STRATMAN FINAL EXAM

T/F PRELIM
FALSE America is benefiting greatly from low prices for oil and gas

TRUE Punctuality is important among Mexicans

TRUE Mexico is especially attractive for manufacturing products that are bulky or
costly to transport

TRUE Title such professor, doctor or engineer are important in India

FALSE In the United States of America before you enter the house that you will visit,
you have to remove your shoes first

TRUE To establish an ethics culture, the firm should be a role model and be visible
to others

TRUE Companies displaying a clear commitment to ethical conduct inconsistently

outperform companies that do not display ethical conduct.

TRUE Causing environmental harm is one of the business actions that is unethical

FALSE A business wants a reputation as being a polluter

TRUE Favoritism complaint is one of the reasons why workplace romance is

detrimental to workplace morale

FALSE Flirt with a relationship that you want to strengthen

FALSE The retirement age in the Philippines is 55 years

TRUE Managers and employees of firms must be careful not to become scapegoats
to be blamed for company environmental wrongdoings.

FALSE ISO has 170 members as of to date

FALSE Humane treatment of animals doesn’t matter

T/F MIDTERMS
FALSE Not all organizations have strengths and weakness in the functional areas of
business

TRUE A complete external assessment is vital to help a firm formulate, implement

and evaluate strategies to enable it to gain and sustain competitive advantage

FALSE Two organizations have the same culture

TRUE The only thing certain about the future of any organization is change

FALSE Employees today are more uneducated and more capable of participating in
organizational decision making than ever before

TRUE Test markets allow an organization to test alternative marketing plans and to
forecast future sales of new products

TRUE Organizations should consider the costs and benefits of various wholesaling
and retailing options
TRUE Looking at the competition is not the company’s best form of market research

FALSE Non-profit organizations need no strategic planning just as much as for profit

TRUE Because consumers remain price insensitive, many firms have lowered prices
to compete

TRUE Effective vision and mission statements stand the test of time

FALSE Organizations usually reexamine their vision and mission statements every
six months

FALSE Vision statements can do vary in length, content, format and specificity

TRUE An effective vision statement describes an organization’s purpose, customers,

products, services, markets, philosophy and basic technology

TRUE Every organization has a unique purpose and reason for being

FALSE A clear vision statement is essential for effectively establishing objectives and
formulating strategies

TRUE There is no one best mission statement for particular organization

TRUE Too often, strategists develop vision and mission statements only when the
organization is in trouble.

FALSE Mission statement reveals the company’s aspirations for the future

TRUE Without long term objectives, an organization would drift aimlessly toward
some unknown end

TRUE You cannot have a strategy to go north and then take a step east, south or
west just to be on the safe side

FALSE Organizations can excel in too many things because resources and talents
get spread thin and competitors gain knowledge.

TRUE Strategy making is just a task for top executives

TRUE The largest online video streaming company is Netflix

TRUE Diversification is an example of strategy that offers the advantages of

differentiation

FALSE Diversification is often used to raise capital for further strategic acquisitions or
investments.

TRUE Liquidation is associated with bankruptcy

TRUE It maybe better to cease operating than to continue losing sums of money

FALSE Organization can afford to pursue all the strategies that might benefit the firm

TRUE An organization competes in a growing industry.

T/F MODULE 7

FALSE Increasing turbulence in markets and industries around the world

means the internal audit has become an explicit and vital part of
the strategic management process

TRUE Firms that do not mobilize and empower their managers and
employees to identify, monitor, forecast and evaluate key external
forces may fail to anticipate emerging opportunities

TRUE External audit provided a framework for collecting, political, legal,

technological and competitive information

TRUE Firms not taking advantage of e-commerce and social media

networks are technologically falling behind

FALSE Typically, the external audit process is more formal in small firms

FALSE Planning would be possible without assumptions

FALSE No forecast is perfect - some are even widely inaccurate

TRUE Most organizations forecast their own revenues and profits semi-
annually

TRUE After information is gathered, it should be assimilated and

evaluated

TRUE Cultural factors have direct impact on the potential attractiveness

of various strategies

FALSE Technological factors shape who we are as people

TRUE Some companies take public stands on political issues.

TRUE Middle East countries are not countries that look kindly on same
sex marriage

TRUE Rapid technological advances in mobile and electronic banking

have lead banks to close branch offices in US

FALSE The intensity of competition among firms various widely across

industries

MULTIPLE CHOICE PRELIM

MODULE 4
1. OUTSOURCING Is a practice usually undertaken by companies as a
cost cutting measure

2. LONG TERM OBJECTIVE Is something you plan to achieve

3. STRATEGIC OBJECTIVES Are usually some sort of performance goal

4. MANAGING BY HOPE Is based on the principle that future is burdened with

great uncertainty

5. FINANCIAL OBJECTIVES Are linked to money

6. RESHORING Is the practice of transferring a business operation

that was moved overseas back to the country from
which it was originally relocated

7. FIRST MOVER ADVANTAGE Refers to an advantage gained by a company that

first introduces a product

8. DIFFERENTIATION Is used to increase competitive advantage

STRATEGY

9. JOINT VENTURE Is a business arrangement in which two or more

 parties agree to pool their resources

10. MANAGING BY Is based on the principle if ain’t broke, don’t fix it

EXTRAPOLATION

1. CMO The functional level is being occupied by

2. MARKET PENETRATION It refers to the successful selling of a product or

service in a specific market

3. MANAGING BY CRISIS It is based on the belief that the true measure of a

really good strategist is the ability to solve problems

4. DIVESTITURE It involves the sale of the subsidiary or business line

to another company

5. ALL OF THE ABOVE (PRES, The divisional level is being occupied by

EVP, NONE)

6. MANAGING BY It is based on the idea “do your own thing, the best
SUBJECTIVES way you know how”

7. PRODUCT DEVELOPMENT It incorporates a product’s entire journey

8. COST LEADERSHIP It is often driven by company efficiency, size, scale,

scope and cumulative experience

9. FORWARD INTEGRATION It maybe done via internal expansion, acquisition or

merger

10. RELATED DIVERSIFICATION It occurs when the company adds to or expands the
existing line of production or market

11. NONE OF THE ABOVE It refers to the day to day operation of the company
(FUNCTIONAL, DIVISIONAL,
CORPORATE)

12. BACKWARD INTEGRATION A company expands its role to fulfill tasks formerly
completed by businesses up the supply chain

13. MARKET DEVELOPMENT It targets new customer in new segments

14. RETRENCHMENT It aims to reduce the size or diversity of organizational

operations

15. UNRELATED Example is when a shoe producer enters the

DIVERSIFICATION business of clothing manufacturing

16. LIQUIDATION It entails closing of a business through the sale of all

its assets

17. FOCUS It involves offering the niche customers a product

customized to their tastes and requirements

18. ACQUISITION It occurs when a large organization purchases a

smaller firm or vice versa

19. MERGER It occurs when two organizations of about equal size

unite to form one enterprise
 20. CORPORATE It is the top of planning pyramid

MT EXAM
1. MISSION STATEMENT - it is the foundation for 19. MANAGING BY CRISIS - It is based on the
priorities, strategies, plans and work belief that the true measure of a really good
assignments strategist is the ability to solve problems
2. VISION - it is something that you see or dream 20. ALL OF THE ABOVE - The divisional level is
3. BEST BUY - its mission is “individuals and being occupied by
business” 21. DIVESTITURE - It involves the sale of the
4. MANAGEMENT INFORMATION SYSTEM - it is subsidiary or business line to another company
the study of people, technology, organizations 22. MARKET PENETRATION - it refers to the
and the relationships among them successful selling of a product or service in a
5. CROCS - its mission statement is “dependable specific market
and lasting comfort all day” 23. BACKWARD INTEGRATION - A company
6. TOTAL COST - it is the actual cost incurred in expands its role to fulfill tasks formerly
the production of a given level of output completed by businesses up the supply chain
7. DISTRIBUTION - it is the process of making a 24. RELATED DIVERSIFICATION - It occurs when
product or service available for the consumer the company adds to or expands the existing
or business user who needs it line of production or market
8. PRICING - it is the process whereby a business 25. ACQUISITION - It occurs when a large
sets at which it will sell its products and organization purchases a smaller firm or vice
services versa
9. ORGANIZATIONAL RESOURCES - these 26. LIQUIDATION - It entails closing of a business
include firm structure, planning processes, through the sale of all its assets
information systems, patents, trademarks 27. GROWTH - it is crucial to long-term survival
10. CONTROLLING - this function of management 28. IMPORTANCE OF VISION AND MISSION
is particularly important for effective strategy STATEMENT - “to provide a basis for the
evaluation allocation of resources” is an example of
11. INVEST DECISION - it relates to as how funds 29. PHILOSOPHY - a set of beliefs or values
of a firm are to be invested 30. PRODUCT -a tangible item that is put on the
12. RESOURCE BASED VIEW - it involves market for acquisition, attention or
developing and exploiting a firm’s unique consumption
resources and capabilities 31. SELF - CONCEPT - a mental picture of who
13. APPRAISAL - a nature of an internal audit that you are as a person
implies critical evaluation and assessment of 32. CHARACTERISTIC OF A MISSION
the existing controls STATEMENT - “inspiring” is an example of
14. FOCUS - it involves offering the niche 33. LOWE - its mission is “homebuilders and
customers a product customized to their tastes homeowners”
and requirements 34. MISSION - a expression made by its leaders,
15. MERGER - it occurs when two organizations of of their desires and intent for the organization
about equal size unite to form one enterprise 35. RARE - it is not held by many firms in the
16. FUNCTIONAL - it refers to the day to day industry
operation of the company 36. INVESTMENT DECISION - it relates to as how
17. PRODUCT DEVELOPMENT - it incorporates a the funds of a firm are to be invested into
product’s entire journey different assets so that the firm is able to earn
18. FORWARD INTEGRATION - it maybe done highest possible return
via internal expansion, acquisition or merger
37. RESOURCE BASED VIEW - it involves 57. COST LEADERSHIP - It is often driven by
developing and exploiting a firm’s unique company efficiency, size, scale, scope and
resources and capabilities cumulative experience
38. ESTABLISHED - duties should be specifically 58. MANAGING BY SUBJECTIVE - It is based on
assigned to the department the idea “do your own thing, the best way you
39. INTERNAL AUDIT - its purpose is protection of know how”
the properties or assets of the business 59. CMO - The functional level is being occupied
40. MARKETING RESEARCH - its goal is to by
identify and access how changing elements of 60. MISSION STATEMENT - it is a short
statement of why an orgazation exists, what its
the marketing mix impact customer behavior
overall
41. FINANCING DECISION - it is done either 61. UNRELATED DIVERSIFICATION - Example is
through shareholders funds or borrowed when a shoe producer enters the business of
capital clothing manufacturing
42. HARD TO IMITATE - it is hard to copy or
achieve
43. ORGANIZING - it can have a positive impact 1. T - a complete external assessment is vital to
help firm formulate
on organizational and individual performance
2. F - two organizations have the same culture
44. RESEARCH & DEVELOPMENT - it is often the 3. T - the only thing certain about the future of any
first stage in the development process organization is change
45. FINANCING AND ACCOUNTING - what 4. F - mission statement reveals the company’s
functional area of the business is cost or aspirations for the future
benefit analysis? 5. T - without long term objectives, an organization
46. SELLING PRODUCTS AND SERVICE - it is would drift
6. T - you cannot have a strategy to go north and
the process whereby a business sets at which
then
it will sell its products and services 7. F - organization can excel in too many things
47. MANUFACTURING - it is the process which because resources and talents
transforms the inputs or resources of an 8. T - strategy making is just a task for top
organization into final goods or services executives
48. MISSION STATEMENT - it should be short, 9. T - the largest online video streaming company
preferably one sentence is Netflix
10. T - diversification is an example of a strategy
49. MISSION - an expression made by its leaders,
that offers the advantages of differentiation
of their desires and inten for the organization 11. F - diversification is often used to raise capital
50. VISION STATEMENT - a document that states for further strategic acquisitions or investment
the current and future objectives of an 12. T - liquidation is associated with bankruptcy
organization 13. T - it maybe better to cease operating than to
51. PROFITABILITY - it is critical to company’s continue losing large sums of money
existence 14. F - organization can afford to pursue all the
strategies that might benefit the firm
52. COMPONENTS OF A MISSION STATEMENT
15. T - an organization competes in a growing
- survival, growth, and profitability” industry
53. CORPORATE - It is the top of planning 16. F - employees today are more uneducated and
pyramid more capable of participating in organizational
54. PUBLIC IMAGE - it is the image of a person, decision making
group or organization is the way that they 17. T - test markets allow organization to test
appear to other alternative marketing plans and to forecast
future sales
55. BENEFIT OF HAVING A CLEAR MISSION
18. T - organizations should consider the costs
AND VISION - “resolve divergent views among and benefits
managers” 19. T - too often, strategists develop vision and
56. RETRENCHMENT - it aims to reduce the size mission statements only when the organization
or diversity of organizational operation 20. F - mission statement reveals the company’s
aspirations for the future
Module 5: Vision and Mission Analysis being of our communities (Author’s
Vision Statements: What Do We Want to comment: Statement is good but
Become? could end after the word guests)
● It is especially important for managers
Vision Statement Analysis
and executives in any organization to ➔At a minimum, a vision statement should
agree on the basic vision that the firm reveal the type of business the firm
strives to achieve in the long term. engages.
● A vision statement should answer the ➔For example, to have a vision that says, “to
become the best retailing firm in the USA”
basic question, “What do we want to is much too broad, because that firm could
become?” be selling anything from boats to bunnies.
● A clear vision provides the foundation for ➔Notice here how Starbucks’ vision statement
developing a comprehensive mission is improved.
statement.
Vision Statement Examples: Mission Statements: What Is Our Business?
1. General Motors vision is to be the ❖An enduring statement of purpose that
world leader in transportation distinguishes one organization from other
products and related services (Author similar enterprises,
comment: Good statement) ❖the mission statement is a declaration of
2. PepsiCo’s responsibility is to an organization’s “reason for being.”
continually improve all aspects of the ❖It answers the pivotal question “What is our
world in which we operate business?”
environment, social, economic ❖A clear mission statement is essential for
creating a better tomorrow than today effectively establishing objectives and
(Author comment: Statement is too formulating strategies.
vague; it should be reveal how the ❖Sometimes called a creed statement, a
firm’s food and beverage business statement of purpose, a statement of
benefits people) philosophy, a statement of beliefs, a
3. Royal Caribbean’s vision is to statement of business principles, or a
empower superior returns for our statement “defining our business,” a
shareholder and enhancing the well- mission statement reveals what an
 organization wants to be and whom it ❖ Another benefit of developing a
wants to serve. comprehensive mission statement is
❖A mission statement is the foundation for that divergent views among
priorities, strategies, plans, and work managers can be revealed and
assignments. resolved through the process.
❖It is the starting point for the design of jobs ❖ The question “What is our business?”
and organizational structures. can create controversy.
❖Nothing may seem simpler or more obvious ❖ Raising the question often reveals
than to know what a company’s business differences among strategists in the
is. organization.
❖ Individuals who have worked together
The Process of Developing Vision and for a long time and who think they
Mission Statements know each other suddenly may
❖As indicated in the strategic-management realize that they are in fundamental
model, clear vision and mission statements disagreement.
are needed before alternative strategies 10 Benefits of having a clear mission and
can be formulated and implemented. vision
❖As many managers as possible should be 1)Achieve clarity of purpose among all
involved in the process of developing these managers and employees
statements because, through involvement, 2)Provide a basis of all other strategic
people become committed to an planning activities, including internal and
organization. external assessment, establishing
objectives, developing strategies, choosing
The Importance (Benefits) of Vision and among alternative strategies, devising
Mission Statements policies, establishing organizational
➔The importance (benefits) of vision and structure, allocating resources, and
mission statements to effective strategic evaluating performance
management is well documented in the 3)Provide direction
4)Provide a focal point for all stakeholders of
literature, although research results are
the firm
mixed. 5)Resolve divergent views among managers
➔In actual practice, wide variations exist in 6)Promote a sense of shared expectations
the nature, composition, and use of both among all managers and employees
vision and mission statements. 7)Project a sense of worth and intent to all
stakeholders
King and Cleland recommend that 8)Project an organized, motivated
organization worthy of support
organizations carefully develop a written
9)Achieve higher organizational performance
mission statement in order to reap the 10)Achieve synergy among all managers and
following benefits: employees.
1.To make sure all employees/managers
understand the firm’s purpose or reason Characteristics of a Mission Statement
for being. ● A mission statement is a declaration
2.To provide a basis for prioritization of key of attitude and outlook. It usually is
internal and external factors utilized to broad in scope for at least two major
formulate feasible strategies. reasons.
3.To provide a basis for the allocation of ● First, a good mission statement
resources. allows for the generation and
4.To provide a basis for organizing work, consideration of a range of feasible
departments, activities, and segments alternative objectives and strategies
around a common purpose without unduly stifling management
Resolution of Divergent Views creativity.
 ● Second, a mission statement needs
to be broad to reconcile differences
effectively among, and appeal to, an
organization’s diverse stakeholders,
the individuals and groups of
individuals who have a special stake
or claim on the company.
Components of a Mission Statement
Characteristics of a Mission statement ➔Mission statements can and do vary in
1.Broad in scope does not include monetary length, content, format, and specificity.
amounts, numbers, percentages, rations or ➔Most practitioners and academicians of
objectives strategic management feel that an effective
2.Fewer than 150 words in length statement should include the nine mission
3.Inspiring statement components given here.
4.Identifies the utility of a firm’s products 1) Customers — Who are the firm’s
5.Reveals that the firm is socially responsible customers?
6.Reveals that the firm is environmentally 2) Products or services — What are
responsible the firm’s major products or services?
7.Includes 9 components: customer, 3) Markets — Geographically, where
products/services, markets, technology, does the firm compete?
concern for survival/growth/profits, 4) Technology — Is the firm
philosophy, self-concept, concern for technologically current?
public image, concern for employees 5) Survival, growth, and profitability
8.Reconciliatory — Is the firm committed to growth
9.Enduring and financial soundness?
6) Philosophy — What are the basic
A Customer Orientation beliefs, values, aspirations, and
❖An effective mission statement describes an ethical priorities of the firm?
organization’s purpose, customers, 7) Self-concept (distinctive
products or services, markets, philosophy, competence) — What is the firm’s
and basic technology. According to Vern major competitive advantage?
McGinnis, a mission statement should 8) Public image — Is the firm
1. Define what the organization is and responsive to social, community, and
what the organization aspires to be environmental concerns?
2. Be limited enough to exclude some 9) Employees — Are employees a
ventures and broad enough to allow for valuable asset of the firm?
creative growth
3. Distinguish a given organization from Components of a Mission Statement
all others (Mission Statement components written
4. Serve as a framework for evaluating from a customer perspective)
both current and prospective activities 1. Customers - our customers are
5. Be stated in terms sufficiently clear to outdoor enthusiasts seeking fishing
be widely understood throughout the excitement and adventure
organization 2. Products/services - we provide fast,
clean boats, all the bait and tackle
needed and friendly first mates to
create memories for a lifetime
3. Markets - our fleet of fast, clean
vessels operate all along the Florida
Gulf Coast
4. Technology - Our vessels are
equipped with the very safety and
fishing finding equipment to ensure
 that customers comfortably are additionally, are inspiring, concise,
“catching rather than fishing” and comprised of fewer than 90
5. Survival, growth and profitability - words each.
our prices are as low as possible to
provide customers great value in
conjunction with high employee
morale and a reasonable return of
our owners
6. Philosophy - we assure
customers the utmost courtesy
and care as our motto on every
vessel is to follow the Golden
Rule.
7. Self - concept - for customer
enjoyment and safety, we provide
the most experienced staff in the
industry
8. Public Image - our vessels use
emission-friendly engines; we strive
to bring repeat tourists to all
communities where we operated Two Mission Statements Proposed
9. Employees - our on-the-water and ➔ The process by which mission
of-the-water employees are “on a statements are developed and the
mission” to help customers have a exact language/wording included in
great time the statement can significantly impact
their effectiveness as a tool for
Evaluating and Writing Mission Statements strategic management and marketing
❖ There is no one best mission strategy.
statement for a particular
organization, so when it comes to
evaluating mission statements, good
judgment is required.
❖ Ideally, the statement will provide
more than simply inclusion of a single
word such as products or employees
regarding a respective component.

Two Mission Statements Critiqued

● Perhaps the best way to develop a
skill for writing and evaluating mission
statements is to study actual
company missions.

Five Mission Statements Revised

● As additional guidance for
practitioners (and students), five
actual mission statements are
revised/rewritten from a customer
perspective and presented in Table
5-5.
● The improved statements include all
nine components written from a
customer perspective, and,