Multiple Choice Questions
1. A firm pursuing market development would
likely increase investments in:
A. Product
development
B. Basic
R&D
C. Process
development
D. A new
sales force
E. Applications
development
2. Which of the following organizations is
most likely to actively seek growth?
A. Family?owned
businesses
B. Businesses
which are content with their current market share
C. Defender
firms
D. Reactor
firms
E. Prospector
firms
3. Firms often remain in a low-growth
industry in which efforts to increase sales cost more than they are worth if
the industry:
A. Has low
profits
B. Has
high exit barriers
C. Has
high entry barriers
D. Has
dynamic equilibrium
E. Is
unsegmented
4. Strategy formulation responsibilities at
the business level include all of the following except:
A. Establishment
and communication of goals
B. Identification
of strengths and weaknesses
C. Identification
of opportunities and threats
D. Management
of the corporate portfolio
E. Establishment
of a strategic posture
5. Which of the following is an accurate
statement about economies of scale?
A. Production
costs per unit are less in a large facility than in a small facility
B. The
more products a company makes, the lower its variable production costs
C. Economies
of scale are identical to throughput
D. Doubling
factory size typically doubles fixed costs
E. Companies
with economies of scale have high capacity utilization
6. A
learning curve implies:
A. An
employee can easily learn to do several different jobs within a firm
B. Employees
learn to do jobs more efficiently with repetition
C. Employees
who are slow to learn new tasks will require additional training time
D. The
time required to complete a task will decrease as a predictable function of the
number of times the task is repeated
E. B and D are both correct
7. Which of the following is an advantage of
pursuing cost leadership?
A. Sales
always increase with increasing amounts of output
B. Loss of
sales does not reduce scale benefits
C. The
strategy easily accommodates changes in the market
D. Firms
invest heavily in differentiating their products
E. A firm
may charge the same price as its competitors but make a higher profit
8. Which of the following typically is a
corporate?level strategy formulation responsibility?
A. Establishment
of short?term operating goals
B. Choice
of generic strategy for each business unit
C. Selection
of businesses in which to compete
D. Direct
supervision of research and development programs
E. None
of the above
9. As corporate-level strategies develop,
any of the following strategies might be expected to follow a concentration
strategy except:
A. Vertical
integration
B. Diversification
of markets
C. Diversification
of products/services
D. Diversification
of resource conversion processes
E. Restructuring
10. Which
of the following is not considered a corporate-level strategy?
A. Focus
through differentiation.
B. Concentration
C. Related
diversification
D. Unrelated
diversification
E. None
of the above. These are all
corporate-level strategies.
11. Which
of the following is strength of a concentration strategy?
A. Product
obsolescence will rarely affect the firm
B. Executives
can develop in-depth knowledge of the business
C. Industry
maturity will rarely affect the firm
D. Firms
pursuing this strategy are rarely acquired by another firm
E. Bankruptcy
risk is minimal
12. Which
of the following is a weakness of a concentration strategy?
A. The
organization cannot develop a distinctive competence
B. Organizational
resources are severely strained
C. External
stakeholders are easily confused by the firm’s strategic agenda
D. There
is high ambiguity regarding strategic direction
E. The
strategy is risky when the environment is unstable
13. According
to the theory of transaction cost economics, a market is likely to fail if:
A. There
are a large number of suppliers
B. All
parties to the transaction have the same level of knowledge
C. The
future is highly uncertain
D. The
future is highly certain
E. Assets
may be used to produce a variety of products or services.
14. Related
diversification differs from unrelated diversification in which of the
following ways?
A. Related
diversification is connected to the organization’s dominant business; unrelated
diversification is not
B. Unrelated
diversification is connected to the organization’s dominant business; related
diversification is not
C. Single
business firms use related diversification and never use unrelated
diversification
D. Single
business firms use unrelated diversification and never use related
diversification
E. A firm
that uses related diversification always uses vertical integration; a firm that
uses unrelated diversification never uses vertical integration
15. When an
organization can use the same physical resources for multiple purposes, it is
taking advantage of:
A. Intangible
relatedness
B. Tangible
relatedness
C. Limited
scope
D. Dominant
industry relationships
E. Goodwill
16. Which
types of strategies are used to implement the growth and competitive strategies
of the firm?
A. Focus
strategies
B. Generic
strategies
C. Functional
strategies
D. Corporate
strategies
E. Indirect
strategies
17. Which
functional area is largely responsible for spanning the boundary of the
organization to interact with customers?
A. Marketing
B. Finance
C. Operations
D. Information
systems
E. Human
resources
18. In most
organizations, research and development strategy deals with all of the
following except:
A. Product
development
B. Applications
development
C. Basic
research
D. Human
resource development
E. Process
development
19. The _____________ addresses the plan for
aligning product and service operations with business strategies.
A. Information
systems strategy
B. R&D
strategy
C. Operations
strategy
D. Marketing
strategy
E. Human
resources strategy
20. Well-developed
functional strategies should have all of the following characteristics except:
A. They are inexpensive to implement
B. Decisions
made within each functional area should represent a consistent pattern
C. They should be consistent with the
strategies of the business.
D. Decisions
made in one functional area should be consistent with decisions made in other
functional areas.
E. These are all true. There is no exception.
21. If a
firm is very decentralized and has a web of independent offices in each region,
with little or no formal hierarchy, which business-level structure is it likely
to have?
A. Functional
B. Product/market
C. Project
matrix
D. Network
E. Manufacturing
22. Which
business-level structure is organized around outputs and has a high level of
centralization?
A. Functional
B. Product/market
C. Project
matrix
D. Network
E. TQM
23. A
strategic control system helps managers to assess the relevance of the
organization’s strategy:
A. To its
profitability
B. To its
progress in the accomplishment of its goals
C. To the
needs of its employees
D. In
order to specify product line extensions
E. To its
competitors’ strategies
24. When managers
are trying to anticipate changes in the internal and external environments,
they are using:
A. Feedforward
control
B. Vertical
control
C. Feedback
control
D. Horizontal
control
E. Integrative
control
25. Which
type of control provides managers with information concerning outcomes from
organizational activities?
A. Feedforward
control
B. Vertical
control
C. Feedback
control
D. Horizontal
control
E. Integrative
control
26. Common
feedback control systems include all of the following except:
A. Strategic
surveillance
B. Ratio
analysis
C. Financial
audits
D. Budgets
E. Social
audits
27. Feedforward
control systems are especially important because of:
A. Environmental
discontinuities
B. Stability
in the environment
C. High
profits
D. The
decreasing role of government regulation in the world economy
E. Social
audits
28. A
control system that consists of policies and guidelines to guide the behavior
of organizational members is:
A. Bureaucratic
control
B. Output
control
C. Clan
control
D. Process
control
E. Human
resources systems
29. A
control system that is based on socialization of organizational members is:
A. Bureaucratic
control
B. Output
control
C. Clan
control
D. Process
control
E. Human
resources systems
30. Mental
models:
A. Are valid as long as the premises that
underlie them remain the same
B. Are derived from experiences
C. May prevent executives from recognizing
the need for change
D. All of the above
E. A and B are correct but not C
