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BUS 411 > ch 2 > Flashcards

ch 2 Flashcards

1
Q

T/F
Vision and mission statements can often be found in the front of annual reports.

A

TRUE

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2
Q

T/F
Although it is important for companies to have a clearly defined mission statement, research
has shown that less than 50% of all companies have used a mission statement in the previous five years.

A

FALSE

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3
Q

T/F
The foundation for development of a comprehensive mission statement is provided by a clear
vision.

A

TRUE

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4
Q

T/F
The mission statement should be short preferably one sentence.

A

FALSE

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5
Q

T/F
When developing a vision statement, input should be received from as many managers as possible.

A

TRUE

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6
Q

T/F
If an organization chooses to have both a mission and a vision, the mission statement should
be established first.

A

FALSE

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7
Q

T/F
According to Peter Drucker, asking the question “What is our business?” is synonymous with asking the question “What is our vision?”

A

FALSE

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8
Q

T/F
A mission statement is a declaration of an organization’s “reason for being.”

A

TRUE

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9
Q

T/F
A mission statement, sometimes called a creed statement, can be defined as an enduring
statement of purpose that distinguishes one organization from other similar enterprises.

A

TRUE

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10
Q

T/F
Small, nonprofit organizations never develop mission statements.

A

FALSE

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11
Q

T/F
A mission statement is a declaration of an organization’s financial status.

A

FALSE

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12
Q

T/F
A mission statement can sometimes be called a statement of philosophy.

A

TRUE

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13
Q

T/F
Carefully prepared statements of vision and mission are widely recognized as the first step in strategic management.

A

TRUE

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14
Q

T/F
An important question a mission statement should answer is, “What do we want to become?”

A

FALSE

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15
Q

T/F
Whereas the mission statement answers the question, “What do we want to become?,” the
vision statement answers the question, “What is our business?”

A

FALSE

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16
Q

T/F
In order to motivate a workforce effectively, both profit and vision are needed.

A

TRUE

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17
Q

T/F
When developing a mission statement, it is usually advisable to involve as few managers as possible.

A

FALSE

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18
Q

T/F
The first step in the process of developing a mission statement is to ask all participants to
prepare what they believe the organization’s mission should be.

A

FALSE

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19
Q

T/F
Mission statements are sometimes difficult to derive because top management may disagree over company objectives.

A

TRUE

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20
Q

T/F
In multidivisional organizations, each division should develop a mission statement consistent
with and supportive of the corporate mission.

A

TRUE

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21
Q

T/F
Mission statements provide managers with a unity of direction that transcends individual,
parochial and transitory needs by promoting a sense of shared expectations among all levels and generations of employees.

A

TRUE

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22
Q

T/F
A mission statement promotes a sense of shared expectations among all levels and
generations of employees.

A

TRUE

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23
Q

T/F
When a company has been successful the question “What is our business?” becomes
unnecessary.

A

FALSE

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24
Q

T/F
A mission statement is usually just a simple statement of specific beliefs.

A

FALSE

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25
Q

T/F
A mission statement should be broad enough to reconcile differences among an organization’
s various stakeholders.

A

TRUE

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26
Q

T/F
Stakeholders of an organization include stockholders, customers and creditors, but not
competitors.

A

FALSE

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27
Q

T/F
Individuals who own stock in a corporation are considered stakeholders.

A

TRUE

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28
Q

T/F
Stakeholders both affect and are affected by an organization’s strategic decisions.

A

TRUE

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29
Q

T/F
Mission statements should always be stated with a high level of specificity.

A

FALSE

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30
Q

T/F
The relative attention an organization will devote to meeting the claims of various stakeholders is indicated in a good mission statement.

A

TRUE

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31
Q

T/F
Specificity might stifle creativity in the formulation of an acceptable mission or purpose.

A

TRUE

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32
Q

T/F
It is unusual for the claims and concerns of a company’s stakeholders to vary or conflict.

A

FALSE

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33
Q

T/F
In most cases, at least 500 words are required to effectively state a mission statement.

A

FALSE

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34
Q

T/F
An effective mission statement generates the impression a firm is successful, has direction,
and is worthy of time, support and investment.

A

TRUE

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35
Q

T/F
According to Vern McGinnis, an effective mission statement should define what the
organization is and what the organization aspires to be

A

TRUE

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36
Q

T/F
Having a clear mission and vision can provide a basis for a company’s internal and external
assessment.

A

TRUE

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37
Q

T/F
Good mission statements identify the utility of a firm’s products to its customers.

A

TRUE

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38
Q

T/F
Attracting customers is a major reason for developing a mission statement.

A

TRUE

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39
Q

T/F
AT&T’s mission statement focuses on telephones rather than on communication.

A

TRUE

40
Q

T/F
A mission statement that is limited enough to exclude some ventures is a poor mission
statement.

A

FALSE

41
Q

T/F
A good mission statement serves as a framework for evaluating both current and prospective
activities.

A

TRUE

42
Q

T/F
The operating philosophy of organizations should be to develop a product and then try to find a market for it.

A

FALSE

43
Q

T/F
One of the benefits of having a clear mission and vision is promoting a sense of shared
expectations among all managers and employees.

A

TRUE

44
Q

T/F
According to George Steiner, vagueness has no place in a good mission statement.

A

FALSE

45
Q

T/F
A mission statement should be broad in scope, since concrete specification could be the base for rallying opposition.

A

TRUE

46
Q

T/F
Union Pacific’s mission statement focuses on transportation rather than on railroads because
good mission statements identify the utility of a firm’s products to its customers.

A

TRUE

47
Q

T/F
The utility statement, “Do not offer me attractive looks; offer me clothes,” is relevant in developing a mission statement.

A

FALSE

48
Q

T/F
A firm’s philosophy in a mission statement addresses the question, “What is the firm’s
distinctive competence?”

A

FALSE

49
Q

T/F
A firm’s concern for employees in a mission statement addresses the question, “Is the firm
responsive to social, community, and environmental concerns?”

A

FALSE

50
Q

All of the following are mentioned as places where vision and mission statements can often
be found except:
A) SEC reports.
B) annual reports.
C) customer service agreements.
D) supplier agreements.
E) business plans.

A

A) SEC reports.

51
Q

According to recent studies, what percent of companies have used a mission statement
sometime in the past five years?

A

90%

52
Q

Which of these basic questions should a vision statement answer?

A

What do we want to become?

53
Q

Which type of statement should be created first and foremost?

A

Vision

54
Q

The ideal length of a vision statement is

A

one sentence.

55
Q

What is the first step in the comprehensive strategic-management model?

A

Developing vision and mission statements

56
Q

According to the comprehensive strategic-management model, which step needs to be
completed immediately following the establishment of long-term objectives?

A

Generating, evaluating, and selecting strategies

57
Q

The purpose of a mission statement is to declare all of these except
A) a reason for being.
B) an annual financial plan.
C) a statement of purpose.
D) a statement of beliefs.
E) whom it wants to serve.

A

B) an annual financial plan

58
Q

As indicated in the strategic-management model, a clear ________ is needed before alternate
strategies can be formulated and implemented.

A

mission statement

59
Q

A business’s mission is the foundation for all of the following except:
A) priorities.
B) strategies.
C) plans.
D) employee wage rates.
E) work assignments.

A

D) employee wage rates.

60
Q

The mission statement answers which question?

A

What is our business?

61
Q

The vision statement answers which question?

A

What do we want to become?

62
Q

In the process of developing a mission statement, it is important to involve
A) as few managers as possible.
B) as many managers as possible.
C) upper-level management only.
D) lower-level management only.
E) the board of directors only.

A

B) as many managers as possible.

63
Q

The process of developing a vision and mission statement often includes which of these as
the first activity?
A) Requesting that managers modify the current document
B) Asking managers to read selected articles about mission statements
C) Asking managers to prepare a mission statement for the organization
D) Having a brainstorming session on whether the organization should have a mission statement
E) Merging several mission statements into one document

A

B) Asking managers to read selected articles about mission statements

64
Q

After a draft mission statement has been developed, it is important to
A) ask managers to read several articles about mission statements as background information.
B) vote on the mission statement.
C) ask managers to prepare a mission statement for the organization.
D) ask managers to seek support for the mission statement from their subordinates.
E) request modifications, additions and deletions to the mission statement.

A

E) request modifications, additions and deletions to the mission statement.

65
Q

What can be used to promote unbiased views and to manage the development of the mission statement more effectively?

A

An outside facilitator

66
Q

According to Campbell and Yeung, what is/are most likely associated with behavior and the
present?

A

Mission

67
Q

A study by Rarick and Vitton found that firms with a formalized mission statement have
________ the average return on shareholders’ equity compared to those firms without a
formalized mission statement.

A

twice

68
Q

Business Week reports that firms using mission statements have a ________ percent higher
return on certain financial measures than those without such statements.

A

30

69
Q

King and Cleland recommend that organizations carefully develop a written mission
statement for all of the following reasons except
A) to provide a basis for allocating organizational resources.
B) to establish a general tone or organizational climate.
C) to ensure unanimity of purpose within the organization.
D) to ensure a command-and-control structure.
E) to facilitate the translation of objectives into a work structure involving the assignment of
tasks to responsible elements within the organization.

A

D) to ensure a command-and-control structure.

70
Q

When developing a mission statement, what is needed before people can focus on specific
strategy formulation activities?
A) Negotiation
B) Compromise
C) Eventual agreement
D) A and B only
E) All of the above

A

E) All of the above

71
Q

What is the best time to develop a mission statement?

A

When the firm is successful

72
Q

A change in mission always leads to changes in
A) objectives.
B) strategies.
C) organization.
D) behavior.
E) all of the above.

A

E) all of the above.

73
Q

Which group would be classified as stakeholders?
A) Governments
B) Creditors
C) Suppliers
D) Employees
E) All of the above

A

E) All of the above

74
Q

All stakeholders
A) have claims and concerns about an organization, but these claims and concerns vary.
B) have the same claims and concerns about an organization.
C) have ownership rights in an organization.
D) have the same voting rights in an organization.
E) have environmental concerns as their top priority.

A

A) have claims and concerns about an organization, but these claims and concerns vary.

75
Q

A good mission statement has

A

a customer orientation.

76
Q

The potential for creative growth in an organization can be limited by

A

a mission statement that is too specific.

77
Q

An overly general mission statement that ________ could be dysfunctional.

A

does not exclude any strategy alternatives

78
Q

The general public is especially interested in ________, whereas stockholders are more
interested in ________.

A

social responsibility; profitability

79
Q

In order to appeal to its diverse stakeholders, an effective mission statement should be

A

reconciliatory.

80
Q

In developing a mission statement, arousing emotion

A

is important.

81
Q

According to McGinnis, a mission statement should be all of the following except:
A) it should be specific enough to control creative growth.
B) it should be stated in clear terms.
C) it should distinguish an organization from all others.
D) it should define what an organization is.
E) it should serve as a framework for evaluating both current and prospective activities.

A

A) it should be specific enough to control creative growth.

82
Q

An effective mission statement is all of the following except:
A) it reflects judgments about future growth directions that are based upon forward-looking
external and internal analyses.
B) it provides useful criteria for selecting among alternative strategies.
C) it provides a basis for generating and screening strategic options.
D) it is static in orientation.
E) it should be enduring.

A

D) it is static in orientation.

83
Q

Good mission statements identify the ________ of a firm’s products to its customers.

A

utility

84
Q

Which of these examples of a mission statement’s focus area does not identify the utility of
the firm’s products to its customers?
A) AT&T focuses on communication rather than telephones.
B) Exxon/Mobil focuses on oil and gas rather than energy.
C) Union Pacific focuses on transportation rather than railroads.
D) Universal Studios focuses on entertainment rather than movies.
E) Starbucks focuses on the café experience rather than coffee.

A

B) Exxon/Mobil focuses on oil and gas rather than energy.

85
Q

All of the following utility statements are relevant in developing a mission statement except:
A) Do not offer me shoes. Offer me comfort for my feet and the pleasure of walking.
B) Do not offer me furniture. Offer me comfort and the quietness of a cozy place.
C) Do not offer me ideas, emotions, ambience, feelings, and benefits. Offer me things.
D) Do not offer me books. Offer me hours of pleasure and the benefit of knowledge.
E) Do not offer me clothes. Offer me attractive looks.

A

C) Do not offer me ideas, emotions, ambience, feelings, and benefits. Offer me things.

86
Q

According to a classic description of the purpose of a business, it is the ________ who
determines what a business is.

A

customer

87
Q

What a ________ is decisive and determines what a business is, and what the customer buys
and considers value is ________.
A) business thinks it produces; never a product
B) business thinks it produces; what a product or service does for him or her
C) customer thinks s/he is buying; always a product
D) customer thinks s/he is buying; always utility
E) business thinks a customer wants; never what a product or service does for him or her

A

C) customer thinks s/he is buying; always a product

88
Q

An effective mission statement should do all of the following except:
A) include monetary amounts, numbers, percentages and ratios.
B) be inspiring.
C) reveal that the firm is environmentally responsible.
D) identify the utility of a firm’s products.
E) be reconciliatory.

A

A) include monetary amounts, numbers, percentages and ratios.

89
Q

The following excerpt from a mission statement illustrates which of the nine essential
components of a mission statement?
“We believe our first responsibility is to the doctors, nurses, patients, mothers, and all others who
use our products and services.”

A

Customers

90
Q

Which of the following illustrates the self-concept component of a mission statement?
A) To earn our customer’s loyalty, we listen to them, anticipate their needs, and act to create
value in their eyes.
B) We are committed to leapfrogging ongoing competition within 1,000 days by unleashing the
constructive and creative abilities and energies of each of our employees.
C) Our emphasis is on North American markets, although global opportunities will be explored.
D) To compensate its employees with remuneration and fringe benefits competitive with other
employment opportunities in its geographical area and commensurate with their contributions
toward efficient corporate operations.
E) In this respect, the company will conduct its operations prudently and will provide the profits
and growth which will assure our ultimate success.

A

B) We are committed to leapfrogging ongoing competition within 1,000 days by unleashing the
constructive and creative abilities and energies of each of our employees.

91
Q

Effective mission statements can vary in
A) length.
B) content.
C) format.
D) specificity.
E) all of the above

A

E) all of the above

92
Q

Which component of a mission statement addresses the firm’s distinctive competence or
major competitive advantage?

A

Self-concept

93
Q

Which component of a mission statement addresses the basic beliefs, values, aspirations,
and ethical priorities of the firm?

A

Philosophy

94
Q

Which question(s) are answered in an effective mission statement?
A) What is the purpose of our organization?
B) What is our company philosophy or self-concept?
C) What technology will we employ to achieve our objectives?
D) Who are the firm’s customers?
E) All of the above

A

E) All of the above

95
Q

Which of the following is not one of the nine recommended components of a mission
statement?
A) Strategies
B) Self-concept
C) Concern for employees
D) Markets
E) Customers

A

A) Strategies

96
Q

Effective and carefully planned mission statements

A

stand the test of time.

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