Chapters 5-7 Bus 137

_____ helps an organization prepare for situations that might occur.

a. allocating
b. planning
c. marketing
d. leading

b. planning
A document that outlines a proposed firm’s goals, its strategy for achieving standards for measuring success is known as a(n) ______.

a. business plan
b. mission statement
c. vision statement
d. strategic plan

a. business plan
Corey is preparing the business model for his necktie manufacturing facility. Which of the following should he include?

a. the way the company will determine if its is successful
b. the company’s strategy for making its sales goals
c. the overall goals of the necktie company
d. how the neckties will be marketed

d. how the neckties will be marketed
Nordstrom has committed to providing a large shoe department in its stores and customers know they can find any type of shoe they want when they shop there. This is an example of a large-scale action plan that sets the direction for Nordstrom stores. It is an example of a company

a. tactical plan.
b. operational plan.
c. SMART goal.
d. strategy.

d. strategy
Strategic ______ is a process that involves managers from all levels of the organization in the formulation and the implementation of strategies and strategic goals.

a. evaluation
b. analysis
c. governance
d. management

d. management
As a company undertakes strategic management, which three groups should be involved?

suppliers
shareholders
first-line managers
distributors
middle managers
top managers

first-line managers, middle managers, top managers
The _____ statement expresses the purpose of an organization.

a. mission
b. vision
c. tactical
d. operational

a. mission
A mission statement addresses which of the following questions?

a. Which industry are we in?
b. What do we want to become?
c. How should we operate our company?
d. What is our reason for being?

d. What is our reason for being?
The vision statement answers which one of the following questions?

a. Where should we locate?
b. What is our reason for being?
c. What do we want to become?
d. How much profit do we want to make?
e. How many people should we hire?

c. What do we want to become?
Which type of planning determines what an organization’s long-term goals should be for the next 1-5 years with the resources it expects to have available?

a. Operational
b. Strategic
c. Tactical
d. Temporary

b. Strategic
The three types of planning performed by management include strategic, tactical, and _______ planning.

a. managerial
b. developmental
c. operational
d. accountable

c. operational
Which type of planning refers to determining what contributions departments or similar work units can make with their given resources during the next 6-24 months?

a. Operational
b. Tactical
c. Strategic

b. Tactical
True or false: Top managers perform operational planning.
False
Which type of planning refers to determining how to accomplish specific tasks with available resources within the next 1-52 weeks?

a. Operational
b. Tactical
c. Strategic

a. Operational
In business, a specific commitment to achieve a measurable result within a stated period of time is called a(n)

a. plan.
b. goal.
c. tactic.
d. strategy.

b. goal.
What are the three types of goals used in planning that become the hierarchy for the means-end chain?

– executive
– placement
– strategic
– operational
– tactical

– strategic
– operational
– tactical
What document guides long-term goals?

a. operating plan
b. strategic plan
c. ten-year plan
d. management plan

b. strategic plan
As a general rule, ______ managers establish tactical goals and focus on the actions needed to achieve the strategic goals of the organization.

a. middle
b. low-level
c. top
d. first-line

a. middle
Which live of management is typically charged with establishing operational goals that are concerned with short-term matters?

a. Middle managers
b. Team leaders
c. Top managers
d. First-line managers

d. First-line managers
A(n) ______ plan defines the course that is needed to achieve the stated goal.

a. vision
b. mission
c. operating
d. action

d. action
A SMART goal is one that is specific, measurable, result-oriented, and has specific target dates.

a. applicable
b. attainable
c. adaptable
d. actuarial

b. attainable
______ is a four-step process in which managers and employees jointly set objectives, develop action plans, review performance, and appraise and reward employees.

a. Management by objectives
b. Single-use plans
c. Smart goals
d. Means-end chain
e. Procedures

a. Management by objectives
Which of the following would be included in a firm’s business model? Mark all that apply.

– The firm’s proposed goals
– The firm’s standards for measuring success
– The firm’s expected revenues and expenses
– A description of the industry the firm is entering

– The firm’s expected revenues and expenses
– A description of the industry the firm is entering
Management by objectives (MBO) is a process that includes which of the following?

– managers and employees periodically review employee performance
– managers and employees jointly set objectives for the employee
– action plans are developed by managers
– employees are rewarded according to their performance
– managers inform employees of their individual goals

– managers and employees periodically review employee performance
– managers and employees jointly set objectives for the employee
– action plans are developed by managers
– employees are rewarded according to their performance
Corey is preparing the business model for his necktie manufacturing facility. Which of the following should be include?

a. the company’s strategy for making its sales goals
b. how the neckties will be marketed
c. the way the company will determine if it is successful
d. the overall goals of the necktie company

b. how the neckties will be marketed
Which of the following are the steps that make up the planning portion in the planning/control cycle?

– Control the direction by comparing results with the plan
– Carry out the plan
– Control the direction by taking corrective actions
– Make the plan

– Carry out the plan
– Make the plan
Which of the following is developed for activities that are not likely to be repeated in the future?

a. a procedure
b. a rule
c. a single-use plan
d. a standing plan

c. a single-use plan
Place the steps of the planning/ control cycle in the correct order, with the first step listed at the top and the final step listed at the bottom.
1. Make the plan
2. Carry out the plan
3. Control the direction by comparing results with the plan
4. Control the direction by correcting deviations and/or improving future plans
A standing plan that designates specific required action, such as “Hardhats required beyond this point” is known as a ______.
rule
The operating plan defines how the actions plan will be conducted. Which of the following would be found in the operating plan?

– revenues
– advertising campaign
– market share
– sales plan
– cash flow

– revenues
– market share
– cash flow
Match the type of objective used in MBO with its example.
– Improvement objective: Decrease scrap materials by 10% within the next quarter
– Maintenance objective: Continue current production rates on custom-printed jobs
– Personal development: Attend time management training
In the ______ step of the MBO process, managers prepare an action plan for attaining identified objectives.

a. second
b. third
c. first
d. fourth

a. second
Which of the following would meet the SMART goal characteristic of specifying a target date? Check all that apply.

– Increase sales by 10% in the future
– File tax return by April 15
– Improve my grades
– Lose 10 pounds by the end of the year

– File tax return by April 15
– Lose 10 pounds by the end of the year
Identify the advantages to establishing deadlines. Check all that apply.

– Deadlines ensure excellent quality work
– Deadlines are a great motivator
– Deadlines help concentrate the mind to help you make quick deadlines
– Deadlines provide a mechanism for giving ourselves feedback

– Deadlines are a great motivator
– Deadlines help concentrate the mind to help you make quick deadlines
– Deadlines provide a mechanism for giving ourselves feedback
A ______ is a standing plan that outlines the response to particular problems or circumstances rather than giving general responses to situations.

a. prodecure
b. policy
c. rule

a. prodecure
A(n) ______ is a single-use plan encompassing a broad range of projects or activities.

a. policy
b. project
c. procedure
d. program

d. program
Which of the following would be considered single-use plans? Check all that apply.

– Procedures
– Projects
– Policies
– Rules
– Programs

– Projects
– Programs
The letter S in the acronym SMART stands for what aspect of a good goal?

a. standard
b. statistical
c. specialized
d. specific

d. specific
The first goal in Stephen’s plan was to hire several sales staff members to increase sales. What aspect of a SMART goal would this action represent?

a. the goal is results-oriented
b. the goal is relevant
c. the goal is specific
d. the goal is attainable

a. the goal is results-oriented
Which of the following are the steps that make up the control portion in the planning/ control cycle?

a. Control the direction by taking corrective actions.
b. Control the direction by comparing results with the plan.
c. Carry out the plan.
d. The organization should make the plan.

a. Control the direction by taking corrective actions.
b. Control the direction by comparing results with the plan.
The final step in management by objectives involves ______.

a. the manager making a performance appraisal and rewarding the employee according to the results
b. the manager and employee periodically reviewing the employee’s performance
c. the manager developing an action plan
d. the manager and employee jointly set objectives for the employee

a. the manager making a performance appraisal and rewarding the employee according to the results
What is the third step in management by objectives?

a. The manager and employee jointly set objectives for the employee.
b. The manager makes a performance appraisal and rewards the employee according to the results.
c. The manager develops action plans.
d. The manager and employee periodically review the employee’s performance.

d. The manager and employee periodically review the employee’s performance.
Several managers of a city messenger service wanted to improve the reliability of the service. Which of the following would correspond to creating a measurable goal?

a. stating that 85% of deliveries should be completed within 1 hour
b. stating that fewer of its deliveries should be late
c. stating that deliveries to major-business customers should be given the highest priority
d. stating that messengers should receive incentives for being on time

a. stating that 85% of deliveries should be completed within 1 hour
A(n) ______ can be a broad statement such as “we do not condone bigotry of any kind” that gives employees a general idea of what is allowable, but that does not lay out specifics.

a. policy
b. outline
c. procedure

a. policy
Sustainable competitive advantage occurs when an organization is able to get ahead and stay ahead of its competitors in which of the following areas? Check all that apply.

– Quality
– Innovation
– Pricing
– Gross sales
– Effectiveness
– Customer responsiveness

– Quality
– Innovation
– Effectiveness
– Customer responsiveness
A project is an example of which type of plan?

a. Single-use
b. Sideline
c. Stationed
d. Standing

a. Single-use
What is the first step in management by objectives?

a. Mangers and employees periodically review the employee’s performance.
b. Employees propose action plans.
c. Mangers make a performance appraisal and reward the employee according to the results.
d. Mangers and employees jointly set objectives for the employee.

d. Mangers and employees jointly set objectives for the employee.
Which three of the following are specific reasons why organizations should adopt planning and strategic management?

– It encourages new ideas.
– It enables the firm to avoid the expense of attracting new talent.
– It helps the firm develop a sustainable competitive advantage.
– It provides direction and momentum.

– It encourages new ideas.
– It helps the firm develop a sustainable competitive advantage.
– It provides direction and momentum.
In the MBO process, cascading goals are structures from top to bottom management so that they become more specific at ______ levels of the organization.

a. executive
b. higher
c. middle-managment
d. lower

d. lower
In terms of SMART goals, an “attainable” goal is ______.

a. impossible to meet
b. easily achieved by employees
c. challenging but achievable
d. one that meets cost guidelines

c. challenging but achievable
For management by objectives to be successful, which of the following must occur? (Check all that apply)

– It must be applied organizational wide
– Objectives must cascade through the organization
– It must be available in different languages
– Individual objectives should be set before departmental objectives.
– Top management must be committed

– It must be applied organizational wide
– Objectives must cascade through the organization
– Top management must be committed
According to Michael Porter, when a company does not create a(n) “______” with the way the company’s activities interact and reinforce one another toward a common goal, then there is a high likelihood of economic failure for the company.

a. conflict
b. fit
c. agreement
d. compromise

b. fit
While Starbucks sells many types of coffee products, Connie’s Coffee House only sells one type of coffee. The two companies are both selling coffee but in different ways. This is an example of ______.

a. stability strategy
b. growth strategy
c. tactical goals
d. strategic positioning

d. strategic positioning
Strategic positioning emerges from which of the following sources? Choose all that apply.

– Broad needs, many customers
– Few needs, few customers
– Few needs, many customers
– Broad needs, few customers

– Broad needs, many customers
– Few needs, many customers
– Broad needs, few customers
Place the steps in the strategic-management process in the correct order, with the first step listed at the top.
1. Establish the mission and vision
2. Assess the current reality
3. Formulate the grand strategy
4. Implement the strategy
5. Maintain strategic control
In what step of the strategic-management process is Isabella working if she is preparing the long-term goal of what her company is to become?

a. Maintain strategic control
b. Assess the current reality
c. Implement the strategy
d. Establish the mission and the vision

d. Establish the mission and the vision
Janice is trying to put into words the overall purpose of her newly-formed company. Janice is attempting to write her company’s ______ statement.

a. ethics
b. mission
c. vision
d. diversity

b. mission
Which of the following questions should be answered “yes” by a company’s vision statement? Check all that apply.

– Is it inspiring?
– Is it positive?
– Is it traditional?
– Is it formative?

– Is it inspiring?
– Is it positive?
If a company is to survive, it must keep track of what its competitors are doing through competitive ______.

a. advantage
b. strategy
c. benchmarks
d. intelligence

d. intelligence
True or false: Tom and his board of directors keep track of what is going on in Congress because some legislation affects the business environment for their company. This is an example of environmental scanning.
True
A(n) ______ analysis is a search for the strengths, weaknesses, opportunities, and threats affecting the organization.

a. trend
b. forecast
c. scenario
d. SWOT

d. SWOT
When considering SWOT analysis, which of the following is an example of an organizational weakness?

a. minimal competition
b. inferior marketing strategy
c. strong financing
d. skilled workforce

b. inferior marketing strategy
When applying SWOT analysis, which of the following demonstrates an external opportunity that the company may exploit?

a. Kevin’s insurance group received a superior rating.
b. Monica’s rare book company has weak competition.
c. Jack’s food processing plant faces strict government scrutiny.
d. Norm’s engine manufacturing facility is outdated and needs new equipment.

b. Monica’s rare book company has weak competition.
Jamie’s soda manufacturing company performed a recent SWOT analysis and forecasted that at least 40% of the population would consume more soda over the next two years. The vision of what could happen is known as a _______.

a. strategic posiiton
b. strategy
c. forecast
d. mission statement

c. forecast
Which of the following would be included in the contingency planning process?

– Different budgets
– Different past company results
– Different economic conditions
– Different strategies by competitors

– Different budgets
– Different economic conditions
– Different strategies by competitors
Anitafelt that it was important for her taxi company to continually measure itself against its best competition. She kept track of the number of rides per hour and turnaround times for all her drivers and compared it to that of the high-performing taxi group in the next town. Anita is using the process of ______ to compare her company with another.
benchmarking
Which of the following are part of Porter’s Five Competitive Forces?

– Bargaining power of suppliers
– Threat of substitute products or services
– Bargaining power of buyers
– Rivalry among competitors
– Bargaining power of new entrants

– Bargaining power of suppliers
– Threat of substitute products or services
– Bargaining power of buyers
– Rivalry among competitors
Porter’s competitive strategies include which of the following?

– Cost-focus
– Differentiation
– Single-product
– Related diversification
– Cost-leadership
– Defensive
– Focused-differentiation

– Cost-focus
– Differentiation
– Cost-leadership
– Focused-differentiation
Companies purchasing a cost-leadership strategy keep costs/ prices ______ those of competitors and target a _____ market.

a. above; narrow
b. below; narrow
c. above; wide
d. below; wide

d. below; wide
The use of brands to make a company stand out from its competitors is part of the ______ strategy.

a. planning
b. diversification
c. cost
d. differentiation

d. differentiation
Which of Porter’s four competitive strategies keep the costs, and hence prices, of a product or service below those of competitors but targets only a narrow market?

a. Cost-Leadership strategy
b. Differentiation strategy
c. Diversification strategy
d. Focused-differentiation strategy
e. Cost- focus strategy

e. Cost- focus strategy
Specialty stores with high-end products such as Cartier jewelry offer products that are of unique and superior value compared to those of competitors. This is an example of the ________-differentiation strategy, one of Porter’s competitive strategy.

a. cost-focused
b. focused
c. product
d. demand

b. focused
Which of these businesses is using a single-product strategy?

a. Fatima’s Floral Shop sells floral bouquets and fine chocolates.
b. Fiona’s Floral Shop sells only fresh-cut flowers.
c. Florence’s Floral Shop delivers floral arrangements, balloons, and will arrange for speciality food delivery.
d. Francesca’s Floral and Taxidermy shop arranges flowers with taxidermies, while also offering regular taxidermy services.

b. Fiona’s Floral Shop sells only fresh-cut flowers.
Operating several businesses in order to spread the risk is the goal of a ______ strategy.
diversification
_______ is a means of evaluating strategic business units on the basis of their business growth rates and their share of the market.

a. The BCG matrix
b. Strategic analysis process
c. Porter’s five forces model
d. SWOT analysis

a. The BCG matrix
Which of the following statements about execution are true?

– Execution is central to a company’s tactics but not its strategy.
– Execution can serve to align people with goals.
– Execution consists in part of questioning and analysis.
– Execution means achieving promised results.

– Execution can serve to align people with goals.
– Execution consists in part of questioning and analysis.
– Execution means achieving promised results.
Identify the three key principles that underlie strategic positioning.

– Strategy requires trade-offs in competing.
– Strategy involves creating a “fit” among the management team and employees.
– Strategy is the creation of a unique and valuable position in the market.
– Strategy involves creating a “fit” among all activities in the organization.
– Strategy involves only top management participating in the process.

– Strategy requires trade-offs in competing.
– Strategy is the creation of a unique and valuable position in the market.
– Strategy involves creating a “fit” among all activities in the organization.
A ______ statement describes a company’s long-term direction and strategic intent.

a. business
b. vision
c. competitive
d. strategic
e. mission

b. vision
Environmental factors that an organization may exploit for competitive advantage are called organizational _______.

a. threats
b. weaknesses
c. opportunities
d. strengths

c. opportunities
Which of Porter’s four competitive strategies offers products or services that are of unique and superior value compared to those of competitors and targets only a narrow market?

a. Cost-leadership strategy
b. Differentiation strategy
c. Focused-differentiation strategy
d. Cost-focus strategy
e. Diversification strategy

c. Focused-differentiation strategy
Which stage of the strategic management process is taking place when Stefan decides that his company must go through with building the new plant even though his production engineers think that redeveloping the existing plant is a better option?

a. formulating the grand strategy
b. strategic-implementation
c. assessing the current reality
d. establishing the mission

b. strategic-implementation
According to Bryan Barry, there are four things a manager can do to keep a strategic plan on track. Select all that apply.

– Met it up
– Engage people
– Stay positive
– Stay focused
– Keep it simple
– Keep moving

– Engage people
– Stay focused
– Keep it simple
– Keep moving
When a company puts its strategic plan into effect, it is in the process of strategy _______.

a. implementation
b. formulation
c. examination
d. control

a. implementation
Of the three core processes of business identified by Bossidy and Charan, which do they believe is the most important?

a. strategic
b. operational
c. people

c. people
True or false: According to Bossidy and Charan, an effective leader tries to develop future leaders and deal with non performers.
True
A strategy by which an organization under one ownership operates separate businesses that are similar or complementary to one another is known as a(n) _______ diversification strategy.
related
Colleen knows that peak times for the sale of her flip-flops are from June to September so she directs the warehouse to increase the stock during that time period. Which of the following would have helped Colleen make this determination?

a. trend analysis
b. BCG matrix
c. benchmarking
d. contingency planning

a. trend analysis
In which of the core processes developed by Bossidy and Charan would a company ask “Who is my competition?” and “How will my business make money on a sustainable basis?”

a. Strategy
b. Operations
c. People
d. Production

a. Strategy
Maketing, production, and sales are all involved in the core business process known as _______.

a. strategy
b. production
c. operations
d. people

c. operations
Match the BCG matrix category with its description.
– Stars: High growth and high market share
– Question marks: Risky new ventures
– Cash cows: Slow growth but high market share
– Dogs: Low growth and low market share
Experiencing new governmental regulations that reduce the availability of raw materials would be considered an organizational ________ in a SWOT analysis.
threats
What are the three advantages of related diversification?

– reduced risk
– focus
– synergy
– vulnerability
– management efficiencies
– benchmarking

– reduced risk
– synergy
– management efficiencies
In the final step of the strategic-management process, a manager might hear about a problem among a work group and decide to place a new person in charge of that group. The information the manager used to make this decision creates a _______ loop to return to an earlier step.
feedback
Which of the following are characteristics of strategy formulation? Choose all that apply.

– It is a fast process.
– It is designed to determine short-term goals.
– It is the basis for determining long-term goals.
– It is a time-consuming process.

– It is the basis for determining long-term goals.
– It is a time-consuming process.
In order to gain competitive intelligence, managers could do all of the following EXCEPT _______.

a. listen to industry gossip while talking will colleagues at a trade show
b. read a press release
c. read a report filled with the Securities and Exchange Commission
d. focus on increasing their organization’s efficiency

d. focus on increasing their organization’s efficiency
Which two of the following are forms of forecasting?

– trend analysis
– market strategies
– intelligence reports
– contingency planning

– trend analysis
– contingency planning
When analyzing the competitive forces in a firm’s environment, it is important to note that new ______ can take away customers from existing organizations.

a. suppliers
b. employees
c. entrants
d. buyers

c. entrants
Pizza Express is planning on increasing market share by increasing its delivery radius. This is part of its ______ grand strategy.

a. competitive
b. stability
c. retrenchment
d. growth
e. defensive

d. growth
Mark’s Specialty Bikes store gets customized parts for its high-end models from a local foundry, Premium Crafters. When the foundry announced a price increase, the bike store tried to switch to other local manufactures but learned that they wouldn’t be able to meet delivery schedules. Mike’s, therefore, chose to pay Crafters higher prices. Which of Porter’s competitive forces does this demonstrate?

a. Bargaining power of suppliers
b. Threats of substitute products or services
c. Bargaining power of buyers
d. Threats of new entrants

a. Bargaining power of suppliers
One of three common grand strategies, a _______ strategy (also called retrenchment strategy) involves a reduction in the organization’s efforts.
defensive
Putting strategic plans into effect is referred to as ________.
strategy implementation
Which of the following would be considered an organizational strength within a SWOT analysis?
Experiences management team
Identifying an emerging market where there are currently no competitors would be considered an organizational _______ in a SWOT analysis.
opportunity
What effect has the Internet had on Porter’s with competitive force, rivalry among competitors?
It has intensified rivalries among organizations.
When Johnson & Johnson promoted its baby shampoo as a gentle cleanser suitable for adults, it did this without changing the formation of the product. Which type of common grand strategy does this exemplify?
stability
The Internet has enabled consumers to “price shop” several retailers in order to find the best price for items such as appliances, electronics, and even cars. This has increased the consumer’s ability to better negotiate favorable prices with retailers, demonstrating which of Porter’s five competitive forces?
Bargaining power of buyers
Which one of the following would be one example of an organizational weakness based on a SWOT analysis?
Inferior product quality
In which step of the strategic-management process does the organization conduct a current reality assessment?
Step Two
Selling several products that are not related to one another under one ownership describes a(n) _______ strategy.
diversification
The growing popularity of news feeds on the Internet and online news sources such as CNN and Fox News have significantly impacted the circulation of U.S. newspapers and magazines such as Time and Newsweek. This demonstrates which of Porter’s five competitive forces?
Threats of substitute products or services
When a harsh winter caused all of his oranges to freeze, the owner of the Orange-of-the-Month Club lost all of his sales and had no other product to rely on for his business. As this demonstrates, the major risk that a single-product strategy brings to a company is ______, as there are no alternative products or services.
vulnerability
True or false: Increases in financial performance that are gained through strategic planning are equally worthwhile for both large and small companies.
False
Mancuso Incorporated is using outdated manufacturing facilities. Which a SWOT analysis, this would be an example of an organizational _______.
weakness