competitive mcqs

Question 1

The concept that proposes private corporations have responsibilities to society that extend 
beyond making a profit is known as
A) flexible responsibility.
B) social responsibility.
C) social flexibility.
D) managerial responsibility.

Answer 1

B) social responsibility.

Question 2

Which one of the following is NOT one of the arguments against social responsibility as used by
economist Milton Friedman?
A) Spending money for social responsibility is spending the stockholder’s money for a general
social interest.
B) Businesses can actually do very little in terms of social responsibility.
C) Spending money on social responsibility is acting from motives other than economic and
may, in the long-run, cause harm to the very society the firm is trying to help.
D) There is one and only one social responsibility of business – to use its resources and engage
in activities designed to increase its profits so long as it stays within the rules of the game.

Answer 2

B) Businesses can actually do very little in terms of social responsibility.

Question 3

Who said that the social responsibility of business is a “fundamentally subversive doctrine” and
that the one social responsibility of business is “to use its resources and engage in activities
designed to increase its profits so long as it stays with the rules of the game…”?
A) Adam Smith
B) Edward Freeman
C) Archie Carroll
D) William C. Norris
E) Milton Friedman

Answer 3

E) Milton Friedman

Question 4

Economist Milton Friedman has argued that a business’s only responsibility is to
A) maximize profits and stay within the rules of the game.
B) sustain its market share.
C) promote the welfare of society.
D) satisfy its employees.

Answer 4

A) maximize profits and stay within the rules of the game.

Question 5

According to Carroll, the responsibility that management of a business organization has to
produce goods and services of value to society so that the firm may repay its creditors and
stockholders is called
A) legal responsibilities.
B) ethical responsibilities.
C) financial responsibilities.
D) economic responsibilities.

Answer 5

D) economic responsibilities.

Question 6

According to Carroll, the responsibilities defined by government in laws for management to obey
are
A) legal responsibilities.
B) ethical responsibilities.
C) financial responsibilities.
D) economic responsibilities

Answer 6

A) legal responsibilities.

Question 7

The emphasis of strategic management is on
A) monitoring and evaluating external opportunities and threats in light of a corporation’s
strengths and weaknesses.
B) first line managers.
C) the short-run performance of the corporation.
D) an examination of the organization’s internal environment.

Answer 7

A) monitoring and evaluating external opportunities and threats in light of a corporation’s
strengths and weaknesses.

Question 8

The time horizon involved with regard to basic financial planning is usually
A) one year.
B) one quarter.
C) more than five years.
D) less than one month.

Answer 8

A) one year.

Question 9

difference between basic financial planning and forecast-based planning is
A) the time horizon is shorter in forecast-based planning.
B) forecast-based planning incorporates internal and external information.
C) basic financial planning utilizes consultants with sophisticated techniques.
D) basic financial planning utilizes scenarios and contingency strategies.

Answer 9

B) forecast-based planning incorporates internal and external information.

Question 10

In the final phase of strategic management, strategic information is available to
A) people throughout the organization.
B) the top management responsible for decision making.
C) middle management.
D) operational personnel.

Answer 10

A) people throughout the organization.

Question 11

When an organization is evaluating its strategic position, which is NOT one of the strategic
questions that an organization must ask itself?
A) Where is the organization now?
B) How can functional and operational areas be improved?
C) If no changes are made, where will the organization be in one year?
D) If the evaluation is negative, what specific actions should management take?

Answer 11

B) How can functional and operational areas be improved?

Question 12

Research of the planning practices of companies in the oil industry concludes that the real value
of modern strategic planning is more
A) in the planning.
B) in the strategic thinking and organizational learning.
C) in the resulting written strategic plan.
D) in the formality of the process.

Answer 12

B) in the strategic thinking and organizational learning.

Question 13

The regional trade association composed of Argentina, Brazil, Uruguay, and Paraguay is called
A) EU.
B) ASEAN.
C) NAFTA. 
D) Mercosur.

Answer 13

D) Mercosur.

Question 14

Members of the European Union (EU) include all of the following EXCEPT
A) Ireland.
B) Malaysia.
C) Belgium.
D) France.

Answer 14

B) Malaysia.

Question 15

The integrated internationalization of markets and corporations is called
A) normalization.
B) economic integration.
C) globalization.
D) nationalization.

Answer 15

C) globalization.

Question 16

All of the following reflect categories of organizational risk as a result of climate change
EXCEPT
A) regulatory risk.
B) supply chain risk.
C) sustainability risk.
D) reputational risk.

Answer 16

C) sustainability risk.

Question 17

The currency used to integrate the monetary systems of the European Union (EU) is called the
A) peso.
B) dollar.
C) euro.
D) franc.

Answer 17

C) euro.

Question 18

Which theory proposes that once an organization is successfully established in a particular
environmental niche, it is unable to adapt to changing conditions?
A) population ecology
B) institution
C) citizenship
D) strategic choice

Answer 18

A) population ecology

Question 19

The ability of an organization to reshape its environment is described by
A) population ecology theory.
B) theory institution.
C) the strategic choice perspective.
D) organizational learning theory.

Answer 19

C) the strategic choice perspective.

Question 20

According to Alfred Chandler
A) high-tech industries are defined by “paths of learning.”
B) companies spring from an individual entrepreneur’s knowledge, which then evolves into
organizational knowledge.
C) once a corporation has built its learning base to the point where it has become a core company
in its industry, entrepreneurial start-ups are rarely able to successfully enter.
D) organizational knowledge can become a competitive advantage.
E) All of the above

Answer 20

E) All of the above

Question 21

The ability of a corporation to shift from one dominant strategy to another is called
A) strategy implementation.
B) chaos formulation.
C) contingency management.
D) strategic flexibility.

Answer 21

D) strategic flexibility.

Question 22

The task environment
A) includes those elements or groups within an organization’s industry.
B) encompasses the physical working areas of the organization.
C) is an accounting of the many jobs within an organization.
D) is an advisory committee to top-management.

Answer 22

A) includes those elements or groups within an organization’s industry.

Question 23

Which one of the following is an example of a narrow scope in a mission?
A) transportation (vs railroads)
B) computers (vs office equipment)
C) health care (vs hospitals)
D) real estate (vs apartments)

Answer 23

B) computers (vs office equipment)

Question 24

A goal differs from an objective because it
A) is open-ended.
B) is quantified.
C) specifies measurable results.
D) is clearly specified.

Answer 24

A) is open-ended

Question 25

An organization skilled at creating, acquiring, and transferring knowledge, and at modifying its
behavior to reflect new knowledge and insights is a(n)
A) learning organization.
B) strategically managed corporation.
C) innovative organization.
D) hypercompetitive competitor

Answer 25

A) learning organization.

Question 26

Which of the following is an example of an objective?
A) Diversify product line to appeal to more people.
B) Increase sales by 10% over last year.
C) Pay highest salaries to keep high quality employees.
D) Develop and sell quality appliances worldwide.

Answer 26

B) Increase sales by 10% over last year.

Question 27

Which of the following is an example of a corporate strategy?
A) Diversify product line to appeal to more people.
B) Increase sales by 10% over last year.
C) Pay highest salaries to keep high quality employees.
D) Develop and sell quality appliances worldwide.

Answer 27

A) Diversify product line to appeal to more people.

Question 28

The type of strategy which describes a company’s overall direction in terms of its general attitude
toward growth and the management of its various businesses and product lines is
A) functional.
B) operational.
C) business.
D) product.
E) corporate.

Answer 28

E) corporate.

Question 29

The type of strategy which achieves corporate and business unit objectives and strategies by
maximizing resource productivity is
A) functional.
B) operational.
C) business.
D) product.

Answer 29

A) functional.

Question 30

All of the following reflect activities of a learning organization EXCEPT
A) experimenting with new approaches.
B) learning from its own experiences and past history.
C) solving problems systematically.
D) alienating competitors in the industry.

Answer 30

D) alienating competitors in the industry.

Question 31

A large, multidivisional business has three levels in its hierarchy of strategy:
A) Corporate – Business – Functional.
B) Environmental – Corporate – Functional.
C) Environmental – Enterprise – Corporate.
D) Business – Divisional – Functional.

Answer 31

A) Corporate – Business – Functional.

Question 32

Which of the following is an example of a policy?
A) Diversify product line to appeal to more people.
B) Increase sales by 10% over last year.
C) Pay highest salaries to keep high quality employees.
D) Develop and sell quality appliances worldwide

Answer 32

C) Pay highest salaries to keep high quality employees.

Question 33

A program is
A) a detailed cost statement in terms of dollars.
B) A system of sequential steps.
C) A statement of the activities needed to accomplish a single-use plan.

Answer 33

C) A statement of the activities needed to accomplish a single-use plan.

Question 34

A set of sequential steps or techniques that describe in detail how a particular task or job is to be
done is referred to as
A) a standard operating procedure.
B) a systems operating procedure.
C) a standard operating program.
D) a standard outside procedure.

Answer 34

A) a standard operating procedure.

Question 35

The monitoring, evaluating, and disseminating of information from the external and internal
environments to key people within the corporation is referred to as
A) environmental scanning.
B) external scanning.
C) internal scanning.
D) strategy formulation.

Answer 35

A) environmental scanning.

Question 36

The phenomenon that describes corporations as evolving through relatively long periods of
stability punctuated by relatively short bursts of fundamental change is known as
A) revolution.
B) equilibrium.
C) punctuated equilibrium.
D) logical incrementalism.

Answer 36

C) punctuated equilibrium.

Question 37

Which of the following is NOT a characteristic of strategic decisions as mentioned in the text?
A) directive
B) consequential
C) rare
D) continuous

Answer 37

D) continuous

Question 38

9- The S in S.W.O.T. stands for
A) strategies.
B) scanning.
C) strengths.
D) societal.

Answer 38

C) strengths.

Question 39

According to Henry Mintzberg, the three most typical approaches to strategic decision-making
are
A) entrepreneurial, adaptive, and planning.
B) entrepreneurial, logical incrementalism, and planning.
C) logical incrementalism, strategic planning, and systematic scanning.
D) environmental scanning, formulation, and implementation

Answer 39

A) entrepreneurial, adaptive, and planning.

Question 40

Board members who are not employed by the corporation, but handle the legal or insurance
needs of the firm and are thus not a true “outsider” are what kind of directors?
A) affiliated directors
B) family directors
C) retired directors
D) management directors

Answer 40

A) affiliated directors

Question 41

The variables structure, culture, and resources pertain to the
A) external environment.
B) internal environment.
C) sociocultural forces.
D) task environment.

Answer 41

B) internal environment.

Question 42

Amazon.com, founded by Jeff Bezos and reflecting his vision, is an example of which mode of
strategic decision-making?
A) adaptive
B) entrepreneurial
C) logical incrementalism
D) planning

Answer 42

B) entrepreneurial

Question 43

IBM under CEO Louis Gerstner and his strategic decision to invest in services in 1993, is an
example of which mode of strategic decision-making?
A) adaptive
B) entrepreneurial
C) logical incrementalism
D) planning

Answer 43

D) planning

Question 44

The mode of strategy formulation used when top management has a reasonably clear idea of the
corporation’s mission and objectives, but it chooses to develop a series of tentative or partial
strategies instead of developing full-blown strategies is called
A) planning mode.
B) logical incrementalism.
C) entrepreneurial mode.
D) adaptive mode.

Answer 44

B) logical incrementalism.

Question 45

The Strategic Management Model presents the following process of strategy formulation:
A) Objectives – Policies – Strategies – Mission.
B) Mission – Policies – Strategies – Objectives.
C) Policies – Mission – Strategies – Objectives.
D) Vision -Mission – Objectives – Strategies – Policies

Answer 45

D) Vision -Mission – Objectives – Strategies – Policies

Question 46

The concept that proposes private corporations have responsibilities to society that extend
beyond making a profit is known as
A) flexible responsibility.
B) social responsibility.
C) social flexibility.
D) managerial responsibility.

Answer 46

B) social responsibility.

Question 47

Which one of the following is NOT one of the arguments against social responsibility as used by
economist Milton Friedman?
A) Spending money for social responsibility is spending the stockholder’s money for a general
social interest.
B) Businesses can actually do very little in terms of social responsibility.
C) Spending money on social responsibility is acting from motives other than economic and
may, in the long-run, cause harm to the very society the firm is trying to help.
D) There is one and only one social responsibility of business – to use its resources and engage
in activities designed to increase its profits so long as it stays within the rules of the game.

Answer 47

B) Businesses can actually do very little in terms of social responsibility.

Question 48

The principle which proposes that punishment should be determined on a proportional basis to 
the "crime" is called
A) compensatory justice.
B) retributive justice.
C) relevant justice.
D) distributive justice.

Answer 48

B) retributive justice.

Question 49

The principle which argues that wrongs should be compensated in proportion to the offense
suffered is called
A) compensatory justice.
B) retributive justice.
C) relevant justice.
D) distributive justice.

Answer 49

A) compensatory justice.

Question 50

Issues in affirmative action such as reverse discrimination are examples of conflicts between
A) compensatory and punitive justice.
B) retributive and distributive justice.
C) distributive and compensatory justice.
D) retributive and compensatory justice.

Answer 50

C) distributive and compensatory justice.

Question 51

According to Cavanagh, using the ________ criterion, to determine if padding an expense
account is ethical or not one would ask if it optimizes the satisfactions of all stakeholders.
A) morality
B) utility
C) rights
D) justice

Answer 51

B) utility

Question 52

Using the Golden Rule and never treating another human being simply as a means but always as
an end are the categorical imperatives of
A) Archie Carroll.
B) L. Kohlberg.
C) Joseph Badaracco.
D) Immanuel Kant.

Answer 52

D) Immanuel Kant.

Question 53

Who said that the social responsibility of business is a “fundamentally subversive doctrine” and
that the one social responsibility of business is “to use its resources and engage in activities
designed to increase its profits so long as it stays with the rules of the game…”?
A) Adam Smith
B) Edward Freeman
C) Archie Carroll
D) William C. Norris
E) Milton Friedman

Answer 53

E) Milton Friedman

Question 54

Economist Milton Friedman has argued that a business’s only responsibility is to
A) maximize profits and stay within the rules of the game.
B) sustain its market share.
C) promote the welfare of society.
D) satisfy its employees.

Answer 54

A) maximize profits and stay within the rules of the game.

Question 55

According to Carroll, the responsibility that management of a business organization has to
produce goods and services of value to society so that the firm may repay its creditors and
stockholders is called
A) legal responsibilities.
B) ethical responsibilities.
C) financial responsibilities.
D) economic responsibilities.

Answer 55

D) economic responsibilities.

Question 56

According to Carroll, the responsibilities defined by government in laws for management to obey
are
A) legal responsibilities. B) ethical responsibilities.
C) financial responsibilities.
D) economic responsibilities.

Answer 56

A) legal responsibilities. B) ethical responsibilities.

Question 57

According to Carroll, the responsibility that management of a business organization assumes
which are purely voluntary obligations are
A) legal responsibilities.
B) ethical responsibilities.
C) financial responsibilities.
D) economic responsibilities.
E) discretionary responsibilities.

Answer 57

E) discretionary responsibilities.

Question 58

The term “social responsibility,” according to Carroll, can be viewed as a combination of an
A) organization’s ethical and discretionary responsibilities.
B) organization’s legal and ethical responsibilities.
C) organization’s economic and ethical responsibilities.
D) organization’s financial and economic responsibilities.
E) organization’s legal and discretionary responsibilities.

Answer 58

A) organization’s ethical and discretionary responsibilities.

Question 59

Carroll’s four responsibilities listed in order of priority are
A) legal, economic, ethical, and discretionary.
B) legal, ethical, discretionary, and economic.
C) economic, legal, ethical, and discretionary.
D) economic, ethical, discretionary, and legal.
E) ethical, economic, legal, and discretionary.

Answer 59

C) economic, legal, ethical, and discretionary.

Question 60

Society generally expects firms to work with employees and the company to plan for layoffs.
This is an example of which of Carroll’s responsibilities?
A) economic
B) legal
C) justice
D) ethical

Answer 60

D) ethical

Question 61

Providing day-care centers to employees is an example of which of Carroll's responsibilities?
A) economic
B) legal
C) justice
D) ethical
E) discretionary

Answer 61

E) discretionary

Question 62

Friedman’s position on social responsibility
A) proposes that a lack of social responsibility results in increased government regulations.
B) appears to be losing traction with business executives.
C) suggests that a lack of social responsibility reduces a firm’s efficiency.
D) explains why firms are using their socially responsibility actions for competitive advantage.

Answer 62

B) appears to be losing traction with business executives.

Question 63

As societal values evolve, it is likely that the \_\_\_\_\_\_\_\_ responsibilities of today may become the
\_\_\_\_\_\_\_\_ responsibilities to tomorrow.
A) economic; ethical.
B) legal; ethical.
C) discretionary; ethical.
D) discretionary; economic.

Answer 63

C) discretionary; ethical.

Question 64

Being socially responsibility
A) provides a company with a more positive overall reputation.
B) has opened doors in local communities.
C) has enhanced the company’s reputation with consumers.
D) has resulted in cost savings to firms.
E) all of the above.

Answer 64

E) all of the above.

Question 65

Which of the following is NOT one of the examples provided as an organizational benefit
received from being socially responsible?
A) They can attract outstanding employees who prefer working for a responsible firm.
B) They are more likely to be welcomed into a foreign country.
C) They are more likely to attract capital infusions from investors who view reputable companies
as desirable long-term investment.
D) They are guaranteed to maximize resource productivity and reduce the average
payback period of investment.

Answer 65

D) They are guaranteed to maximize resource productivity and reduce the average
payback period of investment.

Question 66

The relationship among the board of directors, top management, and shareholders is referred to
as
A) corporate synergy.
B) corporate management.
C) corporate governance.
D) corporate strategy.

Answer 66

C) corporate governance.

Question 67

According to a recent Harris Poll what percentage of U.S. adults believe that U.S. corporations
owe something to their workers and the communities in which they operate and that they should
sometimes sacrifice some profit for making things better for their workers and communities?
A) 95%
B) 5%
C) 50%
D) 75 %

Answer 67

A) 95%

Question 68

In order for a business to be sustainable, it must satisfy which of Carroll's responsibilities?
A) economic
B) legal
C) ethical
D) discretionary
E) all of the above

Answer 68

E) all of the above

Question 69

The Dow Jones Sustainability Index includes
A) environmental, economic, and quality sustainability.
B) industry, environmental, and economic sustainability.
C) environmental, economic, and social sustainability.
D) ethical, economic, and social sustainability.

Answer 69

C) environmental, economic, and social sustainability.

Question 70

The first step in stakeholder analysis is to
A) identify primary stakeholders.
B) monitor what all the stakeholders want.
C) identify the stakeholders with an indirect stake in the corporation.
D) estimate the effect on each stakeholder group from any particular strategic decision.

Answer 70

A) identify primary stakeholders.

Question 71

All of the following are considered primary stakeholders EXCEPT
A) customers.
B) governments.
C) employees.
D) shareholders.

Answer 71

B) governments.

Question 72

All of the following are considered secondary stakeholders EXCEPT
A) governments.
B) competitors.
C) suppliers.
D) trade associations.

Answer 72

C) suppliers.

Question 73

Board members who are not employed by the corporation, but handle the legal or insurance
needs of the firm and are thus not a true “outsider” are what kind of directors?
A) affiliated directors
B) family directors
C) retired directors
D) management directors

Answer 73

A) affiliated directors

Question 74

Which of the following statements is true concerning secondary stakeholders?
A) Secondary stakeholders are those who have only an indirect stake in the corporation, but who
are affected by corporate activities.
B) Secondary stakeholders usually include non-governmental organizations (like Greenpeace)
and trade associations.
C) Because the corporation’s relationship with each of these stakeholders is usually not covered
by any written or verbal agreement, there is room for misunderstanding.
D) Aside from competitors, secondary stakeholders are not usually monitored by the corporation
in any systematic fashion.
E) all of the above

Answer 74

E) all of the above

Question 75

Which of the following companies was cited by the text as an example of a company which does
its best to consider its responsibilities to its primary and secondary stakeholders when making
strategic decisions?
A) McDonald’s
B) Johnson & Johnson
C) Maytag
D) Microsoft

Answer 75

B) Johnson & Johnson

Question 76

The Ethics Resource Center found that the percentage of employees who had engaged in one or
more unethical and/or illegal actions during the past year was
A) less than 1%.
B) 21%.
C) 48%.
D) 76%.

Answer 76

C) 48%.

Question 77

The relationship among the board of directors, top management, and shareholders is referred to
as
A) corporate synergy.
B) corporate management.
C) corporate governance.
D) corporate strategy.

Answer 77

C) corporate governance.

Question 78

According to a survey by the Ethics Resource Center, which was NOT cited as one of the most
common questionable behaviors that employees engage in?
A) cutting corners on quality
B) covering up incidents
C) abusing or lying about sick days
D) surfing the web on company time

Answer 78

D) surfing the web on company time

Question 79

As opposed to rule-based countries, relationship-based countries tend to
A) be more transparent and have a higher degree of corruption.
B) be more transparent and have a lower degree of corruption.
C) be less transparent and have a lower degree of corruption.
D) be less transparent and have a higher degree of corruption.

Answer 79

D) be less transparent and have a higher degree of corruption.

Question 80

Of the six values measured by the Allpot-Vernon-Lindzey Study of Values test, both U.S. and
British executives consistently score highest on ________ values and lowest on ________
values.
A) religious and theoretical; economic and social
B) religious and economic; political and social
C) economic and political; social and religious
D) social and religious; aesthetic and political

Answer 80

C) economic and political; social and religious

Question 81

Rule-based governance
A) is generally found in developing nations.
B) relies on publicly verifiable information.
C) relies on implicit agreement.
D) is inherently nontransparent.

Answer 81

B) relies on publicly verifiable information.

Question 82

Which of the following is an example of a mission statement?
A) Diversify product line to appeal to more people.
B) Increase sales by 10% over last year.
C) Pay highest salaries to keep high quality employees.
D) Develop and sell quality appliances worldwide.

Answer 82

D) Develop and sell quality appliances worldwide.

Question 83

Which of the following is one of the most common reasons given by surveyed executives for
bending the rules to attain their objectives?
A) organizational performance required it
B) rules were ambiguous or out of date
C) everyone does it
D) pressure from others
E) all of the above

Answer 83

E) all of the above

Question 84

Vice President Sherron Watkins used the ________ analogy to explain why executives at Enron
engaged in unethical and illegal actions.
A) borrowing earnings
B) Napoleon complex
C) Moral relativism
D) Frogs in boiling water

Answer 84

D) Frogs in boiling water

Question 85

Some people claim that morality is relative to some personal, social, or cultural standard and that
there is no method for deciding whether one decision is better than another. This is called
A) ethical relativity.
B) moral philosophy.
C) comparative ethics.
D) cultural imperialism.
E) moral relativism.

Answer 85

E) moral relativism.

Question 86

All of the following reasons provide rationale for unethical behavior EXCEPT
A) the impact of cultural norms and values.
B) differences in values between business people and key stakeholders.
C) ambiguous rules.
D) agreement among stakeholders and business people about what is ethical.

Answer 86

D) agreement among stakeholders and business people about what is ethical.

Question 87

All of the following are one of the four types of moral relativism EXCEPT
A) naive relativism.
B) principled relativism.
C) role relativism.
D) social group relativism.

Answer 87

B) principled relativism.

Question 88

Role relativism is based on the belief that
A) morality is relative to a particular culture.
B) all moral decisions are deeply personal and each person should be allowed to interpret
situations and act on his own moral values
C) social roles carry with them certain obligations.
D) morality is simply a matter of following the norms of an individual’s peer group.

Answer 88

C) social roles carry with them certain obligations.

Question 89

"When in Rome, do as the Romans do" reflects which type of moral relativism?
A) naive relativism
B) role relativism
C) principled relativism
D) cultural relativism

Answer 89

D) cultural relativism

Question 90

Blindly following orders reflects which type of moral relativism?
A) naive relativism
B) role relativism
C) principled relativism
D) cultural relativism

Answer 90

B) role relativism

Question 91

According to Kohlberg, the first level of moral development, characterized by concern for self, is
called
A) principled.
B) conventional.
C) essential.
D) preconventional.

Answer 91

D) preconventional.

Question 92

According to Kohlberg, the second level of moral development, characterized by considerations
of society's laws and norms, is called
A) principled.
B) conventional.
C) essential.
D) preconventional.

Answer 92

B) conventional.

Question 93

According to Kohlberg, the third level of moral development, characterized by a person’s
adherence to an internal moral code, is called
A) principled.
B) conventional.
C) essential.
D) preconventional.

Answer 93

A) principled.

Question 94

According to Kohlberg, in what stage of moral development do the majority of people in the
U.S. occupy?
A) principled stage
B) conventional stage
C) essential stage
D) preconventional stage

Answer 94

B) conventional stage

Question 95

A code of ethics was important for two reasons. The first reason is that it clarifies company
expectations of employee conduct in various situations, and the second reason is
A) to reduce the burden on the judicial system.
B) that it makes clear that the company expects its people to recognize the ethical
dimensions in decision and actions.
C) to promote a high level of societal norms.
D) that it encourages individuals to strive for good citizenship and corporations to contribute
positively to society.

Answer 95

B) that it makes clear that the company expects its people to recognize the ethical

Question 96

Managers who want to improve ethical behavior should take actions such as
A) communicate the code of ethics in training programs.
B) emphasize the code of ethics in performance appraisal systems.
C) follow a code of ethical behavior themselves.
D) communicate the code of ethics in policies and procedures.
E) all of the above

Answer 96

E) all of the above

Question 97

Specific changes reported by CEOs in a survey by the Business Roundtable Institute for
Corporate Ethics included all of the following EXCEPT
A) enhanced internal reporting and communications.
B) ethics hotlines.
C) improved compliance procedures.
D) decreased number of whistleblowers.

Answer 97

D) decreased number of whistleblowers.

Question 98

Ethics is defined as
A) formal codes that permit or forbid certain behaviors.
B) a general rule of conduct of personal behavior, based on religious or philosophical grounds.
C) consensually accepted standards of behavior for an occupation, trade, or profession.
D) imposing one’s morality upon another.

Answer 98

C) consensually accepted standards of behavior for an occupation, trade, or profession.

Question 99

Employees who report illegal or unethical behavior on the part of others are known as
A) stakeholders.
B) whistleblowers.
C) moral relativists. 
D) retaliators.

Answer 99

B) whistleblowers.

Question 100

Which company cancelled contracts with 23 factories that did not meet its child-labor standards
for suppliers?
A) Levi Strauss
B) Gap International
C) Motorola
D) Enron

Answer 100

B) Gap International

Question 101

Morality is defined as
A) formal codes that permit or forbid certain behaviors.
B) a general rule of conduct of personal behavior, based on religious or philosophical
grounds.
C) consensually accepted standards of behavior for an occupation, trade, or profession.
D) imposing one’s morality upon another.

Answer 101

B) a general rule of conduct of personal behavior, based on religious or philosophical

Question 102

78) Law is defined as
A) formal codes that permit or forbid certain behaviors.
B) a general rule of conduct of personal behavior, based on religious or philosophical grounds.
C) consensually accepted standards of behavior for an occupation, trade, or profession.
D) imposing one’s morality upon another.

Answer 102

A) formal codes that permit or forbid certain behaviors.

Question 103

Which of the following is NOT a characteristic of strategic decisions as mentioned in the text?
A) directive
B) consequential
C) rare
D) continuous

Answer 103

D) continuous

Question 104

Which of the following is NOT a major force in the societal environment?
A) political-legal forces
B) labor forces
C) economic forces
D) technological forces

Answer 104

B) labor forces

Question 105

All of the following are technological breakthroughs already having a significant impact on
many industries EXCEPT
A) growing health consciousness. 
B) alternative energy sources.
C) genetically altered organisms.
D) smart, mobile robots.

Answer 105

A) growing health consciousness.

Question 106

Which societal force includes demographic trends?
A) political-legal forces
B) labor forces
C) economic forces 
D) technological forces 
E) sociocultural forces

Answer 106

E) sociocultural forces

Question 107

Which of the following is NOT one of the eight sociocultural trends mentioned in the text?
A) Increasing environmental awareness.
B) Growth of the seniors market.
C) Decline of the mass market.
D) Increasing food consumption.

Answer 107

D) Increasing food consumption.

Question 108

Which is the largest of the current US generations?
A) Baby Boomers
B) Woofies
C) Silent Generation
D) Gen X

Answer 108

A) Baby Boomers

Question 109

A company with significant assets and activities in multiple countries is known as a(n) \_\_\_\_\_\_\_\_. 
A) multinational corporation
B) repatriated corporation
C) transferable corporation
D) duplicate corporation

Answer 109

A) multinational corporation

Question 110

When strategic managers have a willingness to reject unfamiliar as well as negative information
it is referred to as
A) strategic paralysis.
B) corporate inertia.
C) management indifference.
D) strategic myopia.

Answer 110

D) strategic myopia.

Question 111

The issues priority matrix used in environmental scanning is composed of two axis or
dimensions which are labeled
A) importance to the industry and likelihood of occurrence.
B) industry growth rate and probable competitive position.
C) probability of occurrence and probable impact on the corporation.
D) probable industry attractiveness and business strength/competitive position.

Answer 111

C) probability of occurrence and probable impact on the corporation.

Question 112

What are the key environmental trends that are judged to have a medium to high probability of
occurrence and a medium to high probability of impact on the corporation?
A) external strategic factors
B) scenarios
C) industry forces
D) strategic issues

Answer 112

A) external strategic factors

Question 113

Industry analysis is primarily concerned with a corporation's
A) societal environment.
B) task environment.
C) sociocultural environment. 
D) economic environment.

Answer 113

B) task environment.

Question 114

58) According to Porter, the corporation is most concerned with
A) the intensity of competition within its industry.
B) the aggregate level of demand for a product line.
C) a market’s position on its life cycle.
D) the amount of pressure from the societal environment.

Answer 114

A) the intensity of competition within its industry.

Question 115

In addition to Porter's Five Forces, another force added in the text is
A) bargaining power of unions.
B) other stakeholders. 
C) threat of prospects.
D) threat of shareholders.

Answer 115

B) other stakeholders.

Question 116

The emphasis of strategic management is on
A) monitoring and evaluating external opportunities and threats in light of a corporation’s
strengths and weaknesses.
B) first line managers.
C) the short-run performance of the corporation.
D) an examination of the organization’s internal environment.

Answer 116

A) monitoring and evaluating external opportunities and threats in light of a corporation’s
strengths and weaknesses.

Question 117

The collective strength of the interaction of potential entrants, buyers, substitutes, suppliers, firm
rivalry, and other stakeholders determine
A) the level of government action in an industry.
B) the probable industry attractiveness and business strength position.
C) the ultimate profit potential in the industry measured in terms of long-run return on
invested capital.
D) the aggregate level of demand for a product line.

Answer 117

C) the ultimate profit potential in the industry measured in terms of long-run return on

Question 118

According to Porter's model, a strong or high force is likely to reduce profits and can be regarded
as a(n)
A) benefit.
B) opportunity.
C) advantage.
D) threat.

Answer 118

D) threat.

Question 119

According to Porter's model, a low force can enable the company to earn greater profits and can
be regarded as a(n)
A) benefit.
B) opportunity.
C) advantage.
D) threat.

Answer 119

B) opportunity.

Question 120

Which of the following is NOT descriptive of the “threat of new entrants”?
A) Depends on the presence of entry barriers.
B) Have a desire to gain market share.
C) Depends on the reaction of existing competitors.
D) Does not impact industry attractiveness.

Answer 120

D) Does not impact industry attractiveness.

Question 121

Which barrier to entry uses brand identification to force new entrants to spend heavily to
overcome existing customer loyalty?
A) rivalry among existing firms
B) switching costs
C) capital requirements
D) product differentiation

Answer 121

D) product differentiation

Question 122

Which barrier to entry uses cost advantages associated with large size?
A) rivalry among existing firms
B) switching costs
C) cost disadvantages independent of size
D) capital requirements
E) economies of scale

Answer 122

E) economies of scale

Question 123

Which barrier to entry is demonstrated by Microsoft’s MS-DOS operating system?
A) government policy
B) switching costs
C) cost disadvantages independent of size
D) capital requirements

Answer 123

C) cost disadvantages independent of size

Question 124

Intel was able to gain a significant cost advantage over its competitors in the production and sale
of microprocessors because of
A) capital requirements.
B) product differentiation.
C) switching costs.
D) economies of scale.

Answer 124

D) economies of scale.

Question 125

Which of the following is NOT descriptive of intense rivalry among firms?
A) slow industry growth
B) high fixed costs
C) high exit barriers
D) few competitors or competitors that are roughly equal in size and power
E) product offerings that are highly differentiated

Answer 125

E) product offerings that are highly differentiated

Question 126

Which of the following is NOT descriptive of “threat of substitute products or services”?
A) Substitute products appear to be different, but satisfy the same need as another product.
B) If the cost of switching is low, substitutes may have a strong effect on an industry.
C) Identifying substitutes is relatively easy since they look similar.
D) Possible substitute products or services may not appear to be easily substitutable.

Answer 126

C) Identifying substitutes is relatively easy since they look similar.

Question 127

A sugar company that is worried that consumers may buy artificial sweetener instead of sugar is
concerned about the
A) threat of new entrants.
B) rivalry among existing firms.
C) threat of substitute products.
D) bargaining power of suppliers.

Answer 127

C) threat of substitute products.

Question 128

When General Motors considers making its own automotive parts, Delphi Automotive Supply
Company would be concerned with the
A) bargaining power of suppliers.
B) bargaining power of buyers.
C) rivalry among existing competitors.
D) threat of substitutes.

Answer 128

B) bargaining power of buyers.

Question 129

Which of the following is NOT descriptive of a high level of bargaining power of suppliers?
A) Substitutes are readily available.
B) The product or service is unique.
C) The supplier industry is dominated by a few companies, but sells too many.
D) The purchasing industry buys only a small portion of the supplier group’s goods and services.

Answer 129

A) Substitutes are readily available.

Question 130

Other software companies could not compete with Microsoft based on the hesitation of
consumers to try a new software. Which of Porter’s forces does this reflect?
A) threat of new entrants
B) bargaining power of buyers
C) threat of substitutes
D) bargaining power of suppliers

Answer 130

D) bargaining power of suppliers

Question 131

A relationship that illustrates the term complementor is
A) Microsoft and Intel.
B) General Motors and Ford.
C) Hewlett Packard and Compaq.
D) Gateway and Dell.

Answer 131

A) Microsoft and Intel.

Question 132

According to the text, the strength of each of the six driving forces of industry competition varies
according to the
A) effectiveness of the strategic planning.
B) stage of industry evolution.
C) industry growth rate and competitive position.
D) changes in the political environment.

Answer 132

B) stage of industry evolution.

Question 133

In a fragmented industry
A) no firm has large market share.
B) prices drop as new competitors enter the market.
C) economies of scale are used to reduce costs.
D) companies integrate to further reduce costs.
E) all of the above.

Answer 133

E) all of the above.

Question 134

The U.S. major home appliance industry, including the companies of Maytag, Whirlpool,
General Electric, and Electrolux, is an example of an industry
A) that has evolved from an oligopoly to a monopoly.
B) in which each company maintained a distinct product line.
C) that was once fragmented, but now is consolidated.
D) that has experienced consistent, increasing sales.

Answer 134

C) that was once fragmented, but now is consolidated.

Question 135

An industry dominated by a few large firms, all of which struggle with product differentiation, is
known as
A) multidomestic.
B) consolidated.
C) global.
D) indigenous.

Answer 135

B) consolidated.

Question 136

In which type of international industry do corporations tailor their products to the specific needs
of consumers in a particular country?
A) consortium industry
B) global industry
C) indigenous industry
D) multidomestic industry

Answer 136

D) multidomestic industry

Question 137

Which type of international industry manufactures and sells the same products with only minor
adjustments made for individual countries around the world?
A) consortium industry
B) global industry
C) indigenous industry
D) multidomestic industry

Answer 137

B) global industry

Question 138

Which of the following is an example of a global industry?
A) retailing
B) banking
C) tires
D) insurance

Answer 138

tires

Question 139

The two factors that tend to determine whether an industry will be primarily multidomestic or
primarily global are (1) the pressure for coordination within the MNCs operating in that industry
and (2):
A) the pressure for local responsiveness on the part of individual country markets.
B) the power of the local country governments to restrict MNC actions.
C) the need for brand management in the various MNCs operating within that industry.
D) the importance of differentiating with integrating mechanisms in regional cooperatives.

Answer 139

A) the pressure for local responsiveness on the part of individual country markets.

Question 140

When the pressure for coordination is strong and the pressure for local responsiveness is weak
for multinational corporations within a particular industry, the industry will tend to become
A) global.
B) consolidated.
C) multidomestic.
D) risky.

Answer 140

A) global.

Question 141

When the pressure for local responsiveness is strong and the pressure for coordination is weak
for multinational corporations in an industry, the industry will tend to become
A) global.
B) consolidated.
C) multidomestic.
D) risky.

Answer 141

C) multidomestic.

Question 142

What is a set of business units or firms that "pursue similar strategies with similar resources"?
A) strategic group
B) collective collaboration
C) cooperative
D) integral association

Answer 142

A) strategic group

Question 143

Which of the following is NOT one of the general strategic types?
A) initiators
B) reactors
C) analyzers
D) prospectors

Answer 143

A) initiators

Question 144

Which strategic orientation is demonstrated by companies that have a limited product line and
focuses on improving the efficiency of their existing operations?
A) initiators
B) reactors
C) analyzers
D) prospectors
E) defenders

Answer 144

E) defenders

Question 145

A company that operates in at least two different product-market areas in which one product is
stable and the other one is variable, reflects which strategic orientation?
A) initiators
B) reactors
C) analyzers
D) prospectors

Answer 145

C) analyzers

Question 146

Companies with fairly broad product lines that focus on product innovations and market
opportunities, reflect which strategic orientation?
A) initiators
B) reactors
C) analyzers
D) prospectors

Answer 146

D) prospectors

Question 147

Which of the following is an example of a mission statement?
A) Diversify product line to appeal to more people.
B) Increase sales by 10% over last year.
C) Pay highest salaries to keep high quality employees.
D) Develop and sell quality appliances worldwide.

Answer 147

D) Develop and sell quality appliances worldwide.

Question 148

Corporations that lack a consistent strategy-structure-culture relationship reflect which strategic
orientation?
A) initiators
B) reactors
C) analyzers
D) prospectors

Answer 148

B) reactors

Question 149

To succeed in a hypercompetitive industry, companies must be willing to
A) cut prices below marginal costs.
B) pursue market share instead of profits.
C) operate in the ethical gray zone.
D) cannibalize their own successful product lines.

Answer 149

D) cannibalize their own successful product lines.

Question 150

A table which summarizes the key success factors within a particular industry is called a(n)
A) EFAS Table.
B) IFAS Table.
C) SFAS Table.
D) TOWS Matrix.
E) industry matrix.

Answer 150

E) industry matrix.

Question 151

A formal program of gathering information on a company's competitors is referred to as
A) statistical modeling.
B) competitive intelligence.
C) competitive strategy.
D) quantitative forecasting.

Answer 151

B) competitive intelligence.

Question 152

Which of the following is true in regards to competitive intelligence?
A) The Economic Espionage Act makes it illegal to steal any material that a business has taken
“reasonable efforts” to keep secret.
B) The Society of Competitive Intelligence Professionals urges strategists to stay within the law
and to act ethically when searching for information.
C) The Society of Competitive Intelligence Professionals states that illegal activities are foolish
because the vast majority of worthwhile competitive intelligence is available publicly via annual
reports, web sites, and libraries.
D) A number of firms hire consultants with questionable reputations who do what is necessary to
get information when the selected methods do not meet SPIC ethical standards or are illegal.
E) all of the above

Answer 152

E) all of the above

Question 153

The primary activity of competitive intelligence is to
A) monitor competitors.
B) engage in corporate espionage
C) survey stakeholders
D) determine industry R & D statistics

Answer 153

A) monitor competitors.

Question 154

A study of nearly 500 of the world’s largest corporations indicated which of the following to be
the most widely practiced form of forecasting?
A) statistical modeling
B) scenario-writing
C) delphi technique
D) brainstorming
E) trend extrapolation

Answer 154

D) brainstorming