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mgmt ch 1

Terms in this set (83)

The text addresses two perspectives of leadership as well as their implications. These two perspectives are


A. romantic and unromantic.

B. romantic and internal control.

C. external control and unromantic.

D. romantic and external control.
D. romantic and external control.
A CEO made a lot of mistakes in assessing the market and the competitive conditions and improperly redesigning the organization into numerous business units. Such errors led to significant performance declines. According to the text, this example illustrates the __________ perspective of leadership.


A. external control

B. romantic

C. internal mechanism

D. operational
B. romantic
According to the external control view of leadership, which of the following factors would not be considered an external factor that might positively or negatively affect a firm's success?


A. economic downturns

B. governmental legislation

C. outbreak of war

D. company employee morale
D. company employee morale
Melvin Alexander, executive director of Principled Solutions Enterprise, a management consulting firm specializing in health care, suggests that environmental changes oblige firms to make strategic changes in order to survive. Which of the following is one of the strategic changes he foresees will occur in the next three to five years?


A. changes in the behavior of the health care consumers

B. reduction in the number of available medical doctors

C. increases in the number of locations of health care facilities

D. decreases in information technology investment
A. changes in the behavior of the health care consumers
According to the text, the strategic management process entails three ongoing processes. They are


A. analyses, actions, and synthesis.

B. analyses, decisions, and actions.

C. analyses, evaluation, and critique.

D. analyses, synthesis, and decisions.
B. analyses, decisions, and actions.
Management innovations such as total quality, benchmarking, and business process reengineering cannot lead to sustainable competitive advantage because


A. companies that have implemented these techniques have lost money.

B. there is no proof that these techniques work.

C. they cost too much money and effort to implement.

D. every company is trying to implement them.
D. every company is trying to implement them.
The organizational versus the individual rationality perspective suggests that objectives that are


A. good for a functional area are always good for the overall organization.

B. good for the overall organization are always best for a functional area.

C. best for a functional area may not be best for the overall organization.

D. best for one functional area will never be best for all functional areas.
C. best for a functional area may not be best for the overall organization.
The four key attributes of strategic management include the idea that strategy must


A. be directed toward overall organizational goals and objectives.

B. be focused only on long-term objectives.

C. be focused on only one specific area of an organization.

D. focus only on competitor strengths.
A. be directed toward overall organizational goals and objectives.
The four key attributes of strategic management include all of the following except


A. including multiple stakeholder interests in decision making.

B. incorporating both short-term and long-term perspectives.

C. recognizing the trade-offs between effectiveness and efficiency.

D. emphasis on the attainment of short-term objectives.
D. emphasis on the attainment of short-term objectives.
Effectiveness is often defined as


A. doing things right.

B. stakeholder satisfaction.

C. doing the right thing.

D. productivity enhancement.
C. doing the right thing.
In choosing to focus on stakeholders, which of the following will not lead to success for a manager?


A. shareholders and employees

B. employees and suppliers

C. customers and the community at large

D. customers only
D. customers only
In strategic management, both the short-term and long-term perspectives need to be considered because


A. shareholder value is only measured by short-term returns.

B. shareholders only care about long-term returns.

C. long-term vision precludes the analysis of present operating needs.

D. the creative tension between the two forces managers to develop more successful strategy.
D. the creative tension between the two forces managers to develop more successful strategy.
Strategic management involves the recognition of trade-offs between effectiveness and


A. cost.

B. value.

C. return on investment.

D. efficiency.
D. efficiency.
All of the following are ambidextrous behaviors except


A. taking initiative and being alert to opportunities beyond the job description.

B. being cooperative and seeking opportunities to combine personal efforts with that of others.

C. intensely focusing on the responsibilities of one individual and maximizing the output of the department in the organization in which that individual works.

D. being brokers, always looking to build internal linkages.
C. intensely focusing on the responsibilities of one individual and maximizing the output of the department in the organization in which that individual works.
Ambidextrous behaviors in individuals illustrate how a dual capacity for _______ can be woven into the fabric of an organization at the individual level.


A. alignment and adaptability

B. alignment and transparency

C. alignment and internal linkages

D. alignment and efficiency
D. alignment and efficiency
According to Henry Mintzberg, the final realized strategy of a firm is


A. a combination of deliberate and emergent strategies.

B. a combination of deliberate and differentiation strategies.

C. not deliberate.

D. a result of unrealized intended strategy.
A. a combination of deliberate and emergent strategie
__________ may be considered the advance work that must be done in order to effectively formulate and implement strategies.


A. Goal setting

B. Corporate entrepreneurship

C. Strategy analysis

D. Organizational design
C. Strategy analysis
Strategy analysis is the starting point of the strategic management process and consists of the


A. analysis only of the vision, mission, and objectives of the firm.

B. analysis of the relevant internal and external environmental factors only.

C. analysis of relevant competitors only.

D. matching of vision, mission, and objectives with the relevant internal and external environmental factors.
D. matching of vision, mission, and objectives with the relevant internal and external environmental factors.
Strategy formulation at the business level addresses best how to compete in a given business:


A. to attain competitive advantage

B. to reduce costs

C. to decrease buyer power

D. to thwart entry of new rivals
A. to attain competitive advantage
Corporate level strategy focuses on what businesses to compete in and


A. how business can be managed to achieve synergy.

B. how business can be managed to reduce synergy.

C. how the firm can work as a stand-alone entity.

D. how the firm can create more value by operating alone.
A. how business can be managed to achieve synergy.
Corporate-level strategy looks at how to manage the ______ of its businesses to create synergies.


A. portfolio

B. stock prices

C. competitors

D. market pricing
A. portfolio
Entering foreign markets requires firms to ascertain foremost how they will attain


A. market share.

B. low costs.

C. competitive advantage.

D. low returns on investment.
C. competitive advantage.
New value creation is a major engine for economic growth and is the main focus of _______________ strategy.


A. portfolio

B. corporate-level

C. business-level

D. entrepreneurial
D. entrepreneurial
Two types of strategic control that firms must exercise for good strategy implementation are


A. informational and confrontational.

B. confrontational and behavioral.

C. behavioral and financial.

D. informational and behavioral.
D. informational and behavioral.
Effective organizational design means that firms must have ________ that are consistent with their strategy.


A. designs and plans

B. organizational structures and designs

C. adopters and designs

D. adopters and plans
B. organizational structures and designs
Learning organizations permit the entire organization to benefit from ____________ talents.


A. internal and external

B. individual and collective

C. internal and collective

D. external and individual
B. individual and collective
Effective leaders set a direction and develop an organization so that it is committed to excellence and ___________ behavior.


A. performant

B. strategic

C. ethical

D. positive
C. ethical
Strategies should be formulated that enhance foremost the ____________ capacity of a firm.


A. innovative

B. learning

C. implementation

D. business-level
A. innovative
The three participants in corporate governance are the shareholders,


A. board of directors, and employees.

B. labor unions, and employees.

C. board of directors, and management.

D. banks and lending institutions, and management.
C. board of directors, and management
While working to prioritize and fulfill their responsibilities, members of the board of directors of an organization should


A. represent their own interests.

B. represent the interests of the shareholders.

C. direct all actions of the CEO.

D. emphasize the importance of short-term goals.
B. represent the interests of the shareholders
Members of boards of directors are


A. appointed by the Securities and Exchange Commission.

B. elected by the shareholders as their representatives.

C. elected by the public.

D. only allowed to serve one term of four years.
B. elected by the shareholders as their representatives
An organization is responsible to many different entities. In order to meet the demands of these groups, organizations must participate in stakeholder management. Stakeholder management means that


A. interests of the stockholders are not the only interests that matter.

B. stakeholders are second in importance to the stockholders.

C. stakeholders and managers inevitably work at cross-purposes.

D. all stakeholders receive financial rewards.
A. interests of the stockholders are not the only interests that matter.
Stakeholders are


A. a new way to describe stockholders.

B. individuals, groups, and organizations who have a stake in the success of the organization.

C. creditors who hold a lien on the assets of the organization.

D. attorneys and their clients who sue the organization.
B. individuals, groups, and organizations who have a stake in the success of the organization.
Procter and Gamble has perfected a technique for compacting cleaning powder into a liquid concentration. Consumers, retailers, shipping and wholesalers, and environmentalists all have benefited from the resulting change in consumer shopping habits and the revolution in industry supply-chain economics. According to the text, this is an example of


A. zero-sum relationship among stakeholders.

B. stakeholder symbiosis.

C. rewarding stakeholders.

D. emphasizing financial returns.
B. stakeholder symbiosis
There are several perspectives of competition. One perspective is zero-sum thinking. Zero-sum thinking means that


A. all parts of the organization gain at no loss.

B. in order for someone to gain others must experience no gain or benefit.

C. one can only gain at the expense of someone else.

D. everyone in the organization shares gains and losses equally.
C. one can only gain at the expense of someone else.
Managers should do more than focus on short-term financial performance. One concept that helps managers do this is stakeholder symbiosis. This means that


A. stakeholders are dependent on each other for their success.

B. stakeholders look out for their individual interests.

C. one can only gain at the expense of someone else.

D. all stakeholders want to maximize shareholder returns.
A. stakeholders are dependent on each other for their success.
Employee stakeholders are concerned with


A. taxes, warranties, and regulations.

B. wages, benefits, and job security.

C. good citizenship behavior.

D. dividends.
B. wages, benefits, and job security.
Stockholders as a stakeholder group are interested primarily by


A. payment of interest and repayment of principal.

B. value and warranties.

C. dividends and capital appreciation.

D. taxes and compliance with regulations.
C. dividends and capital appreciation.
The Sustainable Apparel Coalition accounts for more than one-third of the global


A. apparel and washing product industry.

B. consumer product industry.

C. refinery industry.

D. apparel and footwear industry.
D. apparel and footwear industry
Wall Street executives have received excessive bonus pay in the past. This concerns which of the following stakeholder groups most directly?


A. government

B. suppliers

C. creditors

D. stockholders
D. stockholders
Supplier stakeholders are concerned with


A. assurance of a continued relationship with the firm.

B. employee benefits.

C. safe working conditions.

D. capital appreciation.
A. assurance of a continued relationship with the firm
Community stakeholders are concerned primarily with


A. product warranties.

B. corporate citizenship behavior.

C. capital appreciation.

D. repayment of principal.
B. corporate citizenship behavior.
Firms must be aware of goals other than short-term profit maximization. One area of concern should be social responsibility, which is the


A. expectation that business will strive to improve the overall welfare of society.

B. idea that organizations are solely responsible to local citizens.

C. fact that court costs could impact the financial bottom line.

D. idea that businesses are responsible for maintaining a healthy social climate for their employees.
A. expectation that business will strive to improve the overall welfare of society.
According to the text, the triple bottom line approach to corporate accounting includes which three components?


A. financial, environmental, and customer

B. financial, organizational, and customer

C. financial, environmental, and social

D. financial, organizational, and psychological
C. financial, environmental, and social
Demands for greater corporate responsibility have accelerated today. They focus on issues such as


A. labor standards and environmental sustainability.

B. taxation.

C. product benefits.

D. service benefits.
A. labor standards and environmental sustainabilit
A key stakeholder group that is particularly susceptible to corporate social responsibility (CSR) initiatives is


A. suppliers.

B. rivals.

C. government agencies.

D. consumers.
D. consumers
According to the Corporate Citizenship poll conducted by Cone Communications, most Americans say they would be likely to switch brands to one associated with a good cause, if there are similarities between


A. price and availability.

B. availability and quality.

C. price and quality.

D. price and durability.
C. price and quality
According to a CEO survey by Accenture, __________________ are not mutually exclusive corporate goals.


A. quality and profitability

B. sustainability and profitability

C. ROI and quality

D. availability and ROI
B. sustainability and profitability
The Clorox Green Works line of plant-based cleaning materials captured 42 percent of the natural cleaning products market in its first year. This is an example of the benefit of


A. sustainability efforts.

B. cost reduction efforts.

C. marketing programs.

D. process management.
A. sustainability efforts.
Northrup Grumman saved $2 million in energy costs at a single facility by installing reflective roofs and fluorescent lighting, replacing old equipment, and making minor temperature and humidity-level adjustments. This is an example of the benefit of


A. increasing revenue efforts.

B. marketing programs.

C. sustainability efforts.

D. process management.
C. sustainability efforts.
The Fairmont Royal York in Toronto invested $25,000 in an energy conservation program to replace leaky steam traps and fix leaks, which resulted in an annual savings of over $200,000. This is an example of a sustainability effort to


A. increase innovation.

B. decrease revenue.

C. lower costs.

D. increase customers.
C. lower costs.
The ROI on sustainability efforts can be difficult to quantify because


A. an excess of necessary data for accurate calculation is readily available.

B. benefits from such projects are tangible.

C. the payback period is on a different time frame.

D. the payback period is on the same time frame.
C. the payback period is on a different time frame.
Sustainability programs often find their success beyond company boundaries, thus ______ systems and _____ metrics cannot capture all of the relevant numbers.


A. external; bio

B. internal; process

C. external; external

D. internal; internal
B. internal; process
Traditional financial models are built around relatively easy-to-measure, monetized results; whereas, the benefits of sustainability projects involve


A. clear tangibles.

B. clear intangibles.

C. fuzzy tangibles.

D. fuzzy intangibles.
D. fuzzy intangibles.
The case for sustainability projects needs to be made on the basis of a more holistic and comprehensive understanding of all the _____________ benefits.


A. measurable and unmeasurable

B. financial and physical

C. tangible and intangible

D. measurable and physical
C. tangible and intangible
Some benefits of sustainability projects include


A. reducing risks.

B. lagging behind regulations.

C. displeasing communities.

D. ignoring employee morale.
A. reducing risks
Many organizations have a large number of functional areas with very diverse and sometimes competing interests. Such organizations will be most effective if


A. each functional area focuses on achieving their own goals.

B. goals are defined at the bottom and implemented at the top.

C. functional areas work together to attain overall goals.

D. management and employees have separate goals.
C. functional areas work together to attain overall goals.
Strategy formulation and implementation is a challenging ongoing process. To be effective, it should not involve


A. the CEO and the board of directors.

B. the board of directors, CEO, and CFO.

C. rivals.

D. line and staff managers.
C. rivals.
The text argues that a strategic perspective in an organization should be emphasized


A. at the top of the organization.

B. at the middle of the organization.

C. throughout the organization.

D. from the bottom up.
C. throughout the organization.
Peter Senge, of MIT, recognized three types of leaders. __________ are individuals that, although having little positional power and formal authority, generate their power through the conviction and clarity of their ideas.


A. Local line leaders

B. Executive leaders

C. Internal networkers

D. Shop floor leaders
C. Internal networkers
Peter Senge, of MIT, recognized three types of leaders. These individuals champion and guide ideas, create a learning infrastructure, and establish a domain for taking action.


A. local line leaders

B. executive leaders

C. internal networkers

D. shop floor leaders
B. executive leaders
Leadership is a necessary (but not sufficient) condition for organizational success. Leaders should emerge at which level(s) of an organization?


A. only at the top

B. in the middle

C. throughout the organization

D. only during times of change
C. throughout the organization
Local line leaders have __________ responsibility.


A. local

B. executive

C. profit-and-loss

D. no
C. profit-and-loss
Internal networks generate their power through the _____________ of their ideas.


A. validity and correctness

B. conviction and clarity

C. validation and recognition

D. approval and awareness
C. validation and recognition
Executive leaders champion and guide ideas by


A. reinforcing ideas that did not work.

B. creating a learning infrastructure.

C. validating their formal authority.

D. increasing their personal power.
B. creating a learning infrastructure.
Richard Branson, founder of the Virgin Group, empowers his companies through a(n) _______ structure in which anyone can bring forth new ideas.


A. formal

B. hierarchal

C. multi-level

D. informal
D. informal
Transformational change involves


A. extensive communication.

B. little training.

C. no employee development.

D. few incentives.
A. extensive communication.
Whirlpool's transformation under corporate vice president Nancy Snyder included financial investments in


A. shareholder dividends.

B. capital spending.

C. community development.

D. paying down borrowed debt.
B. capital spending
Methods by which successful executives show their interest in learning what others are thinking include


A. holding town hall meetings and consulting employees on what they would do if in charge.

B. holding town hall meetings and consulting bankers on what they would do if in charge.

C. holding retreats and consulting rivals on what they would do if in charge.

D. consulting rivals and consulting investment bankers.
A. holding town hall meetings and consulting employees on what they would do if in charge.
Tim Brown, CEO of IDEO, believes that the ________ of a person should not dictate the level of influence their ideas should be accorded.


A. age

B. seniority

C. position

D. education
C. position
The hierarchy of organizational goals is in this order (least specific to most specific):


A. vision statements, strategic objectives, mission statements

B. mission statements, strategic objectives, vision statements

C. vision statements, mission statements, strategic objectives

D. mission statements, vision statements, strategic objectives
C. vision statements, mission statements, strategic objectives
Vision statements are used to create a better understanding of the overall purpose and direction of the organization. Vision statements


A. are very specific.

B. provide specific objectives.

C. set organizational structure.

D. evoke powerful and compelling mental images.
D. evoke powerful and compelling mental images
Effective vision statements include


A. all strategic directions of the organization.

B. a brief statement of the company's direction.

C. strategic posturing and future objectives.

D. financial objectives and projected figures.
B. a brief statement of the company's direction.
WellPoint Health Network states: WellPoint will redefine our industry: through a new generation of consumer-friendly products that put individuals back in control of their future. This is an example of a


A. strategic objective.

B. vision statement.

C. vague statement of direction.

D. line manager's individual goal.
B. vision statement
Although such visions cannot be accurately measured by a specific indicator of how well they are being achieved, they do provide a fundamental statement of the __________ of an organization.


A. values, aspirations, and goals

B. expected returns and limitations

C. outstanding debt

D. credibility
A. values, aspirations, and goals
In contrast to the vision of an organization, its mission should


A. be shorter in length.

B. encompass both the purpose of the company as well as the basis of competition.

C. encompass all the major rules and regulations of the corporate work force.

D. be less detailed.
B. encompass both the purpose of the company as well as the basis of competition.
The vision and mission statements of a company set the overall direction of the organization. Strategic objectives serve what role?


A. operationalize the mission statement

B. modify the mission statement

C. are a shorter version of the mission statement

D. are only clarified by the board of directors
A. operationalize the mission statement
Successful organizations are effective in motivating people. Employees work best when


A. they are asked to do their best.

B. work requirements are vague and unclear.

C. they are striving toward specific goals.

D. they are guided by an abstract mission statement.
C. they are striving toward specific goals.
Fortune Brands states they will cut corporate overhead costs by $30 million a year. This is an example of a


A. nonfinancial strategic objective.

B. financial strategic objective.

C. vision statement.

D. mission statement.
B. financial strategic objective
We want to be the top-ranked supplier to our customers. (PPG) This is an example of a


A. nonfinancial strategic objective.

B. financial strategic objective.

C. vision statement.

D. mission statement.
A. nonfinancial strategic objective
In large organizations, conflicts can arise between functional areas. In order to resolve these conflicts, strategic objectives


A. put financial objectives above human considerations.

B. align departments toward departmental goals.

C. help resolve conflicts through their common purpose.

D. cause debate and increase conflict.
C. help resolve conflicts through their common purpose.
Which of the following is not an example of a financial strategic objective?


A. Increase sales growth 6 percent to 8 percent and accelerate core net earnings growth from 13 percent to15 percent per share in each of the next 5 years. (Procter & Gamble)

B. Reduce volatile air emissions 15 percent by 2015 from 2010 base year, indexed to net sales. (3M)

C. Generate Internet-related revenue of $1.5 billion. (AutoNation)

D. Cut corporate overhead costs by $30 million per year. (Fortune Brands)
B. Reduce volatile air emissions 15 percent by 2015 from 2010 base year, indexed to net sales. (3M)
In large organizations, the potential exists for different parts of an organization to pursue its own goals rather than the overall company goals. Proper _______ can help to resolve conflicts when they arise.


A. mission statements

B. vision statements

C. organization structure

D. objectives
D. objectives
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