The Nature of Strategic Management __________ help an organi'ation gather, analy'e, and organi'e The term _________ is used

to refer to strategy formulation, implementation, and evaluation, with _________referring only to strategy formulation. strategic planning; strategic management assessment; planning strategic management; strategic planning management cycle; brainstorming Which of these requires a firm to establish annual objectives, devise policies, and allocate resources? trategy formulation Strategy implementation trategy manipulation trategy evaluation The rationale for periodically conducting strategic!management meetings away from the wor" site is to encourage more _____________ and ____________ among participants. feedbac"; rigidity creativity; candor confidence; self!interest strategy evaluation; candor # disadvantage of international operations is$ information. *thics officers +peratives ,obbyists Strategists

External opportunities; external threats .nternal wea"nesses; e%ternal opportunities .nternal strengths; internal wea"nesses trategic management can be defined as the art and science of formulating, implementing, and evaluating cross!functional decisions that enable an organi'ation to achieve its objectives. True foreign operations can allow firms to establish low!cost production The action stage of strategic management is called strategy facilities in locations close to raw materials and-or cheap labor. economies of scale can be achieved from operation in global rather than solely domestic mar"ets. competitors in foreign mar"ets may not e%ist. causing communication barriers and problems managing people. _________ are especially critical for successful strategy implementation. .nterpersonal skills Technical plans ,ong!range plans hort!range plans trategies can be defined as specific results that an organi'ation see"s to achieve in pursuing its basic mission. 0alse trategies are the means by which long!term objectives will be achieved. Three fundamental strategy evaluation activities are reviewing corrective actions. True language, culture, and value systems differ among countries, e%ternal and internal factors, measuring performance, and ta"ing formulation. 0alse

/. #ll of these are pitfalls an organi'ation should avoid in strategic 1easons for poor or no strategic planning on part of firms include #nything that a firm does especially well compared to rival firms is planning e%cept$ referred to as$ competitive advantage. comparative advantage. an e%ternal opportunity. opportunity cost. &oth military and business organi'ations do all of the following e%cept$ use of the element of surprise. aim (to gain competitive advantage.( use the assumption of conflict to develop strategies. use their own strengths to e%ploit competitors) wea"nesses. using strategic planning to gain control over decisions and resources. failing to involve "ey employees in all phases of planning. using plans as a standard for measuring performance. ____________ and __________ refer to economic, social, cultural, demographic, environmental, political, legal, governmental, technological, and competitive trends and events that could significantly benefit or harm an organi'ation in the future. .nternal strengths; e%ternal threats 3ommunication is an act of strengthening employees) sense of +bjectives are an organi'ation)s statements that answer the 0alse #n organi'ation can pursue any and-or all strategies that potentially could benefit the firm. 0alse 2o organi'ation can pursue all the strategies that potentially could benefit the firm. hastily moving from mission development to strategy formulation. question (what do we want to become?( overconfidence, too e%pensive, suspicion, and la'iness. True

effectiveness by encouraging them to participate in decision ma"ing and to e%ercise initiative and imagination, and rewarding them for doing so.http$--www.vu's.net0alse *mpowerment is the act of strengthening employees) sense of decision ma"ing and e%ercise initiative and imagination.

6. .t is predicted that, by ;:;6, over 4CD of the population in the Enited tates will be over =6 years old. #ns$ T 9age CC =. The first step for using 9orterFs 0ive!0orces Aodel is to

b. .mplementation c. *valuation d. 0eedbac" e. Boal!setting 4>. #nything that a firm does especially well compared to rival firms is referred to as _____. a. competitive advantage b. comparative advantage c. opportunity cost d. sustainable advantage e. an e%ternal opportunity

effectiveness by encouraging and rewarding them to participate in evaluate the relative strength of each competitive force. #ns$ 0 9age 4:4

trategic management must be a self!reflective learning process. G. Aetaphors are handed!down narratives of some wonderful True +ne pitfall to avoid in strategic planning is top management ma"ing many intuitive decisions that conflict with formal planning. True ample 3omprehensive *%am 3hapters 4 5 6 True-0alse 4. # vision statement answers the question, 7What is our business?,8 whereas a mission statement answers, 7What do we want to become?8 #ns$ 0 9age$ 4:!44 ;. The changes that occurred at <isney after 1obert .ger too" over as 3*+ e%emplifies the fact that more and more organi'ations are centrali'ing the strategic!management process. #ns$ 0 9age$ 4= Aultiple 3hoice 44. What can be defined as the art and science of formulating, implementing and evaluating cross!functional decisions that >. .n multidivisional organi'ations, each division should develop a enable an organi'ation to achieve its objectives? a. trategy formulation mission statement independent of the parent company. #ns$ 0 9age$ => ?. #ccording to @ern AcBinnis, to be effective, all a mission the organi'ation aspired to be. #ns$ 0 9age$ => 4;. <uring what stage of strategic management are a firmFs specific internal strengths and wea"nesses determined? a. 0ormulation b. trategy evaluation c. trategy implementation d. trategic management statement need to do is define what the organi'ation is and what e. trategic leading 4:. Aost companies favor related diversification strategies in order to e%ploit common use of a well!"nown brand name. #ns$ T 9age 4C: /. ince a combination strategy is not ris"y, many organi'ations pursue a combination of two or more strategies simultaneously. #ns$ 0 9age$ 4G4 event that is based on history but has been embellished with fictional detail. #ns$ 0 9age 4;G

C. &enchmar"ing is an analytical tool used to determine whether a 4?. The trends in newspaper circulation in the Enited tates firmFs value chain activities are competitive compared to rivals. #ns$ T 9age 46G provide support for which statement? a. ustainable competitive advantage is easy to maintain. b. everal firms can have similar competitive advantages. c. ome products are relatively immune to changes in the e%ternal environment d. Aost competitive advantages are hard to sustain e. 3ompetition is generally good for companies and consumers 46. .n which phase of strategic management are annual objectives especially important? a. 0ormulation b. 3ontrol c. *valuation d. mplementation e. Aanagement 4=. 9rinciples of conduct that guide decision!ma"ing are "nown as _____. a. human rights b. the 3onstitution c. business ethics d. nonprofit organi'ation policies e. social responsibility requirements

4G. Which of these basic questions should a vision statement answer? a. What is our business? b. Who are our employees? c. Why do we e%ist? d. !hat do "e "ant to become? e. Who are our competitors? 4C. What is the first step in the comprehensive strategic! management model? a. #eveloping vision and mission statements b. 9erforming e%ternal audits c. 9erforming internal audits d. Aeasuring and evaluating performance e. *stablishing long!term objectives 4/. #ccording to the comprehensive strategic!management model, which step needs to be completed immediately following the establishment of long!term objectives? a. <eveloping vision and mission statements b. 9erforming e%ternal audits c. 9erforming internal audits d. $enerating, evaluating, and selecting strategies e. Aeasuring and evaluating performance ;:. What is the best time to develop a mission statement? a. &efore a business is opened b. !hen the firm is successful c. When the firm is in financial trouble d. When the firm is in legal trouble e. When the firm encounters competition ;4. # proactive environmental policy is li"ely to lead to _____. a. higher cleanup costs b. conservation of energy c. reduced customer loyalty d. numerous liability suits e. higher medical costs ;=. Who is the largest e%porter to the Enited tates? a. Ae%ico b. %hina c. 3anada d. Enited Kingdom ;?. .n general, what happens to #merican goods in overseas mar"ets when there is a strong dollar? a. ,ess e%pensive b. Aore attractive c. 3heaper d. Aore e%pensive e. <esirable ;>. Which type of trend is e%emplified by the increasing numbers of two!income households in #merica? a. ocial b. *conomic c. 3ultural d. Technological e. Jistorical ;;. Which of these e%amples of a mission statementFs focus area is not effective? a. #THT focuses on communication rather than telephones. b. *%%on-Aobil focuses on oil and gas rather than energy. c. Enion 9acific focuses on transportation rather than railroads. e. tarbuc"s focuses on the cafI e%perience rather than coffee.

e. Lapan ;G. The term that refers to the *EFs effort to end competitive ta% brea"s among member countries is _____. a. double ta%ation b. ta%ation bias d. ta% reconciliation e. ta% harmoni'ation ;C. #ccording to 9orter, what is usually the most powerful of the five competitive forces? a. 9otential development of substitute products b. &argaining power of suppliers c. &argaining power of consumers d. 1ivalry among competing firms e. 9otential entry of new competitors ;/. # standardi'ed, detailed set of techniques and behaviors that manage an%ieties, but seldom produce intended, technical consequences of practical results are called _____. a. fol"tales b. rites c. metaphors d. rituals ;6. .t is predicted that the Enited tates will have how many racial e. values or ethnic majorities by the year ;:G6? a. None b. +ne c. Two d. Three e. 0ive >:. What are historical narratives describing the unique accomplishments of a group and its leaders, usually in heroic terms? a. 1ites b. Sagas c. tories d. Ayths e. 0ol"tales >4. Which function of management includes areas such as job design, job specification, job analysis and unity of command?

d. Eniversal tudios focuses on entertainment rather than movies. c. equity ta%ation

a. 9lanning b. &rgani'ing c. Aotivating d. taffing e. 3ontrolling >;. Which of the following is the process of influencing people to accomplish specific objectives? a. taffing b. Motivating c. 9lanning d. 3ontrolling e. +rgani'ing >>. Which decision concerns determining the best capital which the firm can raise capital? a. .nvestment b. <ividends c. 0inancing d. %apital budgeting e. .mplementation >?. What category of ratios measures how effectively a firm can maintain its economic position in the growth of the economy and industry? a. 9rofitability b. ,iquidity c. ,everage d. #ctivity e. $ro"th >6. &udget 1ent!a!3ar opening car rental shops in Wal!Aart stores is an e%ample of which type of strategy? a. (or"ard integration b. &ac"ward integration c. Jori'ontal integration d. 1elated diversification

e. Enrelated diversification >=. #dvanced Aedical +ptics using acquisitions to obtain all medical aspects of eye care, from laser surgery to contacts to implants for all ages is an e%ample of which type of strategy? a. 0orward integration b. &ac"ward integration c. Jori'ontal integration d. Market development e. 9roduct development

b. &est!value c. +o",cost focus d. &est!value focus e. <ifferentiation ?:. Which strategy would be most appropriate when the distinctive competencies of two or more firms complement each other especially well? a. 3onglomerate diversification b. <ivestiture c. -oint venture

>G. .n which situation would hori'ontal integration be an especially d. 1etrenchment effective strategy? a. !hen an organi'ation can gain monopolistic characteristics in a particular area or region "ithout being 6/.The term 7environment8 includes all of the following e%cept$ a.air. b.water. d.natural resources. #ns$ c 9age$ ? =:. The one factor that has most significantly impacted the nature and core of buying and selling in nearly all industries has been >C. Win!<i%ie closing one!third of its stores and eliminating ;;,::: a.the .nternet. jobs in an attempt to emerge from ban"ruptcy would be an e%ample of _____. a. divestiture b. bac"ward integration c. liquidation d. retrenchment e. forward integration What .s trategic Aanagement? =4. What can be defined as the art and science of formulating, >/. #ccording to 9orter, which strategy offers products or services implementing and evaluating cross!functional decisions that to a small range of customers at the lowest price available on the enable an organi'ation to achieve its objectives? mar"et? a. ,ow!cost a. trategy formulation b. trategy evaluation b.political borders. c.corporate greed. d.customer and employee focus. e.the government. #ns$ a 9age$ ? substantially* to reduce competition. b. When an organi'ation competes in a slowing industry. advantages. needed to successfully manage an e%panded organi'ation. e. When competitors are succeeding due to managerial e%pertise or having particular resources an organi'ation possesses. e. .ntegration

structure for the firm and includes e%amining various methods by challenged by the federal government for )tending

c. When decreased economies of scale provide major competitive c.firms. d. When an organi'ation has neither the capital nor human talent e.fauna.

c. trategy implementation d. trategic management e. trategic leading #ns$ d 9age$ 6 =;. ____________ is used to refer to strategic formulation, implementation and evaluation, with ______________ referring only to strategic formulation. a. trategic planning; strategic management b. trategic planning; strategic processing c. trategic management; strategic planning d. trategic management; strategic processing e. trategic implementation; strategic focus #ns$ c 9age$ 6 =>. <uring what stage of strategic management are a firmFs specific internal strengths and wea"nesses determined? a.0ormulation b..mplementation c.*valuation d.0eedbac" e.Boal!setting #ns$ a 9age$ 6

e.3ompetitive advantage #ns$ c 9age$ = ==. What types of s"ills are especially critical for successful strategy implementation? a..nterpersonal b.Aar"eting c.Technical d.3onceptual e.Thin"ing #ns$ a 9age$ = =G. Which phase of strategic management is called the action phase? a. trategy formulation b. trategy implementation c. trategy evaluation d.#llocating resources e.Aeasuring performance #ns$ b 9age$ = =C. __________ is not a strategy!implementation activity. a.Ta"ing corrective actions b.*stablishing annual objectives

a..t represents the marginal factor in decision!ma"ing. b..t represents a minor factor in decision!ma"ing integrated with analysis. c..t should be coupled with analysis in decision!ma"ing. d..t is better than analysis in decision!ma"ing. e..t is management by ignorance. #ns$ c 9age$ G G4. _________ and _________ are e%ternal forces transforming business and society today. a.*!commerce; strategy b.*!commerce; globali'ation c. trategy; globali'ation d.3orporate culture; sta"eholders e. ta"eholders; strategy #ns$ b 9age$ C G;. #nything that a firm does especially well compared to rival firms is referred to as$ a.competitive advantage. b.comparative advantage. c.opportunity cost. d.sustainable advantage. e.an e%ternal opportunity. #ns$ a 9age$ C

=?. #n important activity in __________ is ta"ing corrective action. c.<evising policies a.strategy evaluation b.strategy implementation c.strategy formulation d.strategy leadership e.all of the above #ns$ a 9age$ = =6. What step in the strategic development process involves a.0ormulating strategy b. trategy evaluation c..mplementing strategy d. trategic advantage G:. Which statement best describes intuition? =/. trategy evaluation is necessary because a.internal and e%ternal factors are constantly changing. b.the *3 requires strategy evaluation. c.competitors change their strategies. e.firms have limited resources. #ns$ a 9age$ = mobili'ing employees and managers to put strategies into action? d.the .1 requires strategy evaluation. d.#llocating resources e.Aotivating employees #ns$ a 9age$ =

Key Terms in trategic Aanagement G>. The trends in newspaper circulation in the Enited tates provide support for which statement? a. ustainable competitive advantage is easy to maintain. b. everal firms can have similar competitive advantages. c. ome products are relatively immune to changes in the e%ternal environment d.Aost competitive advantages are hard to sustain e.3ompetition is generally good for companies and consumers #ns$ d 9age / G?. Which individuals are most responsible for the success and

failure of an organi'ation? a. trategists b.0inancial planners c.9ersonnel directors d. ta"eholders e.Juman resource managers #ns$ a 9age$ 4: G6. The first step in strategic planning is generally$ a.<eveloping a vision statement b.*stablishing goals and objectives c.Aa"ing a profit d.<eveloping a mission statement e.<etermining opportunities and threats #ns$ a 9age$ 4:

e."ey functions in strategy e%ploitation. #ns$ a 9age$ 4; G/. pecific results an organi'ation see"s to achieve in pursuing its basic mission are$ a.strategies b.rules c.objectives d.policies e.mission #ns$ c 9age$ 4>

C>. __________ can best be described as short!term in nature. a.Aission statements b.Tenure c.#nnual objectives d. trategies e.Aanagement #ns$ c 9age$ 4> C?. .n which phase of strategic management are annual objectives especially important? a.formulation b.control

C:. .nternal __________ are activities in an organi'ation that are c.evaluation performed especially well. a.opportunities b.competencies d.implementation e.management #ns$ d 9age$ 4> C6. What are guides to decision ma"ing? a.laws b.rules c.policies C4. What are the means by which long!term objectives will be achieved? a.strategies. b.strengths. c.wea"nesses. d.policies. e.opportunities. #ns$ a 9age$ 4> C;. ,ong!term objectives should be all of the following e%cept$ a.measurable. b.continually changing. c.reasonable. d.challenging. e.consistent. #ns$ b 9age$ 4> CG. Which of the following is not included in the strategic management model? The trategic!Aanagement Aodel C=. The strategic!management process a.occurs once a year. b.is a sequential process. c.is a continuous process. d.applies mostly to companies with sales greater than M4:: million. e.applies mostly to small businesses #ns$ c 9age$ 4> d.procedures e.goals #ns$ c 9age$ 4>

G=. What are enduring statements of purpose that distinguish one c.strengths business from other similar firms? a.policies b.mission statements c.objectives d.rules e.employee conduct guidelines #ns$ b 9age$ 4: GG. The largest company in the world is$ a.Jonda Aotor b..2B Broup c.Wal!Aart d.0ord Aotor 3ompany e.1oyal <utch- hell Broup #ns$ d 9age$ 4: GC. Esually, e%ternal opportunities and threats are$ a.uncontrollable by a single organi'ation. b.controlled by governments. c.not as important as internal strengths and wea"nesses. d."ey functions in strategy implementation. d.management e.factors #ns$ c 9age$ 4>

a.Aeasure and evaluate performance. b.9erform internal research to identify customers. c.*stablish long!term objectives. d..mplement strategies. e.<evelop mission and vision statements. #ns$ b 9age$ 4? &enefits of trategic Aanagement CC. trategic management enables an organi'ation to __________, instead of companies just responding to threats in their business environment. a.be proactive b.determine when the threat will subside c.avoid the threats d.defeat their competitors e.foresee into the future #ns$ a 9age$ 4=

organi'ations? a.increased formali'ation of the strategic management process b.increased structuring of strategic management c.increased decentrali'ing of strategic management d.increased emphasis on strategic planning #ns$ c 9age 4= /;. #ccording to research, organi'ations using strategic management are __________ than those that do not. a.more profitable b.more comple% c.less profitable d.less static e.less comple% #ns$ a 9age$ 4G />. #ccording to Breenley, strategic management offers all of

9itfalls in <oing trategic 9lanning /6. #ll of these are pitfalls an organi'ation should avoid in strategic planning e%cept$ a.using plans as a standard for measuring performance. b.using strategic planning to gain control over decisions and c.failing to involve "ey employees in all phases of planning. d.too hastily moving from mission development to strategy formulation. e.being so formal in planning that fle%ibility and creativity are stifled. #ns$ a 9age$ 4/ /=. What is not a pitfall an organi'ation should avoid in strategic planning? a.0ailing to communicate the plan to employees b..nvolving all managers rather than delegating planning to a 7planner8 c.Top managers not actively supporting the strategic planning process d.<oing strategic planning only to satisfy accreditation or regulatory requirements #ns$ b 9age$ 4/

e.increased central planning of the strategic management process resources.

C/. The act of strengthening employeesF sense of effectiveness by these benefits e%cept that encouraging and rewarding them to participate in decision!ma"ing a.it provides an objective view of management problems. and e%ercise initiative and imagination is referred to as$ a.#uthoritarianism b.9roaction c.*mpowerment d.Transformation e.<elegation #ns$ c 9age$ 4= /:. Jow do line managers become 7owners8 of the strategy? a.by attending top manager meetings b.by gathering information about competitors c.by involvement in the strategic!management process d.by becoming a shareholder of the firm e.by buying off top managers #ns$ c 9age$ 4= /4. The changes that occurred when 1obert .ger too" over the reigns at <isney, demonstrate which current trend in Why ome 0irms <o 2o trategic 9lanning b.it creates a framewor" for internal communication among personnel. c.it encourages a favorable attitude toward change. d.it ma%imi'es the effects of adverse conditions and changes.

e.it gives a degree of discipline and formality to the management /G. Which of the following statements is false? of a business. #ns$ d 9age$ 4G! 4C a.+pen!mindedness is an important guideline for effective strategic management. b. trategic management must become a self!perpetuating socialist mechanism. c.2o organi'ation has unlimited resources. /?. What is not a reason given for poor or no strategic planning in d. trategic decisions require trade!offs. organi'ations? e. trategic management must be a self!reflective learning a.Wasting of time b.&eing content with success c.0ire!fighting d.9oor reward structure e.Trust of management #ns$ e 9age$ 4C!4/ /C. 9rinciples of conduct that guide decision!ma"ing are "nown as &usiness *thics and trategic Aanagement process. #ns$ b 9age$ ;:

a.human rights. b.the 3onstitution. c.business ethics. d.nonprofit organi'ation policies. e.social responsibility requirements. #ns$ c 9age$ ;:

b.using nonunion labor in a union shop c.dumping flawed products in a foreign mar"et d.insider trading e.all of the above #ns$ e 9age$ ;6

operations across national borders. a.<omestic firms b.Aultinational corporations c.9arent companies d.Bovernment!bac"ed companies e.0ranchises

4:>.*thical standards come out of __________ in a final analysis. #ns$ b 9age$ ;C //. # NnO ____________ can provide a basis on which policies can a.government be devised to guide daily decisions and behavior at the wor" site. b.competitors a.list of guidelines b.policy for safety c.vision statement d.code of business ethics e.annual objective #ns$ d 9age$ ;> 4::.&ecause they must ta"e the __________ of the firm, strategistsF salaries are high compared to those of other individuals in the organi'ation. a.moral ris"s b.social ris"s c.environmental ris"s d. societal criticism e. employee criticism #ns$ a 9age$ ;> 4:6.Ailitary strategy is based on an assumption of __________, whereas business strategy is based on an assumption of 4:4.What can be created by ethics training and an ethics culture? __________. a.3ompetitive responsibility b.3ompetitive advantage c. trategic advantage d.*mployee cooperation e.3omparative advantage #ns$ c 9age$ ;6 4:;.Which of these business actions is NareO always considered to be unethical? a.poor product or service safety The 2ature of Blobal 3ompetition 4:=.____________ are organi'ations that conduct business a.conflict; cooperation b.conflict; competition c.cooperation; conflict d.competition; conflict e.cooperation; competition #ns$ b 9age$ ;= 4:/.#ll of these are potential disadvantages of an international operation e%cept$ a.overestimated wea"nesses and underestimated strengths of competitors. b.differing languages, cultures and value systems. c.reduced tariffs and ta%es. d.comple%ity due to a multiple monetary system. e.all of these are potential disadvantages. #ns$ c 9age$ ;/ 3omparing &usiness and Ailitary trategy management. a.military b.government c.political d.social e.cultural #ns$ a 9age$ ;6 4:C.The greatest advantage of international operations is$ a.1educed tariffs and ta%es b. preading economic ris"s over a wider number of mar"ets c.#ccess to global technology, culture and business practices d.Baining new customers e.,ess!intense competition #ns$ d 9age$ ;C c.history and heritage d.sta"eholder analysis e.community involvement #ns$ c 9age$ ;6 4:G.#NnO __________ refers to a firm investing in international operations, while the _________ is the country where that business is conducted. a.parent company; host country b.home country; parent company c.parent country; host company d.host company; home country #ns$ a 9age$ ;C 4:?.# strong __________ heritage underlies the study of strategic e.e%porting company; importing company