Capstone 1
Midterm 1 study guide
- 1.
Functional managers
- A.
Are responsible for the specific business functions or operations that constitute a company or one of its divisions.
- B.
Look at the overall picture of a corporation.
- C.
Have no strategic role.
- D.
Formulate generic strategies.
- E.
Execute business-level decisions.
Correct Answer
A. Are responsible for the specific business functions or operations that constitute a company or one of its divisions. -
- 2.
An important first step in the process of formulating a company's mission is to
- A.
Describe the technological processor.
- B.
Identify the customer segment served by the company.
- C.
Answer the question, "What is our business?"
- D.
Decide what the company will be like ten years from now.
- E.
Evaluate the company's most recent performance.
Correct Answer
C. Answer the question, "What is our business?" -
- 3.
The primary goal of a SWOT analysis is to
- A.
Benchmark a company's performance.
- B.
Force managers to think creatively rather than analytically.
- C.
Forecast future events.
- D.
Develop short-run goals.
- E.
Create, affirm, or fine-tune a company-specific business model.
Correct Answer
E. Create, affirm, or fine-tune a company-specific business model. -
- 4.
A component of strategy implementation is
- A.
Designing the best organization structure, culture, and control systems to put a strategy into action.
- B.
Enumerating the number and kind of periodic reports that must be submitted by functional-level managers.
- C.
Analyzing the macroeconomic environment of the company
- D.
Answering the question, "What is our business?"
- E.
E) all of the above. all of the above.
Correct Answer
A. Designing the best organization structure, culture, and control systems to put a strategy into action. -
- 5.
The strategies that a company's managers pursue
- A.
Have a major impact on the company's performance relative to its competitors.
- B.
Have little or no effect on overall profitability.
- C.
Typically result in higher per-unit cost of production.
- D.
Result in significant industry structural changes
- E.
None of the above.
Correct Answer
A. Have a major impact on the company's performance relative to its competitors. -
- 6.
A sustained competitive advantage
- A.
Enables a company to maintain above-average projects for a number of years.
- B.
Cannot be maintained for more than three years.
- C.
Is seldom possible in today's highly competitive environment.
- D.
Typically arises out of unforeseen economic events.
- E.
A and D.
Correct Answer
A. Enables a company to maintain above-average projects for a number of years. -
- 7.
Scenario-based planning is a technique for coping with the problem of
- A.
Uncertainty.
- B.
Planning equilibrium.
- C.
Bottom-up planning.
- D.
Strategic fit.
- E.
Cognitive bias.
Correct Answer
A. Uncertainty. -
- 8.
Aaron planned to cut prices at his bicycle shop, but when a competing shop began to offer free repairs, Aaron decided to copy them. Aaron's new strategy (offer free repairs) is an example of a(n)
- A.
Mistake.
- B.
Emergent strategy.
- C.
Deliberate strategy.
- D.
Intended strategy.
- E.
Unrealized strategy.
Correct Answer
A. Mistake. -
- 9.
The fit model of strategy formulation and implementation
- A.
Was proposed and supported by Prahalad and Hamel.
- B.
Is not useful because the future is uncertain.
- C.
Is useful for both intended and emergent strategies.
- D.
Can give a company a sustainable competitive advantage.
- E.
Focuses more on the current situation than on the future situation.
Correct Answer
E. Focuses more on the current situation than on the future situation. -
- 10.
The role of corporate-level managers is to
- A.
Define operational-level strategies.
- B.
Outline functional-level strategies and plans.
- C.
Oversee the development of strategies for the whole organization.
- D.
Develop business-level strategies
- E.
Oversee the development of business-level and functional-level strategies
Correct Answer
C. Oversee the development of strategies for the whole organization. -
- 11.
Which of the following is not a characteristic of emotional intelligence?
- A.
Self-awareness
- B.
Self-regulation
- C.
Self-esteem
- D.
Empathy
- E.
Social skills
Correct Answer
C. Self-esteem -
- 12.
A company's mission
- A.
Lays out the desired future state of the company.
- B.
Outlines the manner in which employees and managers should conduct themselves.
- C.
Defines the manner in which strategies will be developed and attained.
- D.
Describes what the company does.
- E.
Answers the question, "What will our business become?"
Correct Answer
D. Describes what the company does. -
- 13.
Holly owns a landscape company and is thinking about expanding her services to include outdoor water features (waterfalls, streams, ponds). If, before making this decision, she looks at the experience of similar firms that have added outdoor water features, she is employing
- A.
Wishful thinking
- B.
Aqua-evaluation
- C.
Devil's advocacy
- D.
Outside view
- E.
Dialectic inquiry
Correct Answer
D. Outside view -
- 14.
A competitive advantage is considered to be a sustained competitive advantage when the
- A.
Advantage endures for a long time.
- B.
Firm is able to spread the advantage to all of its business units.
- C.
Advantage is very large.
- D.
Advantage was gained at a low cost.
- E.
Managers who developed the advantage are still employed at the firm.
Correct Answer
A. Advantage endures for a long time. -
- 15.
The scenario approach to strategic planning involves
- A.
Devising strategies for coping with a number of different possible future states of the world
- B.
Homing in on a single prediction of future demand conditions using an iterative planning process
- C.
Functional managers setting key corporate objectives
- D.
Using computers to build virtual worlds for top-level managers.
- E.
Making planning the exclusive domain of top-level managers
Correct Answer
A. Devising strategies for coping with a number of different possible future states of the world -
- 16.
General managers are found
- A.
Only at the corporate level
- B.
Only at the business level.
- C.
Only at the functional and business levels
- D.
At the functional, business, and corporate levels
- E.
Only at the corporate and business levels.
Correct Answer
E. Only at the corporate and business levels. -
- 17.
Devil's advocacy
- A.
Is simpler than the expert approach
- B.
Is vulnerable to the groupthink phenomenon
- C.
Results in unproductive conflict
- D.
Involves one group member being responsible for questioning the assumptions of a plan.
- E.
Results in a final plan that is a combination of a plan and a counterplan
Correct Answer
D. Involves one group member being responsible for questioning the assumptions of a plan. -
- 18.
Systematic errors in the decision-making process are caused by
- A.
Inadequate information.
- B.
Information overload.
- C.
Cognitive biases on the part of decisionmakers.
- D.
Poor data collection procedures.
- E.
All of the above.
Correct Answer
A. Inadequate information. -
- 19.
Sam Walton wanted Wal-Mart to keep costs low. Therefore, as an example to others, he drove his own car and furnished his office with plain, steel desks. In this case, Mr. Walton was displaying his
- A.
Commitment.
- B.
Vision.
- C.
Astute use of power.
- D.
Emotional intelligence
- E.
Eloquence
Correct Answer
A. Commitment. -
- 20.
Which of the following is not a cognitive bias?
- A.
Escalating commitment
- B.
Reasoning by analogy
- C.
Ivory tower thinking
- D.
Representativeness
- E.
Illusion of control
Correct Answer
C. Ivory tower thinking -
- 21.
Profit growth is best measured
- A.
By the increase in shareholder value
- B.
By the return on investment
- C.
Month by month
- D.
Over time.
- E.
By increases in liquidity
Correct Answer
A. By the increase in shareholder value -
- 22.
Maximizing shareholder value is
- A.
A byproduct of a company's cost reduction programs.
- B.
Not generally a viable goal for a company
- C.
Not the responsibility of a company's managers
- D.
The ultimate goal of profit-making companies
- E.
Not required to attract risk capital
Correct Answer
D. The ultimate goal of profit-making companies -
- 23.
Vice President Chung is responsible for executing decisions about human resources. Mr. Chung is
- A.
A corporate-level general manager
- B.
Both a corporate- and business-level general manager.
- C.
A business-level general manager.
- D.
A functional manager.
- E.
A corporate-level, business-level, and functional manager.
Correct Answer
D. A functional manager. -
- 24.
An emergent strategy is
- A.
The result of a planned strategy
- B.
An unplanned response to unforeseen circumstances.
- C.
The product of careful top-down planning mechanisms.
- D.
The same as a realized strategy.
- E.
A group response to a problem area.
Correct Answer
B. An unplanned response to unforeseen circumstances. -
- 25.
Strategic implementation involves
- A.
Taking actions at the functional, business, and corporate levels.
- B.
Comparing company performance with leading companies in the industry.
- C.
Analyzing the macroenvironment for any last-minute changes that may have occurred
- D.
Only activities at the corporate level.
- E.
All of the above
Correct Answer
A. Taking actions at the functional, business, and corporate levels. -
- 26.
Jeffrey Pfeffer believes that a manager's political power comes from his or her control over
- A.
Employees' paychecks.
- B.
The firm's strategic vision.
- C.
Organizational resources.
- D.
Internal communication channels.
- E.
The company's website.
Correct Answer
C. Organizational resources. -
- 27.
The first step in the strategic management process is to
- A.
Analyze the competitive environment.
- B.
Examine the organizational structure to see what changes may be required.
- C.
Analyze internal strengths.
- D.
Analyze internal weaknesses.
- E.
Select the corporate mission and major corporate goals.
Correct Answer
E. Select the corporate mission and major corporate goals. -
- 28.
Strategy formulation refers to the
- A.
Task of designing organizational structures and control systems.
- B.
Process by which strategies are put into action.
- C.
Top-down planning process that gives rise to the implementation of emergent strategies.
- D.
Task of analyzing an organization's external and internal environment and then selecting an appropriate strategy.
- E.
Process of choosing a realized strategy
Correct Answer
D. Task of analyzing an organization's external and internal environment and then selecting an appropriate strategy. -
- 29.
Competition from industry to industry
- A.
Is normally the same in all industries.
- B.
Is characterized by different competitive conditions in different industries
- C.
Does not vary over time
- D.
Cannot be measured.
- E.
None of the above.
Correct Answer
B. Is characterized by different competitive conditions in different industries -
- 30.
In the typical scenario planning exercise,
- A.
Most scenarios are pessimistic.
- B.
Most scenarios are optimistic.
- C.
Some scenarios are optimistic and some scenarios are pessimistic.
- D.
Only worst-case outcomes should be considered.
- E.
Only best-case outcomes should be considered.
Correct Answer
C. Some scenarios are optimistic and some scenarios are pessimistic. -
- 31.
Well-constructed goals should
- A.
Be precise and measurable.
- B.
Address specific issues.
- C.
Be bounded by a particular time period.
- D.
Be all of the above.
- E.
A and B.
Correct Answer
D. Be all of the above. -
- 32.
Which of the following cognitive biases occurs when decisionmakers commit even more resources if they receive feedback that the project is failing?
- A.
Prior hypothesis bias
- B.
Reasoning by analogy
- C.
Illusion of control
- D.
Escalating commitment
- E.
Representativeness
Correct Answer
D. Escalating commitment -
- 33.
Which of the following is the organization's principal general manager?
- A.
Board of directors
- B.
Division head
- C.
CFO
- D.
CEO
- E.
Controller
Correct Answer
D. CEO -
- 34.
Feelings of personal responsibility for a project are most likely to lead to
- A.
Prior hypothesis biases
- B.
Escalating commitment.
- C.
Reasoning by analogy.
- D.
Representativeness.
- E.
Groupthink.
Correct Answer
B. Escalating commitment. -
- 35.
Strategic leadership is about
- A.
Strategy formulation.
- B.
Strategy implementation.
- C.
How to effectively manage a company's strategy and create competitive advantage
- D.
Establishing effective contract processes.
- E.
Reducing a company's operating costs
Correct Answer
C. How to effectively manage a company's strategy and create competitive advantage -
- 36.
An effective business model
- A.
Involves how a company selects its customers.
- B.
Creates value for its customers.
- C.
Achieves and sustains a high level of profitability.
- D.
Produces goods and services.
- E.
All of the above.
Correct Answer
E. All of the above. -
- 37.
Good strategic leaders
- A.
Possess a willingness to delegate and empower subordinates.
- B.
Control all facets of decision making.
- C.
Are confident in their ability to make sound decisions without consulting others
- D.
Assure uniformity of purpose through the exercise of power
- E.
Have the ability to be inconsistent when the situation requires inconsistency
Correct Answer
A. Possess a willingness to delegate and empower subordinates. -
- 38.
Betsy Holden is the head of Kraft Foods, a division of the Philip Morris Company. Which of the following is not likely to be one of Ms. Holden's responsibilities?
- A.
Turning corporate-level strategy into action
- B.
Defining Philip Morris's mission
- C.
Deciding how to compete in the foods industry
- D.
Supervising functional-level managers
- E.
Developing a business-level strategy
Correct Answer
B. Defining Philip Morris's mission -
- 39.
Matching an organization's structure and control systems to the requirements of a company's strategy is
- A.
Part of strategy implementation
- B.
Part of the SWOT analysis.
- C.
Facilitated through the feedback loop.
- D.
Part of internal analysis.
- E.
All of the above.
Correct Answer
A. Part of strategy implementation -
- 40.
Within a diversified company, the responsibilities of corporate-level strategic managers include
- A.
Translating the corporate mission statement into concrete strategies for individual business units.
- B.
Closely supervising the formulation of strategies at the functional level that support the company's business- and corporate-level strategies.
- C.
Allocating resources to functions within business units.
- D.
Overseeing the development of strategies for the total organization and allocating resources among its different business areas.
- E.
Identifying and establishing relationships with supplier firms.
Correct Answer
D. Overseeing the development of strategies for the total organization and allocating resources among its different business areas. -
- 41.
Due to a recent relaxation in pollution standards, Ford Motors is withdrawing its electric-powered cars from sales in the U.S. market. Ford is responding to a change in which of the following macroenvironmental forces?
- A.
Economic
- B.
Demographic
- C.
Political and legal
- D.
Social
- E.
Strategic
Correct Answer
C. Political and legal -
- 42.
The extent of rivalry among established companies is lowest when
- A.
The industry's product is a commodity.
- B.
Demand is growing rapidly.
- C.
Exit barriers are substantial.
- D.
The industry is entering a decline stage.
- E.
The industry is dominated by a small number of large companies.
Correct Answer
B. Demand is growing rapidly. -
- 43.
Which of the following is not one of the factors in the economic forces of the macroenvironment?
- A.
Interest rates
- B.
Inflation
- C.
Regulation
- D.
Currency exchange rates
- E.
Economic growth rate
Correct Answer
C. Regulation -
- 44.
The bargaining power of an industry's suppliers is greater when
- A.
The supply industry is fragmented.
- B.
Switching costs are high.
- C.
The industry buys in large quantities.
- D.
Many substitutes are available.
- E.
Firms in the industry can threaten backward vertical integration.
Correct Answer
B. Switching costs are high. -
- 45.
Which of the following industry structures consists of a large number of small and medium-sized companies, none of which is in a position to determine industry price?
- A.
Fragmented industry
- B.
Consolidated industry
- C.
Oligopoly
- D.
Monopoly
- E.
Sector
Correct Answer
A. Fragmented industry -
- 46.
Which of the following is not one of Porter's five forces, as proposed in his original model?
- A.
Threat of complementors
- B.
Bargaining power of suppliers
- C.
Rivalry among established companies
- D.
Threat of new entrants
- E.
Threat of market changes
Correct Answer
E. Threat of market changes -
- 47.
A market segment is a group of
- A.
Customers within a market that can be different from each other on the basis of their distinct attributes and specific demands.
- B.
Companies that produce similar goods or services.
- C.
Customers within a market that purchase goods or services in similar quantities.
- D.
Customers within a market that have similar levels of profitability.
- E.
None of the above.
Correct Answer
A. Customers within a market that can be different from each other on the basis of their distinct attributes and specific demands. -
- 48.
Julian is asked to examine the demographic environment facing his employer, a clothing manufacturer. Which of the following should Julian examine?
- A.
Government regulations
- B.
Inflation
- C.
Manufacturing technology
- D.
Aging of the population
- E.
Society's growing interest in exercise
Correct Answer
D. Aging of the population -
- 49.
Economies of scale may arise from
- A.
Cost reductions gained through mass production
- B.
Discounts on bulk purchases of raw material inputs and component parts.
- C.
Advantages gained by spreading production costs over a large production volume
- D.
Cost savings associated with spreading marketing and advertising costs over a large volume of output.
- E.
All of the above.
Correct Answer
E. All of the above. -
- 50.
Which of the following industry structures is dominated by a small number of large companies?
- A.
Fragmented industry
- B.
Consolidated industry
- C.
Oligopoly
- D.
Monopoly
- E.
Sector
Correct Answer
A. Fragmented industry -
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Oct 13, 2014Quiz Edited by
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