SET 1

END-OF-SEMESTER EXAMINATION
SEMESTER 2, 2011/2012 SESSION
KULLIYYAH OF ECONOMICS AND MANAGEMENT SCIENCES
Programme

BBA/KOS

Level of Study

3-4

Time
Duration

:
:

9.00 a.m. 12.00 noon.

3 Hr(s) 0 Min(s)

Date

31/05/2012

Course Code

MGT 4760/K

Section

1-6

Course Title

STRATEGIC
MANAGEMENT
(This Question Paper Consists of 19 Printed Pages with 3 Sections)
INSTRUCTION(S) TO CANDIDATES
DO NOT OPEN UNTIL YOU ARE ASKED TO DO SO

Section A

Section B

Section C

Shade / Blacken the correct answer in the answer sheet provided. There is
only one correct answer for each question. (Total marks = 40)
Answer any TWO (2) questions in the answer sheets provided. Each
question carries 15 marks. Please be organized, precise, concise and
coherent. (Total marks = 30)
Answer All questions in the answer sheets provided. Please be organized,
precise, concise and coherent. (Total marks = 30)

ANY FORM OF CHEATING OR ATTEMPT TO CHEAT IS A SERIOUS OFFENCE WHICH MAY

LEAD TO DISMISSAL
APPROVED BY:

EMERITUS PROF. DR. MOHAMED SULAIMAN

Head, Department of Business Administration
Kulliyyah of Economics and Management Sciences

SET 1
Section A

Shade / Blacken the correct answer in the answer sheet provided.

There is only one correct answer for each question.
(Total marks = 40)

1) The two internal dimensions represented on the axes of the SPACE Matrix are
A) stability position and industry position.
B) industry position and internationalization.
C) internationalization and competitive position.
D) competitive position and financial position.
E) financial position and stability position.
2) Which strategy would be most appropriate for a division classified as a Dog?
A) Market penetration
B) Market development
C) Product development
D) Retrenchment
E) Forward integration
3) Which of the following analytical tools consists of a nine-cell matrix?
A) Matching Matrix
B) Competitive Profile Matrix
C) SPACE Matrix
D) Grand Strategy Matrix
E) Internal-External Matrix
4) According to the Grand Strategy Matrix, organizations in which quadrant have a strong
competitive position but are in a slow-growth industry?
A) I
B) II
C) III
D) IV
E) V
5) Which analytical tool determines the relative attractiveness of various strategies based on the
extent to which key external and internal critical success factors are capitalized?
A) BCG Matrix
B) SPACE Matrix
C) SWOT Matrix
D) IE Matrix
E) QSPM

SET 1
6) What includes the set of shared values, beliefs, attitudes, customs, norms, personalities, heroes
and heroines that describe a firm?
A) Strategy
B) Culture
C) Mission
D) Objectives
E) QSPM
7) Which of these is a limitation of QSPM?
A) Only a few strategies can be evaluated simultaneously.
B) It is prohibitively expensive.
C) It requires intuitive judgments and educated guesses are required.
D) Sets of strategies must be examined in reverse order.
E) It requires equal participation from the entire organization.
8) Considerable time and effort should be devoted to assuring objectives are well conceived
because they represent the basis for
A) monitoring progress toward long-term objectives.
B) establishing divisional priorities.
C) allocating resources.
D) evaluating managers.
E) all of the above
9) Which phrase would most likely be incorporated into written objective statements?
A) Maximize
B) Minimize
C) 10% increase
D) Adequate
E) All of the above
10) Policies
A) let both employees and managers know what is expected of them.
B) provide a basis for management control.
C) allow coordination across organizational units.
D) reduce the amount of time managers spend making decisions.
E) all of the above
11) A disagreement between two or more parties on one or more issues is called a(n)
A) integrated solution.
B) conflict.
C) compromise.
D) diffusion.
E) avoidance.

SET 1
12) What type of organizational structure do most small businesses follow?
A) Divisional structure by product
B) Functional structure
C) Divisional structure by customer
D) Strategic business unit
E) Matrix structure
13) A divisional structure by product is most effective when
A) special emphasis needs to be placed on specific products.
B) an organization offers few products.
C) an organization's products or services differ substantially.
D) special emphasis needs to be placed on specific services.
E) all of the above
14) What is the best divisional structure when a few major customers are of paramount
importance and many different services are provided to these customers?
A) By geographic area
B) By customer
C) By product
D) By process
E) By cost
15) Subdividing a market into distinct subsets of customers according to their needs and the way
they buy and use a product or service is known as
A) market penetration.
B) product diversification.
C) market segregation.
D) market segmentation.
E) positioning.
16) Looking for a vacant niche helps a company determine
A) its advertising budget.
B) the size of the marketing department.
C) the best place to position a product.
D) the best place to locate a new facility.
E) its projected R&D expenditures.
17) In the low earnings period, too much ________ in the capital structure of an organization can
endanger stockholders' return and jeopardize company survival.
A) debt
B) liquidity
C) equity
D) cash
E) tax liability

SET 1
18) The first step in performing projected financial analysis is to
A) prepare the projected balance sheet.
B) take an inventory of goods.
C) estimate increases in debt.
D) prepare the projected income statement.
E) calculate the projected net income.
19) Which of the following is not an accepted for determining a business's worth?
A) What the firm owns.
B) What the firm earns.
C) What the firm's return on investment has been.
D) What the firm will bring in the market.
E) All of the above are accepted.
20) In the context of a balance sheet, goodwill represents
A) a premium paid over the book value of an acquisition.
B) the value attached to a firm's reputation.
C) the excess of assets over liabilities.
D) the value associated with benefits from environmental programs.
E) the excess of current assets over liabilities.
21) What is the cornerstone of effective strategy evaluation?
A) Adequate and timely feedback
B) Quality and quantity of managers
C) Smaller ratio of top- to lower-level management
D) Evaluation preceding implementation stage
E) Punitive corrective actions
22) All of the following are reasons strategy evaluation is more difficult today except:
A) a dramatic increase in the environment's complexity.
B) the increasing number of variables.
C) the increase in the number of both domestic and world events affecting organizations.
D) the decreasing difficulty of predicting the future with accuracy.
E) the rapid rate of obsolescence of even the best plans.
23) Strategy-evaluation activities should ideally be performed
A) just on a periodic basis.
B) only at the onset of a problem.
C) on a continuous basis.
D) solely upon completion of major projects.
E) annually only.

SET 1
24) Changes in the organization's management, marketing, finance/accounting,
production/operations, R&D and MIS strengths and weaknesses should be the focus of a revised
A) mission.
B) IFE matrix.
C) vision.
D) EFE matrix.
E) EPM matrix.
25) Which of these is not a key financial ratio?
A) Market share
B) Production quality
C) Earnings per share
D) Asset growth
E) Return on equity
26) Research suggests that which of the following is one of the best ways to overcome
individuals' resistance to change in strategy evaluation?
A) Participation
B) Command-and-control
C) Laissez-faire system
D) Rational argument
E) Emotional reactions
27) All of the following are reasons to be completely open with the strategy process except
A) managers, employees and other stakeholders can readily contribute to the process.
B) investors, creditors and other stakeholders have greater basis for supporting a firm that is
open.
C) visibility promotes democracy whereas secrecy promotes autocracy.
D) participation and openness enhances understanding, commitment and communication within
the firm.
E) openness limits rival firms from imitating or duplicating the firm's strategies.
28) Business ethics, _______, and sustainability issues are interrelated and impact all areas of the
comprehensive strategic-management model.
A) social responsibility
B) social networking
C) fiscal irresponsibility
D) cultural indifference
E) None of the above

SET 1
29) Which of the following is not a way that companies can help create an ethical culture in their
organization?
A) Outlining ethical expectations
B) Giving examples of ethical situations that commonly occur in their businesses
C) Providing code-of-conduct manuals
D) Creating interactive exercises that pose hypothetical ethical dilemmas
E) Discouraging whistle-blowing
30) Ethics training programs should contain which of the following?
A) Messages from the CEO or business owner emphasizing ethical business practices
B) The development and discussion of codes of ethics
C) Procedures for discussing unethical behavior
D) Procedures for reporting unethical behavior
E) All of the above
31) It has become _______, since uniform standards defining environmentally responsible
company actions are rapidly being incorporated into our legal landscape.
A) more and more difficult for firms to make "green" claims when their actions are not
substantive or even true
B) increasingly easy for firms to get away with placing "green" terminology on their products
without any oversight
C) customary for firms to use terms like "organic," "green," or "earth-friendly" when their
products don't warrant it
D) more common for consumers to be cynical about corporate environmental claims
E) impossible for firms to omit "green" terminology from their labels
32) Preserving the environment should be a permanent part of doing business for which of the
following reasons?
A) Consumer demand for environmentally safe products and packages is low.
B) Public opinion demanding that firms conduct business in ways that preserve the natural
environment is weak.
C) Federal and state environmental regulations are fairly simple and static.
D) Many consumers, suppliers, distributors, and investors shun doing business with
environmentally strong firms.
E) More lenders are examining the environmental liabilities of businesses seeking loans.
33) A proactive environmental policy is likely to lead to
A) higher cleanup costs.
B) conservation of energy.
C) reduced customer loyalty.
D) numerous liability suits.
E) higher medical costs.

SET 1
34) In an industry that is, or is rapidly becoming global, the riskiest possible posture is to
A) become a global competitor.
B) remain a domestic competitor.
C) remain a global competitor.
D) expand beyond the role of domestic competitor.
E) None of the above
35) The _______ opportunities and threats that face a multinational corporation are almost
limitless.
A) social
B) cultural
C) governmental
D) political
E) all of the above
36) All of the following are potential advantages to initiating, continuing, and/or expanding
international operations except:
A) firms can gain new customers for their products.
B) foreign operations can absorb excess capacity, reduce unit costs, and spread economic risks
over a wider number of markets.
C) foreign operations can allow firms to establish low-cost production facilities in locations close
to raw materials and/or cheap labor.
D) foreign operations could be seized by nationalistic factions.
E) foreign operations may result in reduced tariffs, lower taxes, and favorable political treatment.
37) _______ countries are market leaders in labor-intensive industries and _______ offers
abundant natural resources and rapidly developing markets.
A) East Asian; Brazil
B) South American; Germany
C) East Asian; Germany
D) South American; Brazil
E) European; Japan
38) What percent of the world's population lives outside of the United States?
A) 50
B) 65
C) 70
D) 85
E) 95
39) Which of the following is not true regarding European workers and workplaces?
A) Most European workers are unionized.
B) Most European workers enjoy more frequent vacations and holidays than U.S. workers.
C) Guaranteed permanent employment is typically a part of employment contracts in Europe.
D) Many Europeans respond enthusiastically to pay-for-performance, commission salaries, and
objective measurement reward systems.
E) Many Europeans find the notion of team spirit difficult to grasp.
8

SET 1
40) Which of the following is not true concerning the Japanese concept of Wa?
A) Nearly all corporate activities in Japan encourage Wa among managers and employees.
B) Discussions potentially disruptive to Wa are generally conducted in very formal settings.
C) The potential attractiveness of alternative business decisions are evaluated in terms of their
long-term effect on the group's Wa.
D) Entertaining is an important business activity in Japan because it strengthens Wa.
E) The Wa concept involves group loyalty and consensus.

SET 1
Section B

Answer any TWO (2) questions in the answer sheets provided. Each
question carries 15 marks. Please be organized, precise, concise and
coherent.
(Total marks = 30)

QUESTION 1
a. Explain the steps required to develop the SPACE Matrix.
(9 marks)
b. Draw the strategy profile for a company that has FP (financial position) of +4 and IP
(Industry position) of +3. What strategies should this company follow?
(3 marks)
c. Draw the strategy profile for a company that has a CP (competitive position) of -2 and SP
(stability position) of -5. What strategies would you suggest for this company?
(3 marks)
[Total: 15 marks]

QUESTION 2
a. List and explain the five steps required for effective product positioning. Draw an
example of a product-positioning matrix for an organization of your choice.
(7 marks)
b. Identify and explain Rumelt's four criteria for evaluating strategies.
(8 marks)

[Total: 15 marks]

10

SET 1
QUESTION 3
Social responsibility, environmental sustainability, and what not? What are the limits? said a
company founder, who is also chairman of the board, and chief executive of the company.
a. Define social responsibility (SR) and environmental sustainability (ES), separately.
(5 marks)
b. Explain whether the two concepts are related, and if so in what way they could be related to
the bottom line of a company.
(5 marks)
c. Evaluate environmental sustainability from the perspective of one of the Islamic concepts that
you are familiar with, specifically Al Quran, Al Sunnah, Al Hadith, Ijtihad, or Ijma.
(5 marks)
[Total: 15 marks]

11

SET 1
Section C

Answer All questions in the answer sheets provided. Please be

organized, precise, concise and coherent. (Total marks = 30)

CASE ANALYSIS

A Horror Show at the Cinemaplex?

QUESTION 1
By analyzing the five competitive forces, what level of competition (low, moderate, or high) can
be anticipated amongst industry rivals? Justify your conclusion by offering two (2) points.
(15 marks)
QUESTION 2
Provide two (2) recommendations to theater operators to improve their likelihood of future
success. Discuss.
(15 marks)

[Total: 30 marks]

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