LESSON 3 MIDTERMS

Question 1

are established with the intention of
capitalizing upon internal strengths and overcoming weaknesses.

Answer 1

Objectives and strategies

Question 2

A firm’s strengths that cannot be easily matched or imitated by
competitors are called

Answer 2

distinctive competencies.

Question 3

are designed in part to improve on a firm’s weaknesses,
turning them into strengths—and maybe even into distinctive
competencies.

Answer 3

Strategies

Question 4

requires gathering and assimilating information
about the firm’s management, marketing, finance/accounting,
production/operations, research and development (R&D), and
management information systems operations.

Answer 4

The internal audit

Question 5

may be the most important word in management.

Answer 5

Communication

Question 6

is a highly interactive process that requires
effective coordination among management, marketing,
finance/accounting, production/operations, R&D, and management
information systems managers.

Answer 6

Strategic management

Question 7

the strategic-management process is overseen by
strategists, success requires that managers and employees from all
functional areas work together to provide ideas and information. T OR F

Answer 7

TRUE

Question 8

He concluded that the internal audit is more important

Answer 8

Robert Grant

Question 9

approach to competitive advantage
contends that internal resources are more important for a firm than
external factors in achieving and sustaining competitive advantage.

Answer 9

The Resource-Based View

Question 10

In contrast to the I/O theory presented in the previous chapter,
proponents of the RBV view contend that organizational performance
will primarily be determined by internal resources that can be
grouped into three all-encompassing categories??

Answer 10

physical resources,
human resources, and organizational resources.

Question 11

include all plant and equipment, location,
technology, raw materials, machines

Answer 11

Physical resources

Question 12

all employees, training, experience,
intelligence, knowledge, skills, abilities

Answer 12

human resources

Question 13

firm structure, planning
processes, information systems, patents, trademarks, copyrights,
databases, and so on

Answer 13

organizational resources

Question 14

asserts that resources are actually what helps a firm
exploit opportunities and neutralize threats.

Answer 14

RBV theory

Question 15

For a resource to be valuable, it must be

Answer 15

(1) rare, (2) hard to
imitate, or (3) not easily substitutable.

Question 16

these three characteristics of
resources enable a firm to implement strategies that improve its
efficiency and effectiveness and lead to a sustainable competitive
advantage.

Answer 16

empirical indicators

Question 17

resources that other competing firms do not possess.

Answer 17

Rare resources

Question 18

can be defined as “a pattern of behavior that
has been developed by an organization as it learns to cope with its
problem of external adaptation and internal integration, and that has
worked well enough to be considered valid and to be taught to new
members as the correct way to perceive, think, and feel.”

Answer 18

Organizational culture

Question 19

Organizational culture captures the subtle, elusive, and largely
unconscious forces that shape a workplace. T OR F

Answer 19

TRUE

Question 20

is an aspect of an organization that can no longer be taken for
granted in performing an internal strategic-management audit
because culture and strategy must work together.

Answer 20

Culture

Question 21

if the firm’s culture is not supportive, strategic changes may
be effective or even productive. T OR F

Answer 21

FALSE

Question 22

A firm’s culture can become antagonistic to new strategies, with the
result being confusion and disorientation. T OR F

Answer 22

TRUE

Question 23

The functions of management consist of five basic activities

Answer 23

planning,
organizing, motivating, staffing, and controlling.

Question 24

exists when everyone pulls together as a team that knows
what it wants to achieve; synergy is the 2 + 2 = 5 effect.

Answer 24

Synergy

Question 25

is to achieve coordinated effort by defining task and authority relationships.

Answer 25

Organizing

Question 26

The organizing function of management can be viewed as consisting of three sequential activities

Answer 26

* breaking down tasks into jobs (work specialization), * combining jobs to form departments (departmentalization), * and delegating authority.

Question 27

dictates how resources are allocated and how objectives are established in a firm.

Answer 27

Organizational structure

Question 28

can be defined as the process of influencing people to accomplish specific objectives. explains why some people work hard and others do not

Answer 28

Motivating

Question 29

includes activities such as recruiting, interviewing, testing, selecting, orienting, training, developing, caring for, evaluating, rewarding, disciplining, promoting, transferring, demoting, and dismissing employees, as well as managing union relations.

Answer 29

Staffing

Question 30

includes all of those activities undertaken to ensure that actual operations conform to planned operations

Answer 30

Controlling

Question 31

An answer of no to any question could indicate a potential strengths. T OR F

Answer 31

FALSE (WEAKNESS)

Question 32

can be described as the process of defining, anticipating, creating, and fulfilling customers’ needs and wants for products and services

Answer 32

Marketing

Question 33

the examination and evaluation of consumer needs, desires, and wants. It nvolves administering customer surveys, analyzing consumer information, evaluating market positioning strategies, developing customer profiles, and determining optimal market segmentation strategies.

Answer 33

Customer analysis

Question 34

can reveal the demographic characteristics of an organization’s customers.

Answer 34

Customer profiles

Question 35

includes many marketing activities, such as advertising, sales promotion, publicity, personal selling, sales force management, customer relations, and dealer relations.

Answer 35

Selling

Question 36

includes activities such as test marketing; product and brand positioning; devising warranties; packaging; determining product options, features, style, and quality; deleting old products; and providing for customer service. Product and service planning is particularly important when a company is pursuing product development or diversification.

Answer 36

Product and service planning

Question 37

includes warehousing, distribution channels, distribution coverage, retail site locations, sales territories, inventory levels and location, transportation carriers, wholesaling, and retailing.

Answer 37

Distribution

Question 38

is the systematic gathering, recording, and analyzing of data about problems relating to the marketing of goods and services.

Answer 38

Marketing research

Question 39

which involves assessing the costs, benefits, and risks associated with marketing decisions

Answer 39

Cost/benefit analysis

Question 40

Is often considered the single best measure of a firm’s competitive position and overall attractiveness to investors.

Answer 40

Financial condition

Question 41

The functions of finance/accounting comprise three decisions:

Answer 41

the investment decision, the financing decision, and the dividend decision.

Question 42

is the most widely used method for determining an organization’s strengths and weaknesses in the investment, financing, and dividend areas.

Answer 42

Financial ratio analysis

Question 43

is the allocation and reallocation of capital and resources to projects, products, assets, and divisions of an organization

Answer 43

The investment decision, also called capital budgeting

Question 44

determines the best capital structure for the firm and includes examining various methods by which the firm can raise capital (for example, by issuing stock, increasing debt, selling assets, or using a combination of these approaches).

Answer 44

financing decision

Question 45

concern issues such as the percentage of earnings paid to stockholders, the stability of dividends paid over time, and the repurchase or issuance of stock

Answer 45

Dividend decisions

Question 46

consists of all those activities that transform inputs into goods and services.

Answer 46

Production / Operation

Question 47

deals with inputs, transformations, and outputs that vary across industries and markets.

Answer 47

Production/operations management

Question 48

Production/operations activities often represent the largest part of an organization’s human and capital assets. T OR F

Answer 48

TRUE

Question 49

The fifth major area of internal operations that should be examined for specific strengths and weaknesses

Answer 49

research and development

Question 50

Information ties all business functions together and provides the basis for all managerial decisions. It is the cornerstone of all organizations. Information represents a major source of competitive management advantage or disadvantage.

Answer 50

Management Information Systems

Question 51

in which total revenues minus total costs of all activities undertaken to develop and market a product or service yields value.

Answer 51

value chain

Question 52

A firm will be profitable as long as total revenues exceed the total costs incurred in creating and delivering the product or service. T O F

Answer 52

TRUE

Question 53

refers to the process whereby a firm determines the costs associated with organizational activities from purchasing raw materials to manufacturing product(s) to marketing those products.

Answer 53

Value chain analysis

Question 54

is an analytical tool used to determine whether a firm’s value chain activities are competitive compared to rivals and thus conducive to winning in the marketplace. It entails measuring costs of value chain activities across an industry to determine “best practices” among competing firms for the purpose of duplicating or improving upon those best practices.

Answer 54

Benchmarking

Question 55

A strategic- management audit of a firm’s external operations is vital to organizational health. T or F

Answer 55

FALSE (INTERNAL)

Question 56

This strategy-formulation tool summarizes and evaluates the major strengths and weaknesses in the functional areas of a business, and it also provides a basis for identifying and evaluating relationships among those areas

Answer 56

Internal Factor Evaluation (IFE) Matrix

Question 57

required in developing an IFE Matrix, so the appearance of a scientific approach should not be interpreted to mean this is an all-powerful technique.

Answer 57

Intuitive judgments

Question 58

the strategic-management process is overseen by strategists. T OR F

Answer 58

TRUE

Question 59

is the essential bridge between the present and the future that increases the likelihood of achieving desired results.

Answer 59

planning

Question 60

is the cornerstone of effective strategy formulation.

Answer 60

Planning