Question

Chapter 1

1) The decision to expand or diversify operations is a strategy-formulation issue.

1. A) True
2. B) False

2) The terms strategic management and strategic planning are synonymous in this text.

1. A) True
2. B) False

3) Anything the firm does well especially when compared to rival firms could be considered a competitive advantage.

1. A) True
2. B) False

4) Strengths and weaknesses are determined relative to competitors.

1. A) True
2. B) False

5) Objectives should be specific, measurable, achievable, reasonable, consistent, time-bound, and clear.

1. A) True
2. B) False

6) The goal of strategic management is to

1. A) achieve competitive advantage.
2. B) maintain competitive advantage.
3. C) achieve and maintain competitive advantage.
4. D) eliminate competitive advantage.
5. E) eliminate and abolish competitive advantage.

7) The strategic-management process

1. A) occurs once a year.
2. B) is a semiannual process.
3. C) is a continuous process.
4. D) applies mostly to companies with sales greater than $100 million.
5. E) applies mostly to small businesses.

8) An important activity in ________ is taking corrective action.

1. A) strategy evaluation
2. B) strategy implementation
3. C) strategy formulation
4. D) strategy leadership
5. E) all of the above

9) In which phase of strategic management are annual objectives especially important?

1. A) Reduction
2. B) Formulation
3. C) Implementation
4. D) Evaluation
5. E) Policy

10) In which phase of strategic management are long-term objectives especially important?

1. A) Formulation
2. B) Control
3. C) Evaluation
4. D) Implementation
5. E) Management

Chapter 2

1) The purpose of a mission statement is to declare all of these EXCEPT

1. A) a reason for being.
2. B) an annual financial plan.
3. C) a statement of purpose.
4. D) whom an organization wants to serve.

2) Carefully developed written mission statements provide a basis for organizing work, departments, activities, and segments around a common purpose.

1. A) True
2. B) False

3) A mission statement is an enduring statement of purpose that distinguishes one organization from other similar enterprises.

1. A) True
2. B) False

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

1. A) True
2. B) False

5) A small nonprofit organization would probably develop a vision statement but not a mission statement.

1. A) True
2. B) False

6) The foundation for development of a comprehensive mission statement is provided by a clear vision.

1. A) True
2. B) False

7) A good mission statement has

1. A) an employee orientation.
2. B) a customer orientation.
3. C) a shareholder orientation.
4. D) an environmental orientation.
5. E) a profit orientation

8) Which statement is TRUE?

1. A) Companies must choose between having a mission statement or a vision statement.
2. B) A company can’t have a mission statement unless it has a vision statement.
3. C) A vision statement cannot be established until a company has developed its mission statement.
4. D) The vision statement should be established before the mission statement.
5. E) Companies are required by law to have both mission and vision statements.

9) Which group would be classified as stakeholders?

1. A) Governments
2. B) Creditors
3. C) Suppliers
4. D) Employees
5. E) All of the above

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

1. A) short-term objective
2. B) implementation plan
3. C) audit policy
4. D) mission statement
5. E) evaluation strategy