Test 1

Question 1

Vice President James E. Small is responsible for executing decisions about human resources. Mr. Small is

Answer 1

… a functional manager

Question 2

What managers are responsible for the specific business functions or operations that constitute a company or one of its divisions?

Answer 2

Functional managers

Question 3

The first component of the strategic management process is…

Answer 3

crafting the organization’s mission statement, which provides the framework or context within which strategies are formulated

Question 4

Strategy formulation refers to the…

Answer 4

task of analyzing the organization’s external and internal environment and then selecting an appropriate strategy

Question 5

A mission statement has ____________ main components

Answer 5

Four

Question 6

What enables a firm to evaluate the effectiveness of its strategic choices

Answer 6

The feedback loop

Question 7

What strategies are often a result of unplanned action taken in response to unforeseen circumstances

Answer 7

Emergent strategies

Question 8

The comparison of strengths, weaknesses, opportunities, and threats is normally referred to as a/an

Answer 8

SWOT analysis

Question 9

When considering emergent strategies, it is important for a firm’s managers to…

Answer 9

…assess whether the emergent strategy fits the company’s needs and capabilities.

Question 10

What does The scenario approach to strategic planning involve?

Answer 10

formulating plans that are based upon “what if” scenarios about the future.

Question 11

What occurs when strategic plans are formulated in a vacuum by top managers who have little understanding or appreciation of current operating realities.

Answer 11

Ivory tower planning

Question 12

One important way in which managers can make better use of their knowledge and information is to understand and manage their _____________ during the course of decision-making

Answer 12

Emotions

Question 13

What cognitive bias occurs when decision makers commit even more resources if they receive feedback that the project is failing?

Answer 13

Escalating commitment

Question 14

_______________ is rooted in the tendency to generalize from a small sample or even a single vivid anecdote

Answer 14

Representativeness

Question 15

Jeffrey Pfeffer believes that a manager’s political power comes from his or her control over

Answer 15

organizational resources

Question 16

What involves one group member being responsible for questioning the assumptions of a plan.

Answer 16

Devils advocacy

Question 17

Effective _________________ develop a network of formal and informal sources who keep them well informed about what is going on within their company

Answer 17

strategic leaders

Question 18

Internal stakeholders of a company include

Answer 18

the board of directors

Question 19

External stakeholders of a company include

Answer 19

Customers

Question 20

What group is not among the external claimants on a company?

Answer 20

Stockholders

Question 21

The ___________ of a company lay(s) out some desired future state.

Answer 21

Vision

Question 22

What are the characteristics of well-constructed goals?

Answer 22

a. They are precise and measurable.
b. They are challenging but realistic
c. They specify a time period.
d. They address crucial issues. Incorrect

Question 23

The capital that stockholders provide to a company is seen as

Answer 23

risk capital

Question 24

______________________ is the set of values, norms, and standards that control how employees work to achieve an organization’s mission and goals

Answer 24

organizational culture

Question 25

When managers pursue strategies that are not in the interests of stockholders, this is called __________________.

Answer 25

Agency problem

Question 26

What are the types of governance mechanism?

Answer 26

a. The takeover constraint b. The board of directors c. Stock-based compensation Incorrect d. Financial statements

Question 27

The centerpiece of the corporate governance system in the United States and the United Kingdom is___________________.

Answer 27

the board of directors

Question 28

The most common pay-for-performance system that have been to give managers is ________________.

Answer 28

stock options

Question 29

Publicly trading companies in the United States are required to file quarterly and __________ reports with the SEC that are prepared according to GAAP

Answer 29

Annual

Question 30

What are the responsibilities of the board of directors?

Answer 30

a. Monitor corporate strategy decisions and ensure that they are consistent with stockholders interests c. Hire, fire, and compensate the CEO d. Apply sanctions on management when appropriate Incorrect e. Make sure the audited financial statements present a true picture of the company's financial situation

Question 31

In the business arena the laws that govern product liability are called __________________.

Answer 31

Tort laws

Question 32

A takeover constraint does what?

Answer 32

Limits the extent to which managers can pursue strategies that are inconsistent with shareholder interest through the risk of being acquired by another company

Question 33

Business ethics is primarily concerned with

Answer 33

ensuring managers weigh the ethical implications of their decisions.

Question 34

The most common examples of unethical behavior include...

Answer 34

a. information manipulation b. self-dealing c. anti-competitive behavior d. the maintenance of substandard working conditions

Question 35

What are the potential causes of unethical behavior in organizations?

Answer 35

a. Failure to examine the ethical dimensions of a decision b. An organizational culture that de-emphasizes ethical behavior c. Management pressure to meet organizational objectives by "cutting corners" d. Weak ethical leadership

Question 36

When managers of a firm seek to unilaterally rewrite the terms of a contract with suppliers, buyers, or complement providers in a way that is more favorable to their firm they are engaging in

Answer 36

opportunistic exploitation.

Question 37

When managers pay bribes to gain access to lucrative business contracts they are engaging in

Answer 37

Corruption

Question 38

To make sure that ethical issues are considered in business decisions

Answer 38

Top managers should articulate and model ethical behaviors

Question 39

_____________ covers a range of actions aimed at harming actual or potential competitors, most often by using monopoly power, thereby enhancing the long-run prospects of the firm.

Answer 39

Anti-competitive behavior

Question 40

_______________ are individuals who are responsible for making sure that all employees are trained to be ethically aware, that ethical considerations enter the business decision-making process, and that the company code of ethics is adhered to.

Answer 40

Ethics officers

Question 41

Identify the three levels of strategic managers and discuss their role in the strategic management process.

Answer 41

Ch 1

Question 42

Discuss the four best ways for managers to make sure that the ethical considerations are taken into account when making business decisions.

Answer 42

Ch 2

Question 43

A competitive advantage is considered to be a sustained competitive advantage when...

Answer 43

.. it is able to maintain above-average profitability for a number of years