Chapter Final Quizzes

Question 1

A term used in organizations whose operating units don’t meet all the SBU classification criteria are sometimes referred to as

Answer 1

Strategic growth units

Question 2

A group of independent grocery stores merging into one company is an example of a strategic alliance

Answer 2

False

Question 3

The Cally Company bought a company in Mexico to distribute its products in South American markets. The new company is called CalMex. This is an example of an

Answer 3

Acquisition

Question 4

A multi-line of business organization is a company that:

Answer 4

operates in several industries

Question 5

Diversification may lessen the impact of an industry downturn

Answer 5

True

Question 6

In the Boston Consulting Group matrix, an SBU with high relative market share in a low growth industry would be classified as a

Answer 6

Cash Cow

Question 7

Mergers/acquisitions involve short term commitments of companies to work together on a project

Answer 7

False

Question 8

In the BCG matrix, which of the following is not a classification of an SBU?
cash cows
stars
problem children
stray cats

Answer 8

stray cats

Question 9

Introducing new products to new markets is referred to as penetration strategy

Answer 9

False

Question 10

In diversification strategies, management has the least knowledge of products and markets and may have limited knowledge of the financial resources needed to be successful

Answer 10

True

Question 11

A manufacturer of men’s clothing is opening a chair of retail men’s clothing stores. This is an example of

Answer 11

vertical integration strategy

Question 12

Diversification is favorable strategy when the current industry is experiencing significant growth

Answer 12

False

Question 13

A retrentchment strategy and a divestment strategy are both interchangeable terms

Answer 13

False

Question 14

In the GE Nine Cell Matrix, industry attractiveness is determined by which of the following

Answer 14

market size and growth

Question 15

In a joint venture, organizations seek to combing strengths or overcome weaknesses of their individual struggles

Answer 15

true

Question 16

Which of the following are outcomes of classifying each SBU into one of the 9 cells?

Answer 16

each SBU’s characteristics and strategic implications

Question 17

Once an organization has defined its SBUs, strategic plans:

Answer 17

should be developed for each separate SBU

Question 18

A stronger management team is needed for product development than diversification

Answer 18

False

Question 19

In determining the strategy for each SBU, a firm must consider

Answer 19

synergies among SBUs

Question 20

The strategic plan includes several __________ financial statements to help the entrepeneur or manager to estimate sales and profits

Answer 20

pro-forma

Question 21

The statement of cash flow is arguably the most important financial statement for a business

Answer 21

True

Question 22

The cash flow projection is an important tool as it indicates when the business expenses are too high or when you might need a short-term loan to deal with a cash shortage

Answer 22

True

Question 23

Among the many financial ratios used in financial analysis, the three main categories are balance sheet ratios, profitability ratios, and

Answer 23

asset management ratios

Question 24

Companies that choose a differentiation strategy will enhance their product with unique features or provide additional services that allow the company to charge a higher price for their product. an example of this would be

Answer 24

automaker Tesla offering consumers premium quality electric vehicles

Question 25

For a single line of business, the corporate strategy and business level strategy are the same

Answer 25

True

Question 26

has long been part of 3M corporate strategy and has enabled the company to develop more than 55,000 products

Answer 26

Strong R&D Division

Question 27

Value Chain Analysis is a process where the company analyzes all the company from purchase of raw materials to manufacturing and marketing their products

Answer 27

True

Question 28

In business strategy, a market follower enters the market with a "copycat" product and with less marketing effort. Some refer to this as __________ and liken the process to a lion on the plains of Africa waiting for a gazelle before striking

Answer 28

market hunting

Question 29

The breakeven point in units is calculated as Breakeven point (units)= total fixed costs/(price-variable costs per unit)

Answer 29

True

Question 30

An example of a corporation operating in a single industry would be Home Depot

Answer 30

True

Question 31

There is a potential danger to operating in a single industry because if there should be an economic downturn

Answer 31

True

Question 32

Three of the most important financial statements include the income statement, balance sheet, and

Answer 32

statement of cash flow

Question 33

Companies or organizations with weak cultures often exhibit low employee turnover

Answer 33

False

Question 34

Each of the following is true regarding the income statement except

Answer 34

the income statement replaces the statement of cash flow

Question 35

Benchmarking measures value chain activities across an industry in order to determine best practices

Answer 35

true

Question 36

__________ the number of units that the firm must sell so total revenue equals total costs

Answer 36

break-even point

Question 37

Strategic planning and management has little to do with human resources

Answer 37

False

Question 38

Financial analysis measures past and projected future financial performance

Answer 38

True

Question 39

Research has found that implementation was improved by

Answer 39

simplifying measures and measuring the right things

Question 40

the culture of some visionary companies is like a cult-like culture around core ideologies and individuals who are charismatic individuals

Answer 40

False

Question 41

A circular organizational structure can be used to create organzational democracy

Answer 41

True

Question 42

Internal organizations often use hybrid forms of an organizational structure that may incorporate several types of structures

Answer 42

True

Question 43

Which of the following is an advantage of the divisional structure?

Answer 43

faster adaptation to changes in regional environmental changes

Question 44

Which of the following is a list of factors that affect resistance to change and innovation?

Answer 44

players, funding, policy, technology, customers, and accountability

Question 45

A matrix organization doesn't work well in companies that need to manage a lot of projects

Answer 45

False

Question 46

An SBU organizational structure can lead to a proliferation of staff and duplication of activities

Answer 46

True

Question 47

Through the implementation process people are assigned tasks, given authority, and the resources need to create the activities to bring the plans to "life"

Answer 47

True

Question 48

One of the most important considerations in implementing plans is to foster ownership of the process

Answer 48

true

Question 49

Which of the following is an advantage of the matrix form of organization?

Answer 49

training opportunities for strategic managers

Question 50

structure refers to the formal arrangement of activities in an organization

Answer 50

true

Question 51

Action plans help assign responsibility for specific tasks to specific individuals

Answer 51

true

Question 52

In a divisional organizational structure, managers are given authority and responsibility to formulate implementation but not strategies for their division

Answer 52

False

Question 53

Clan members believe it is in their best interest to operate as a lone wolf to enhance creativity in the organization

Answer 53

False

Question 54

Subordinates that have dual assignments to the business/product line/project managers and their functional managers, fall under this structural design:

Answer 54

matrix structure

Question 55

Improvements are better ways of satisfying customers

Answer 55

True

Question 56

Individuals who are not willing to try news tasks or ways of doing tasks are

Answer 56

change resistors