67

CHAPTER 4
The Internal Assessment
Multiple Choice
The Nature of an Internal Audit
1.

A firms strengths that cannot be easily matched or imitated by competitors are

called
a.
internal audits.
b.
distinctive competencies.
c.
external audits.
d.
special properties.
e.
internal properties.
Ans: b

2.

Who should perform an internal audit?

a.
A private auditing firm
b.
The organizations accounting department
c.
Managers from different units of the organization
d.
A team of top-level managers and lower-level employees
e.
The chief executive officer
Ans: c

3.

Page: 115

Page: 116

_______ exemplifies the complexity of relationships among the functional areas of

business.
a.
Government audit
b.
External audit
c.
Financial ratio analysis
d.
Environmental scanning
e.
Distribution strategy
Ans: c

Page: 116

The Resource Based Web

4.

The internal resource categories used in the resource-based approach are physical
resources, human resources and
a.
financial resources.
b.
shareholder resources.
c.
organizational resources.
d.
natural resources.

68

e.
Ans: c
5.

Page: 117

Organizational resources include all of the following except:

a.
employee training.
b.
firm structure.
c.
planning processes.
d.
information systems.
e.
copyrights.
Ans: a

6.

technological resources.

Page: 117

Empirical indicators are resources that are either rare, hard to imitate, or
a.
expensive.
b.
inexpensive.
c.
easily substitutable.
d.
not easily substitutable.
e.
inefficient.
Ans: d

Page: 117

Integrating Strategy and Culture

7.

A pattern of behavior developed by an organization as it learns to cope with its

problems of external adaptation and internal integration that has worked well
enough to be considered valid and to be taught to new members as the correct
way to perceive, think and feel is called
a.
dysfunctional behavior.
b.
groupthink.
c.
behavior modification.
d.
organizational culture.
e.
internal audit effect.
Ans: d

8.

Page: 118

Which of the following is not a cultural product?

a.
Rites
b.
Emotions
c.
Rituals
d.
Sagas
e.
Symbols
Ans: b

Page: 118

69

9.

A standardized, detailed set of techniques and behaviors that manage anxieties,

but seldom produce intended, technical consequences of practical results are
called
a.
folktales.
b.
rites
c.
metaphors
d.
rituals
e.
values
Ans: d
Page: 119

10.

What are historical narratives describing the unique accomplishments of a group

and its leaders, usually in heroic terms.
a.
rites
b.
sagas
c.
stories
d.
myths
e.
folktales
Ans: b

11.

Life-directing attitudes that serve as behavioral guidelines are called

a.
values.
b.
rites.
c.
beliefs
d.
metaphors
e.
legend
Ans: a

12.

Page: 119

Page: 119

In Europe, it is generally true that the farther __________ on the continent, the
more participatory the management style.
a.
south
b.
east
c.
west
d.
north
e.
southeast
Ans: d

Page: 120

70

13.

Americans place an exceptionally high priority on __________ whereas many

foreigners place more worth on __________.
a.
time; relationships
b.
relationships; time
c.
silence; time
d.
silence; relationships
e.
close personal distance; ample personal distance
Ans: a

Page: 122

Management
14.

What is the essential bridge between the present and the future that increases the
likelihood of achieving desired results?
a.
Motivating
b.
Planning
c.
Controlling
d.
Staffing
e.
Organizing
Ans: b

15.

All of the following are basic duties of a manager except:

a.
staffing.
b.
planning.
c.
consolidating.
d.
organizing.
e.
motivating.
Ans: c

16.

Page: 123

Page: 123

What is an up-front investment in success?

a.
Planning
b.
Organizing
c.
Motivating
d.
Staffing
e.
Controlling
Ans: a

Page: 123

71

17.

Which function of management includes areas such as job design, job specification,
job analysis and unity of command?
a.
planning
b.
organizing
c.
motivating
d.
staffing
e.
controlling
Ans: b

18.

Who does a planning horizon of two to five years applies to?

a.
top management
b.
general management
c.
middle management
d.
lower management
e.
all levels of management
Ans: a

19.

Page: 124

Synergy is
a.
synthetic energy.
b.
when a team effort is used to achieve desired results.
c.
when individuals work separately to achieve desired results.
d.
when financial expectations of the firm are decided upon.
e.
employee energy.
Ans: b

20.

Page: 124

Page: 125

Which management function includes breaking tasks into jobs, combining jobs to
form departments and delegating authority?
a.
motivating
b.
staffing
c.
organizing
d.
controlling
e.
planning
Ans: c

Page: 125

72

21.

Which function of management is concerned with span of control and chain of

command?
a.
planning
b.
organizing
c.
controlling
d.
directing
e.
evaluating
Ans: b

22.

Which of the following is the process of influencing people to accomplish specific

objectives?
a.
Staffing
b.
Motivating
c.
Planning
d.
Controlling
e.
Organizing
Ans: b

23.

Page: 126

_______ is a major component in motivation.

a.
Forecasting
b.
Organizational structure
c.
Recruiting
d.
Management development
e.
Communication
Ans: e

24.

Page: 125

Page: 126

Staffing involves all of these activities except:

a.
recruiting.
b.
transferring.
c.
customer analysis.
d.
managing union relations.
e.
training and developing.
Ans: c

Page: 127

73

25.

Which function of management includes all of those activities undertaken to ensure

actual operations conform to planned operations?
a.
Planning
b.
Organizing
c.
Motivating
d.
Staffing
e.
Controlling
Ans: e

26.

The first step in the controlling function of management is to

a.
take corrective actions.
b.
restrict breaks employees take.
c.
evaluate expense reports.
d.
establish performance standards.
e.
measure individual and organizational performance.
Ans: d

27.

Page: 127

Page: 127

All of the following are key questions that can reveal internal strengths and
weaknesses in the management department except:
a.
Is the organizations structure appropriate?
b.
Are reward and control mechanisms effective?
c.
Are the organizations products positioned well among competing products?
d.
Does the firm use strategic management concepts?
e.
Do managers delegate authority well?
Ans: c

Page: 128

Marketing
28.

Opportunity analysis is one of the basic functions of

a.
marketing.
b.
management.
c.
computer information systems.
d.
production/operations.
e.
research and development.
Ans: a

Page: 128

74

29.

_______ can reveal the demographic characteristics of an organizations customers.

a.
Customer profiling
b.
Test marketing
c.
Market development
d.
The vision statement
e.
Telemarketing
Ans: a

30.

________ is not considered to be a function of marketing.

a.
Market segmentation
b.
Marketing research
c.
Customer analysis
d.
Opportunity analysis
e.
Distribution
Ans: a

31.

Page: 129

What marketing function includes test marketing?

a.
selling products/services
b.
pricing
c.
customer analysis
d.
product/service planning
e.
distributing
Ans: d

33.

Page: 128

Selling includes all of these marketing activities except:

a.
advertising.
b.
dealer relations.
c.
customer analysis.
d.
publicity.
e.
sales promotion.
Ans: c

32.

Page: 128

Page: 129

The Robinson-Patman Act affects a companys

a.
pricing methods.
b.
trucking methods.
c.
cost of products.
d.
employee costs.
e.
culture.
Ans: a

Page: 129

75

34.

Distribution includes
a.
customer analysis.
b.
pricing.
c.
warehousing.
d.
advertising.
e.
test marketing.
Ans: c

Page: 130

Opportunity Analysis
35.

Which of the following is not a key question that can reveal internal strengths and
weaknesses of the marketing department?
a.
Does the firm have an effective sales organization?
b.
Is our product quality good?
c.
Are markets segmented effectively?
d.
Are the firms products and services priced appropriately?
e.
Does the firm have good liquidity?
Ans: e

Page: 132

Finance/Accounting
36.

Which of these is the allocation and reallocation of capital and resources to projects,
products, assets and divisions of an organization?
a.
Investment decision
b.
Dividend decisions
c.
Financing decisions
d.
Restructuring decisions
e.
Strategic decision
Ans: a

37.

Page: 133

Which decision concerns determining the best capital structure for the firm and
includes examining various methods by which the firm can raise capital.
a.
investment
b.
dividends
c.
financing
d.
capital budgeting
e.
implementation
Ans: c

Page: 133

76

38.

What category of ratios measures a firms ability to meet maturing short-term

obligations?
a.
Profitability
b.
Liquidity
c.
Leverage
d.
Activity
e.
Growth
Ans: b

39.

What category of ratios includes return on total assets and return on stockholders
equity?
a.
leverage
b.
activity
c.
profitability
d.
growth
e.
liquidity
Ans: c

40.

Page: 135

Page: 135

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
Ans: e

Page: 135

Production/Operations
41.

According to Roger Schroeder, which of the following is not a basic function of

production management?
a.
Capacity
b.
Inventory
c.
Workforce
d.
Transportation
e.
Quality
Ans: d

Page: 139

77

42.

_______ 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.
Distribution
Ans: d

Page: 139

Research and Development

43.

______ has been successful in determining 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 have been used
Ans: e

Page: 143

Management Information Systems

44.

Which of the following ties all business functions together and provides the basis for
all managerial decisions?
a.
Management
b.
Marketing
c.
Information
d.
Technology
e.
Workforce
Ans: c

45.

Page: 144

A management __________ receives raw material from both the external and
internal evaluation of an organization.
a.
advisor
b.
information system
c.
consultant
d.
strategic system
e.
accountant
Ans: b

Page: 144

78

46.

__________ become(s) __________ only when they are 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
Ans: c

Page: 144-145

The Value Chain

47.

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.
Ans: b

48.

Page: 146

The initial step to implementing value chain analysis is

a.
attaching a cost to each discrete activity.
b.
establishing costs in terms of time.
c.
establishing costs in terms of money.
d.
converting the cost data into information by looking for competitive cost
strengths and weaknesses.
e.
dividing a firms operations into specific activities or business processes.
Ans: e

Page: 146-147

The IFE Matrix

49.

Which of the following is the first step in developing an IFE Matrix?

a.
Determining the organizations structure
b.
Summing the weighted scores for each variable
c.
Identifying the organizations strengths and weaknesses
d.
Identifying the organizations functions of business
e.
Determining the lead strategist
Ans: c

Page: 147

79

50.

The IFE Matrix should be _____________ in multidivisional firms.

a.
constructed for each division
b.
all-inclusive
c.
constructed only for the major divisions
d.
developed before the EFE Matrix
e.
revised monthly
Ans: a

Page: 148