Multiple Choice Questions CHAPTER6

62. Developing a comprehensive program for long-term success is the focus of ____. 
A.  strategic planning

B.  mission and vision statements

C.  organizational diversity

D.  TQM

E.  a synergy agenda

63. A 2013 survey found that among managers, the use of _____ is popular. 
A.  mission and vision statements

B.  organizational diversity

C.  TQM

D.  an autocratic discipline program

E.  a synergy agenda

64. To provide direction and momentum, encourage new ideas, and develop a sustainable competitive
advantage are reasons why an organization should adopt _____. 
A.  a diversity policy

B.  a positive synergy agenda

C.  strategic management and strategic planning

D.  an aggressive cost-cutting plan

E.  a strong business plan

 
65. When an organization is able to get and stay ahead in the four areas of (1) being responsive to
customers, (2) innovating, (3) quality, and (4) effectiveness, that company can develop ____. 
A.  company diversity

B.  increased MBO

C.  strong employee morale

D.  an environment with few or no competitors

E.  a sustainable competitive advantage

66. According to Harvard Business School professor Michael Porter, strategic positioning means _____ to
achieve sustainable competitive advantage. 
A.  aggressive growth

B.  distinctive positioning

C.  collaborative planning

D.  strategic alliances

E.  retrenchment

67. Strategic position emerges from three sources: _____. 

A.  few needs, many customers; broad needs, few customers; broad needs, many customers

B.  low-cost products; huge market needs; unique products

C.  many needs, few customers; little need, many customers; narrow needs, few customers

D.  poor products available; few products available; no products available

E.  bad economy; strong economy; stable economy

 
68. Instructor Services is a technology company that offers many IT services in highly populated southern
Ohio. Services and products include computer training, support, monitoring, repair, network design,
virus removal, and software upgrades. It even sells refurbished computers. The source of Instructor
Services' strategic position is _____. 
A.  low-profit margin and many customers

B.  broad needs and few customers

C.  broad needs and many customers

D.  high-profit margin and many customers

E.  high-profit margin and few customers

69. With small businesses in very competitive industries, small differences in performance may affect that
company's survival. So in this case, it is worth the effort to implement _______. 
A.  organizational diversity

B.  a synergy agenda

C.  MBO

D.  TQM

E.  strategic planning

70. Tom is the CEO of Yost Tech, a large global manufacturing company, and he is having lunch with a
longtime friend, Greg, owner of a small office supply store. Tom told Greg that "Strategic management
and planning have really increased our success at Yost. I just read an article about an analysis of several
studies that found that strategic management and planning _____." 
A.  helps only large companies

B.  benefits mostly nonprofit organizations

C.  makes performance gains inconsistent

 D.  boosts performance in small companies even more than large companies

E.  benefits both small and large organizations

71. One report reads that big companies, such as Amazon, Google, or Apple, "are no longer content simply
to enhance part of your life. The new strategy is to build a device, sell it to consumers, and then ____." 
A.  send customers to partner retailers to supply content

B.  sell them the content to play on their device

C.  sell them the maintenance agreements for their devices

D.  find service companies to assist customers if needed

E.  focus on selling more items and devices to their friends and families

72. In the strategic-management process, the final step, maintaining strategic control, is the source of
_____. 
A.  the organizational mission

B.  strategy formulation

C.  the current reality assessment

D.  feedback and evaluation

E.  the planning process

73. In order, the steps of the strategic-management process are _____. 

A.  establish the mission and vision; assess the current reality; conduct a trend analysis; maintain the
feedback loop

B.  establish the mission; maintain strategic control; formulate the grand strategy; implement the
strategy
 C.  establish the mission and vision; assess the current reality; formulate the grand strategy;
implement the strategy; maintain strategic control

D.  establish the vision; develop a mission statement; formulate the grand strategy; implement the
strategy; maintain the feedback loop

E.  determine the strategy; carry out the strategic plans

74. The second step in the strategic-management process is to look at where the organization stands and
see what is working and what could be different to maximize efficiency and effectiveness in achieving
the organization's mission. This step is the process of completing a(n) _____. 
A.  organizational vision statement

B.  company synergy assessment

C.  current reality assessment

D.  ethical and diversity evaluation

E.  grand strategy

75. Ben attended a workshop hosted by SCORE, a SBA organization that counsels small-business owners on
developing a good vision statement. In that workshop the speakers discussed how an organization's
vision needs to describe _____. 
A.  the organization's purpose or reason for being

B.  what the company will market and its business plan

C.  the organization's purpose or reason for being and its strategic intent

D.  the ethical and diversity standards of the organization

E.  what the company wants to become, and its long-term direction and strategic intent

76. Who are our customers? What are our major products or services? In what geographic areas do we
 compete? These are all questions that are answered in a good _____. 
A.  vision statement

B.  code of ethics

C.  mission statement

D.  value pact

E.  management belief statement

77. Is it appropriate for the organization and for the times? Does it set standards of excellence and reflect
high ideals? Is it ambitious? These are all questions that are answered in a good _____. 
A.  belief agreement

B.  code of ethics

C.  mission statement

D.  vision statement

E.  management belief statement

78. The growth, stability, and defensive strategies are ____. 

A.  leadership strategies

B.  cost-leadership strategies

C.  types of differentiation plans

D.  stabilization strategies

E.  common grand strategies

79. Access Office Equipment has shifted to sales and service of laptops and PCs, and is no longer offering
 repairs on older types of office equipment because the demand for service on this equipment is low,
costly, and the profits have dropped significantly. This is an example of an organization implementing a
______.
A.  growth strategy

B.  cutting-edge strategy

C.  stability strategy

D.  defensive strategy

E.  diverse strategy

80. Organic Foods International has decided to increase its market share by hiring a marketing rep to visit
businesses in the area and invite their employees to shop at Organic Foods and for monthly health
events. The store also hired two new employees to handle the anticipated increase in customer traffic.
Organic Foods is utilizing a _____. 
A.  cutting-edge strategy

B.  stability strategy

C.  defensive strategy

D.  growth strategy

E.  diverse strategy

81. Delux Technology has a reputation of reliability and winning customer service, building this highly
respected name brand over the last 15 years. As a speaker at a business conference, Steve, the CEO of
Delux, told his audience that "We have built our reputation by changing little over the last several
years, but consistently helping customers with great, caring service and a reliable product." Delux
Technology utilizes a ____. 
A.  defensive strategy

B.  merger approach

 C.  retrenchment strategy

D.  growth strategy

E.  stability strategy

82. Over the course of 40 years, Sal grew his company to six package shipping stores. With his retirement
approaching and the increased competition, he decided to reduce the number of locations to two. Sal's
reduction of effort represents a _____. 
A.  merger approach

B.  fixed plan

C.  defensive strategy

D.  growth strategy

E.  stability strategy

83. A defensive strategy is also known as a(n) _____. 

A.  retrenchment strategy

B.  fixed plan

C.  aggressive approach

D.  growth strategy

E.  stability strategy

84. Strategy formulation is the process of _____. 

A.  gaining information about competition and then selecting which information to react to

B.  choosing among different strategies and altering them to best fit the organization
 C.  strategically controlling your employees' actions

D.  selecting the correct employees that best fit the organization

E.  developing a strong diversity plan

85. Rashid, the CEO of Top Productions, was telling his new vice president of accounting that "In the past I
had resistance to new ideas by people who felt that one of our plans threatens their influence or jobs.
So when you tell your collections department that we just hired a collection agency to handle bad
debt, you may have to sell your collections manager and his supervisors on using the agency and that
nobody is going to be laid off." Selling middle and supervisory managers on changes to overcome their
resistance is often a necessary part of _____. 
A.  reality assessment

B.  strategy formulation

C.  strategic control

D.  operational control

E.  strategy implementation

86. Strategic control includes ____. 

A.  implementing MBO

B.  a strong employee diversity and synergy agenda

C.  seldom making adjustments to a strategy

D.  monitoring the execution of strategy and making adjustments, if necessary

E.  developing a diversity plan

87. Bryan Barry suggests that to keep a strategic plan on track, organizations should ____. 
A.  engage people, keep it simple, stay focused, and keep moving
 B.  engage people, keep people happy, provide fun activities, and provide good benefits

C.  provide fun activities, provide good benefits, and keep it simple

D.  engage people, keep it simple, stay focused, and offer a good benefit package

E.  aggressively compete, cut costs, focus on customer service, and engage people

88. George, a chef and owner of a popular restaurant, is always visiting his competition to observe how
they are doing things in their restaurants. He told one of his managers that "I do this because I want to
know what is going on. I am always concerned that one of our competitors will surprise us with a new
service or menu item like us, but better." George is utilizing ___. 
A.  competitive intelligence

B.  environmental scanning

C.  TQM

D.  corporate spying

E.  management by observation

89. Pedro, CEO of a successful IT company, is constantly reading press releases, ads, and news articles
about his competition, and he regularly checks information about new competitive products and visits
trade shows to study his competition. Pedro is involved in ____. 
A.  environmental observation

B.  TQM

C.  corporate spying

D.  management by observation

E.  competitive intelligence

 

90. Sue keeps a close eye on her company's internal and external environment to discover possible
opportunities for new products and threats from competition, as soon as possible. This is an example
of ____. 
A.  the observation approach

B.  environmental scanning

C.  corporate spying

D.  management by observation

E.  competitive intelligence

91. A SWOT analysis is _____. 

A.  looking for the strengths, weaknesses, opportunities, and threats influencing an organization's
competition

B.  a diversity and synergy method

C.  a search for the strengths, weaknesses, opportunities, and threats affecting an organization

D.  developing strategies, ways to improve, output methods, and threats influencing a company

E.  an inexpensive method of implementing a forecast

92. Many customers shop at Organic Foods because of the employees' extensive product knowledge. This
is an example of the company's _____. 
A.  strengths

B.  threats

C.  weaknesses

D.  opportunities
 E.  intelligence

93. Don knows that one of the reasons people do not return to his electronics store is because of the slow
service. This is an example of the organization's _____. 
A.  strengths

B.  threats

C.  weaknesses

D.  opportunities

E.  intelligence

94. Christopher's Restaurant and Catering serves delicious vegetarian and vegan dishes. So when the local
community became interested in eating a healthier diet, Christopher's benefited. The changing
community attitudes are an example of a(n) _____ for Christopher's. 
A.  strength

B.  threat

C.  weakness

D.  opportunity

E.  intelligence

95. The owners of Smith's Yard Mart, a family-owned garden center in a rural community, is concerned
over the news that a large retailer with a garden center is building a new store on the other side of
town. This new retailer is a(n) ____ for Smith's. 
A.  strength

B.  threat

C.  weakness
 D.  opportunity

E.  intelligence

96. Regarding the findings from a SWOT analysis, organizational strengths are ____. 
A.  external opportunities that a company can take advantage of

B.  environmental factors that the organization may exploit for competitive advantage

C.  MBO skills that should be emphasized

D.  skills and capabilities that give a company advantages in executing its strategies

E.  means that give a specific industry an advantage in a down economy

97. Regarding the results of a SWOT analysis, organizational opportunities are ____. 
A.  environmental factors that the organization may exploit for a competitive advantage

B.  weaknesses within the organizational hierarchy

C.  MBO skills and opportunities that should be emphasized

D.  skills and capabilities that give an industry advantages in executing its strategies

E.  problems that a specific industry needs to correct

98. A forecast is a(n) _____. 

A.  glimpse of what just happened

B.  execution of strategy and making adjustments

C.  projection for the future

D.  analysis of the past

 E.  plan for implementing strategic plans

99. Contingency planning is also known as _____. 

A.  organizational opportunities

B.  scenario goal-setting and plans

C.  a trend analysis

D.  scenario planning and scenario analysis

E.  strategic planning

100. The basic assumption that the picture of the present can be projected into the future is the basis of a
_____. 
A.  trend goal

B.  business plan

C.  vision statement

D.  managerial pact

E.  trend analysis

101. Sales this year at Donna's Pawn Shop have been high, and based on several factors, Donna projects
next year's sales to also be good. However, even with her forecast of continued strong sales, Donna
and her partner need to develop a plan in case sales drop unexpectedly. This type of planning for
alternative future conditions is known as ____. 
A.  background planning

B.  a trend analysis

C.  a vision plan

 D.  contingency planning

E.  a managerial pact

102. The process by which a company compares its performance with that of high-performing organizations
is known as ___. 
A.  trend analysis

B.  a vision plan

C.  contingency planning

D.  a managerial pact

E.  benchmarking

103. Michael Porter proposed that business-level strategies originate with the primary competitive forces in
the firm's environment; these forces are _____. 
A.  threats of new entrants and bargaining power of buyers and suppliers

B.  threats of substitute products and services and competitive rivalries

C.  threats of new entrants and substitute products or services, bargaining power of suppliers and
buyers, and competitive rivalries

D.  threats of government paperwork and tax increases, bargaining power of suppliers, and
competitive rivalries

E.  bargaining power of suppliers

104. Tom and his family have developed a successful business selling fertilizer to other farmers in his area,
consisting of rich, organic compost material. Recently ABC Seed, a national seed company, has been
marketing a chemical fertilizer to his customers that is less expensive than Tom's product. ABC's efforts
are an example of ___ in Porter's model for industry analysis. 
 A.  buyers' negotiating influence

B.  competitive rivalry among competitors

C.  threats of substitute products and services

D.  power of the suppliers

E.  threats of new ideas

105. Porter's competitive strategies of cost-leadership and differentiation focus on ____ markets, and the
cost-focus and focused-differentiation strategies focus on ____ markets. 
A.  narrow; wide

B.  specific; broad

C.  growth; specific

D.  diverse; narrow

E.  wide; narrow

106. When organizations endeavor to keep their costs, and hence prices, of their products or services below
those of competitors and to target a wide market this is a _____ strategy. 
A.  focused-differentiation

B.  differentiation

C.  cost-leadership

D.  reinventing

E.  cost-focus

107. Organic Market sells high-quality products and grocery items that are unique to their area; in addition
 it offers delivery for customers who are unable to leave their home and a number of regular workshops
regarding eating healthy. By offering these types of products and services, Organic Market is pursuing a
_____ strategy. 
A.  cost-savings

B.  cost-focus

C.  value-focused

D.  differentiation

E.  focused-differentiation

108. Mountain Rescue Incorporated sells emergency safety and rescue products to ski patrols and rescue
workers at prices that are below those of its competitors, who offer a larger line of products and focus
on broader markets. Mountain Rescue Incorporated is pursuing a ____ strategy. 
A.  cost-focus

B.  cost-leadership

C.  differentiation

D.  narrow

E.  focused-differentiation

109. ABC Office Supply in Dayton sells high-quality, unique pens that are a real value to executives in the
area. No other company in its area markets pens of such quality and value. By offering this type of
product, ABC Office Supply is an example of a company utilizing a _____ strategy. 
A.  cost-leadership strategy

B.  focused-differentiation

C.  cost-focus

D.  uniquely focused

 E.  differentiation

110. ABC Technology makes and sells only one product, a high-quality processor for mainframe computers,
within its market, Silicon Valley, California; ABC utilizes a _____ strategy. 
A.  cost-focus

B.  focused-differentiation

C.  diversification

D.  single-product

E.  differentiation

111. Quality Services is an organization that operates several companies that market food products,
restaurant equipment, and paper and plastic products, and it even has a division that counsels
restaurant owners, helping them become established. Quality Services is involved in a _____ strategy. 
A.  single-product

B.  diversification

C.  focused-differentiation strategy

D.  differentiation

E.  multiproduct

112. When an organization operates several businesses to spread the risk, such as a landscaping company
that offers not only landscaping services but also lawn care, snow removal, and other services, that
business is utilizing a ____ strategy. 
A.  diversity

B.  diversification
 C.  focused-differentiation

D.  differentiation

E.  multiservice

113. Doug is the CEO of Johnson Motors, a business consisting of Chevrolet, Buick, Cadillac, and Mercedes-
Benz dealerships. He also sells Fleetwood and American Coach RVs. Doug mentioned to his sales
manager that "there is economic value in having many related businesses managed by one ownership
group. They are worth more than if they are separate companies." This is an example of ____. 
A.  diversity

B.  diversification

C.  synergy

D.  differentiation

E.  multiproduct

114. The BCG matrix is a means of evaluating strategic business units on the basis of their _____. 
A.  business costs and share of the market

B.  differentiation and profitability

C.  business growth rates and share of the market

D.  BCG ratio

E.  product quality and profitability

115. In the BCG matrix, organizations that have slow growth but high market share, and income from them
often finances stars and question marks, are ____. 
A.  sleeping giants
 B.  dogs

C.  cash cows

D.  turtles

E.  sleepers

116. In the BCG matrix, companies that have high growth and high market share, and are definite keepers
are ____. 
A.  sleeping giants

B.  stars

C.  cash cows

D.  turtles

E.  sleepers

117. More important than profit growth, stimulating innovation, customer loyalty, and finding qualified
employees, global CEOs desire ____. 
A.  an ethical workplace

B.  organization diversity

C.  increased usage of MBO

D.  happy employees

E.  excellence in execution

118. Successful controlling within an organization, according to Bossidy and Charan, demands that
managers build a foundation of controlling using the three core processes of _____. 
A.  leading, planning, and recruiting
 B.  people, strategy, and operations

C.  diversity, people, and profitability

D.  people, planning, and leading

E.  leading, synergy, and diversity

119. A company's overall ability to execute is a function of effectively executing according to three
processes, but Bossidy and Charan proposed that the _____ process is the most important. 
A.  operations

B.  leading

C.  people

D.  planning

E.  controlling

120. What is the assessment of the external environment? What are the critical issues facing the business?
Can the business execute the strategy? According to Bossidy and Charan, these are some of the
questions that should be addressed in a _____. 
A.  code of ethics

B.  value statement

C.  diversity agenda

D.  mission statement

E.  strong strategic plan