Chapter Final Quizzes Flashcards
A term used in organizations whose operating units don’t meet all the SBU classification criteria are sometimes referred to as
Strategic growth units
A group of independent grocery stores merging into one company is an example of a strategic alliance
False
The Cally Company bought a company in Mexico to distribute its products in South American markets. The new company is called CalMex. This is an example of an
Acquisition
A multi-line of business organization is a company that:
operates in several industries
Diversification may lessen the impact of an industry downturn
True
In the Boston Consulting Group matrix, an SBU with high relative market share in a low growth industry would be classified as a
Cash Cow
Mergers/acquisitions involve short term commitments of companies to work together on a project
False
In the BCG matrix, which of the following is not a classification of an SBU?
cash cows
stars
problem children
stray cats
stray cats
Introducing new products to new markets is referred to as penetration strategy
False
In diversification strategies, management has the least knowledge of products and markets and may have limited knowledge of the financial resources needed to be successful
True
A manufacturer of men’s clothing is opening a chair of retail men’s clothing stores. This is an example of
vertical integration strategy
Diversification is favorable strategy when the current industry is experiencing significant growth
False
A retrentchment strategy and a divestment strategy are both interchangeable terms
False
In the GE Nine Cell Matrix, industry attractiveness is determined by which of the following
market size and growth
In a joint venture, organizations seek to combing strengths or overcome weaknesses of their individual struggles
true
Which of the following are outcomes of classifying each SBU into one of the 9 cells?
each SBU’s characteristics and strategic implications
Once an organization has defined its SBUs, strategic plans:
should be developed for each separate SBU
A stronger management team is needed for product development than diversification
False
In determining the strategy for each SBU, a firm must consider
synergies among SBUs
The strategic plan includes several __________ financial statements to help the entrepeneur or manager to estimate sales and profits
pro-forma
The statement of cash flow is arguably the most important financial statement for a business
True
The cash flow projection is an important tool as it indicates when the business expenses are too high or when you might need a short-term loan to deal with a cash shortage
True
Among the many financial ratios used in financial analysis, the three main categories are balance sheet ratios, profitability ratios, and
asset management ratios
Companies that choose a differentiation strategy will enhance their product with unique features or provide additional services that allow the company to charge a higher price for their product. an example of this would be
automaker Tesla offering consumers premium quality electric vehicles
For a single line of business, the corporate strategy and business level strategy are the same
True
has long been part of 3M corporate strategy and has enabled the company to develop more than 55,000 products
Strong R&D Division
Value Chain Analysis is a process where the company analyzes all the company from purchase of raw materials to manufacturing and marketing their products
True
In business strategy, a market follower enters the market with a “copycat” product and with less marketing effort. Some refer to this as __________ and liken the process to a lion on the plains of Africa waiting for a gazelle before striking
market hunting
The breakeven point in units is calculated as Breakeven point (units)= total fixed costs/(price-variable costs per unit)
True
An example of a corporation operating in a single industry would be Home Depot
True
There is a potential danger to operating in a single industry because if there should be an economic downturn
True
Three of the most important financial statements include the income statement, balance sheet, and
statement of cash flow
Companies or organizations with weak cultures often exhibit low employee turnover
False
Each of the following is true regarding the income statement except
the income statement replaces the statement of cash flow
Benchmarking measures value chain activities across an industry in order to determine best practices
true
__________ the number of units that the firm must sell so total revenue equals total costs
break-even point
Strategic planning and management has little to do with human resources
False
Financial analysis measures past and projected future financial performance
True
Research has found that implementation was improved by
simplifying measures and measuring the right things
the culture of some visionary companies is like a cult-like culture around core ideologies and individuals who are charismatic individuals
False
A circular organizational structure can be used to create organzational democracy
True
Internal organizations often use hybrid forms of an organizational structure that may incorporate several types of structures
True
Which of the following is an advantage of the divisional structure?
faster adaptation to changes in regional environmental changes
Which of the following is a list of factors that affect resistance to change and innovation?
players, funding, policy, technology, customers, and accountability
A matrix organization doesn’t work well in companies that need to manage a lot of projects
False
An SBU organizational structure can lead to a proliferation of staff and duplication of activities
True
Through the implementation process people are assigned tasks, given authority, and the resources need to create the activities to bring the plans to “life”
True
One of the most important considerations in implementing plans is to foster ownership of the process
true
Which of the following is an advantage of the matrix form of organization?
training opportunities for strategic managers
structure refers to the formal arrangement of activities in an organization
true
Action plans help assign responsibility for specific tasks to specific individuals
true
In a divisional organizational structure, managers are given authority and responsibility to formulate implementation but not strategies for their division
False
Clan members believe it is in their best interest to operate as a lone wolf to enhance creativity in the organization
False
Subordinates that have dual assignments to the business/product line/project managers and their functional managers, fall under this structural design:
matrix structure
Improvements are better ways of satisfying customers
True
Individuals who are not willing to try news tasks or ways of doing tasks are
change resistors
