantage, and feasibility are Richard Rumelt's four criteria for evaluating a strategy.

Q: All of the following are principles of good organizational governance, as established by Business Week, EXCEPT A) Each director attends at least 75 percent of all meetings. 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 three directors are current or former company executives. E) The CEO is not also the Chairperson of the Board.

Q: ________ management deals with inputs, transformations, and outputs that vary across industries and markets. A) Marketing B) Financial C) Research and development D) Production/operations E) Information systems

Q: The recommended length of an effective mission statement is ________ words. A) approximately 25 B) no more than 100 C) less than 250 D) at least 300 E) more than 500

Q: Firms are often motivated to initiate international operations because competitors in foreign markets may not exist, or competition may be less intense than in domestic markets.

Q: According to Rumelt, consistency and feasibility are largely based on a firm's internal assessment.

Q: Today, boards of directors are composed mostly of A) outsiders. B) management. C) union members. D) company employees. E) company stockholders.

Q: According to Roger Schroeder, which basic function within production/operations deals with aggregate planning and scheduling? A) Capacity B) Inventory C) Workforce D) Transportation E) Quality

Q: All of the following utility statements are relevant in developing a mission statement EXCEPT A) Do not offer me shoes. Offer me comfort for my feet and the pleasure of walking. B) Do not offer me furniture. Offer me comfort and the quietness of a cozy place. C) Do not offer me ideas, emotions, ambience, feelings, and benefits. Offer me things. D) Do not offer me books. Offer me hours of pleasure and the benefit of knowledge. E) Do not offer me clothes. Offer me attractive looks.

Q: Although a firm's power and prestige in domestic markets may be significantly enhanced when the firm competes globally, this rarely translates into improved negotiating power among creditors, suppliers, or distributors.

Q: According to Richard Rumelt, consonance and consistency are mostly based on a firm's external assessment.

Q: The act of oversight and direction for an organization is referred to as A) corporate lawmaking. B) centralized control. C) organizational direction. D) establishing norms. E) governance.

Q: The times-interest-earned ratio would be classified as a(n) A) activity ratio. B) leverage ratio. C) profitability ratio. D) liquidity ratio. E) growth ratio.

Q: Which of these examples of a mission statement's focus area does NOT identify the utility of the firm's products to its customers? A) AT&T focuses on communication rather than telephones. B) ExxonMobil focuses on oil and gas rather than energy. C) Union Pacific focuses on transportation rather than railroads. D) Universal Studios focuses on entertainment rather than movies. E) Starbucks focuses on the caf experience rather than coffee.

Q: A potential advantage to initiating, continuing, or expanding international operations is that foreign operations can absorb excess capacity, reduce unit costs, and spread economic risks over a wider number of markets.

Q: Strategy evaluation should have a long-run focus and avoid a short-run focus.

Q: Which tactic emphasizes that a successful outcome is more important than imposing the method of achieving it? A) Generalization B) Satisfying C) Focus on higher-order issues D) Equifinality E) Specialization

Q: Which ratio is calculated by dividing profits before interest and taxes by total interest charges? A) Inventory turnover B) Fixed assets turnover C) Total assets turnover D) Debt-to-equity ratio E) Times-interest-earned ratio

Q: Good mission statements identify the ________ of a firm's products to its customers. A) utility B) price C) profit margin D) demand E) popularity

Q: Although growth in revenues and profits is a common expectation of shareholders, it is not a measure of organizational success.

Q: Too much emphasis on evaluating strategies may be expensive and counterproductive.

Q: What tactic involves shifting focus from specific issues to more general ones? A) Equifinality B) Focus on Higher-Order Issues C) Generalization D) Satisfying E) None of the above

Q: Which ratio would be considered an activity ratio? A) Debt-to-equity B) Net profit margin C) Average collection period D) Earnings per share E) Current ratio

Q: An effective mission statement does all of the following EXCEPT A) it reflects judgments about future growth directions that are based upon forward-looking external and internal analyses B) it provides useful criteria for selecting among alternative strategies C) it provides a basis for generating and screening strategic options D) it is static in orientation E) it should be enduring

Q: Perhaps the greatest advantage of international operations to a firm is the ability to gain new customers for its products and services, thus increasing revenues.

Q: Adequate and timely feedback is important to effective strategy evaluation.

Q: ________ includes the set of shared values, beliefs, attitudes, customs, norms, personalities, heroes and heroines that describe a firm. A) Strategy B) Culture C) Mission D) Objectives E) QSPM

Q: What category of ratios measures how effectively a firm can maintain its economic position in the growth of the economy and industry? A) Profitability B) Liquidity C) Leverage D) Activity E) Growth

Q: According to McGinnis, a mission statement should be all of the following EXCEPT A) it should be specific enough to control creative growth B) it should be stated in clear terms C) it should distinguish an organization from all others D) it should define what an organization is E) it should serve as a framework for evaluating both current and prospective activities

Q: Strategists in multinational corporations are often confronted with the need to be globally competitive and nationally responsive at the same time.

Q: Most strategists believe that an organization's well being depends on evaluation of the strategic-management process.

Q: Which of these is a limitation of QSPM? A) Only a few strategies can be evaluated simultaneously. B) It is prohibitively expensive. C) It requires intuitive judgments and educated assumptions. D) Sets of strategies must be examined in reverse order. E) It requires equal participation from the entire organization.

Q: What category of ratios includes return on total assets and return on stockholders' equity? A) Leverage B) Activity C) Profitability D) Growth E) Liquidity

Q: In developing a mission statement, arousing emotion A) is not a benefit. B) is futile. C) is important. D) should be avoided if possible. E) is counterproductive.

Q: It is possible to obtain insurance from the U.S. government 's OPIC to eliminate all risks associated with doing business internationally.

Q: What is the highest number of strategies that can be examined at one time with the QSPM? A) 1 B) 2 C) 5 D) 10 E) There is no limit.

Q: What category of ratios measures a firm's ability to meet maturing short-term obligations? A) Profitability B) Liquidity C) Leverage D) Activity E) Growth

Q: In order to appeal to its diverse stakeholders, an effective mission statement should be A) inflammatory. B) provocative. C) contentious. D) reconciliatory. E) dysfunctional.

Q: Before entering international markets, firms should do research to try and diminish the risk of doing business in new markets.

Q: Discuss some ways in which management information systems can benefit a company.

Q: What term is defined as the product of multiplying the weights by the Attractiveness Scores in each row of the QSPM? A) Total Attractiveness Scores B) Sum Total Scores C) Weighted Scores D) Total Weighted Scores E) Factors

Q: Which of the three finance/accounting decisions concerns determining the best capital structure for the firm and includes examining various methods by which the firm can raise capital? A) Investment B) Dividend C) Financing D) Capital budgeting E) Implementation

Q: The general public is especially interested in ________, whereas stockholders are more interested in ________. A) environmental concerns; social responsibility B) social responsibility; the treatment of employees C) the treatment of employees; environmental concerns D) profitability; social responsibility E) social responsibility; profitability

Q: With the rise in world commerce, government regulatory bodies are no longer able to closely monitor foreign business practices.

Q: Discuss guidelines used to determine whether a firm should conduct R&D internally or externally.

Q: Which of the following is the first step in developing a 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 firm's key external opportunities/threats and internal strengths/weaknesses in the left column of the QSPM.