CHAPTER 8

Question 1

A situation in which all parties agree to one alternative.

Answer 1

consensus

Question 2

Pro forma balance sheets and income statements that forecast the effect that each alternative strategy will likely have on return on investment.

Answer 2

corporate scenario

Question 3

An individual or a group assigned to identify the potential pitfalls and problems of a proposal.

Answer 3

devil’s advocate

Question 4

A decision-making technique that requires that two proposals using different assumptions be generated for consideration.

Answer 4

dialectical inquiry

Question 5

A functional strategy to make the best use of corporate monetary assets

Answer 5

financial strategy

Question 6

An approach taken by a functional area to achieve corporate and business unit objectives and strategies by maximizing resource productivity.

Answer 6

functional strategy

Question 7

A functional strategy that makes the best use of corporate human assets.

Answer 7

Human resource management (HRM)
strategy

Question 8

A functional strategy that uses information systems technology to provide competitive advantage

Answer 8

information technology strategy

Question 9

An acquisition in which a company is acquired in a transaction financed largely by debt—usually obtained from a third party, such as an insurance company or an investment banker.

Answer 9

Leveraged buy-out

Question 10

A functional strategy that deals with the flow of products into and out of the manufacturing process

Answer 10

logistics strategy

Question 11

A marketing functional strategy in which a company or business unit captures a larger share of an existing market for current products through market penetration or develops new markets for current products.

Answer 11

market development

Question 12

A functional strategy that deals with pricing, selling, and distributing a product.

Answer 12

marketing strategy

Question 13

The outsourcing of an activity or function to a provider in another country.

Answer 13

offshoring

Question 14

A functional strategy that determines how and where a product or service is to be manufactured, the level of vertical integration in the production process, and the deployment of physical resources.

Answer 14

operations strategy

Question 15

A process in which resources are purchased from others through long-term contracts instead of being made within the company.

Answer 15

outsourcing

Question 16

A strategy to influence a corporation’s stakeholders.

Answer 16

political strategy

Question 17

A marketing strategy in which a company or unit develops new products for existing markets or develops new products for new markets

Answer 17

product development

Question 18

A functional strategy that deals with obtaining the raw materials, parts, and supplies needed to perform the operations functions.

Answer 18

purchasing strategy

Question 19

A functional strategy that deals with product and process innovation.

Answer 19

R&D strategy

Question 20

An approach to new project investment when the future is highly uncertain.

Answer 20

Real options approach

Question 21

A measure of the probability that one strategy will be effective, the amount of assets the corporation must allocate to that strategy, and the length of time the assets will be unavailable.

Answer 21

risk

Question 22

A chart that categorizes stakeholders in terms of their interest in a corporation’s activities and their relative power to influence the corporation’s activities.

Answer 22

Stakeholder Priority Matrix

Question 23

The evaluation of strategies and selection of the best alternative

Answer 23

strategic choice

Question 24

A company that imitates the products of competitors.

Answer 24

technological follower

Question 25

A company that pioneers an innovation

Answer 25

technological leader

Question 26

A theory that proposes that organizations adapt to a changing environment and have the opportunity and power to reshape their environment.

Answer 26

Strategic choice perspective