Ch3 – Social Entrepreneurs, Ethics, and + Test Bank Docx - Small Business Competitive Advantage 7e Test Bank by Timothy S. Hatten. DOCX document preview.
Test Bank
Chapter 3: Social Entrepreneurs, Ethics, and Strategic Planning
Multiple Choice
1. The obligations of a business to maximize the positive effects it has on society and minimize the negative effects are referred to as ______.
a. ethics
b. social responsibility
c. strategic planning
d. sustainability
KEY: Learning Objective: 3.1: Explain the relationship between social responsibility, ethics, and strategic planning.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 3.1: Relationship Between Social Responsibility, Ethics, and Strategic Planning
Difficulty Level: Easy
TOP: AACSB Standard: Ethical understanding and reasoning
2. Which concept refers to the fact that a business has the obligation to impact society on four levels--economic, legal, ethical, and philanthropic?
a. business responsibility
b. moral obligation
c. social responsibility
d. ethical responsibility
KEY: Learning Objective: 3.1: Explain the relationship between social responsibility, ethics, and strategic planning.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 3.1: Relationship Between Social Responsibility, Ethics, and Strategic Planning
Difficulty Level: Easy
TOP: AACSB Standard: Ethical understanding and reasoning
3. Strategic planning is providing the ______ game plan for a business.
a. near-term
b. long-term
c. short-term
d. intermediate-term
KEY: Learning Objective: 3.1: Explain the relationship between social responsibility, ethics, and strategic planning.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 3.1: Relationship Between Social Responsibility, Ethics, and Strategic Planning
Difficulty Level: Easy
TOP: AACSB Standard: Ethical understanding and reasoning
4. ______ is a set of shared beliefs within an organization.
a. Ethics
b. Social responsibility
c. Strategic planning
d. Culture
KEY: Learning Objective: 3.2: Describe the impact of social entrepreneurship on small business.
REF: Cognitive Domain: Knowledge
Answer Location: Social Responsibility
Difficulty Level: Easy
TOP: AACSB Standard: Ethical understanding and reasoning
5. Wilma has been described by others as a good corporate citizen. She contributes to the community by volunteering through her church and she strives to improve the quality of life in everyone she meets. Wilma possesses qualities within which level of the social responsibility pyramid?
a. philanthropic goodwill
b. ethical responsibility
c. legal obligations
d. economic responsibility
KEY: Learning Objective: 3.2: Describe the impact of social entrepreneurship on small business.
REF: Cognitive Domain: Knowledge
Answer Location: Philanthropic Goodwill
Difficulty Level: Easy
TOP: AACSB Standard: Reflective thinking
6. Art has always played by the rules and obeyed the law. He believes that law is society’s codification of right and wrong. Art possesses qualities within which level of the social responsibility pyramid?
a. philanthropic goodwill
b. ethical responsibility
c. legal obligations
d. economic responsibility
KEY: Learning Objective: 3.2: Describe the impact of social entrepreneurship on small business.
REF: Cognitive Domain: Knowledge
Answer Location: Legal Obligations
Difficulty Level: Easy
TOP: AACSB Standard: Reflective thinking
7. The level of social responsibility that has historically been the focus of business is ______.
a. legal
b. economic
c. ethical
d. philanthropic
KEY: Learning Objective: 3.2: Describe the impact of social entrepreneurship on small business.
REF: Cognitive Domain: Knowledge
Answer Location: Economic Responsibility
Difficulty Level: Easy
TOP: AACSB Standard: Ethical understanding and reasoning
8. The view that a business must make a profit in order to survive and make other contributions is known as ______.
a. economic responsibility
b. legal responsibility
c. ethical responsibility
d. philanthropic responsibility
KEY: Learning Objective: 3.2: Describe the impact of social entrepreneurship on small business.
REF: Cognitive Domain: Knowledge
Answer Location: Economic Responsibility
Difficulty Level: Easy
TOP: AACSB Standard: Ethical understanding and reasoning
9. Which level of social responsibility centers on making sure creditors are paid, a strong competitive advantage is maintained, and operations are efficient?
a. economic responsibility
b. legal responsibility
c. ethical responsibility
d. philanthropic responsibility
KEY: Learning Objective: 3.2: Describe the impact of social entrepreneurship on small business.
REF: Cognitive Domain: Knowledge
Answer Location: Economic Responsibility
Difficulty Level: Easy
TOP: AACSB Standard: Ethical understanding and reasoning
10. Which responsibility is at the highest level on the social responsibility pyramid?
a. economic responsibility
b. legal responsibility
c. ethical responsibility
d. philanthropic responsibility
KEY: Learning Objective: 3.2: Describe the impact of social entrepreneurship on small business.
REF: Cognitive Domain: Knowledge
Answer Location: Philanthropic Goodwill
Difficulty Level: Medium
TOP: AACSB Standard: Ethical understanding and reasoning
11. Economist Milton Friedman emphasized the fact that business had “one and only one social responsibility,” that being ______.
a. economic responsibility
b. legal responsibility
c. ethical responsibility
d. philanthropic responsibility
KEY: Learning Objective: 3.2: Describe the impact of social entrepreneurship on small business.
REF: Cognitive Domain: Knowledge
Answer Location: Economic Responsibility
Difficulty Level: Easy
TOP: AACSB Standard: Ethical understanding and reasoning
12. The level of responsibility that leads to obedience of the law is what level of social responsibility?
a. economic responsibility
b. legal obligation
c. ethical responsibility
d. philanthropic goodwill
KEY: Learning Objective: 3.2: Describe the impact of social entrepreneurship on small business.
REF: Cognitive Domain: Knowledge
Answer Location: Legal Obligation
Difficulty Level: Easy
TOP: AACSB Standard: Ethical understanding and reasoning
13. The minimum threshold of socially expected business behavior is which two levels of social responsibility?
a. economic and philanthropic
b. economic and legal
c. ethical and legal
d. ethical and philanthropic
KEY: Learning Objective: 3.2: Describe the impact of social entrepreneurship on small business.
REF: Cognitive Domain: Knowledge
Answer Location: Ethical Responsibility
Difficulty Level: Easy
TOP: AACSB Standard: Ethical understanding and reasoning
14. Dealing with the consequences of one’s own actions is referred to as ______.
a. idealism
b. utilitarianism
c. deontology
d. virtue ethics
KEY: Learning Objective: 3.2; Describe the impact of social entrepreneurship on small business.
REF: Cognitive Domain: Knowledge
Answer Location: Ethical Responsibility
Difficulty Level: Easy
TOP: AACSB Standard: Ethical understanding and reasoning
15. As a business manager, Sally focuses on employing only those individuals who have a strong character of honesty and integrity. This aligns most closely with which ethical perspective?
a. idealism
b. utilitarianism
c. deontology
d. virtue ethics
KEY: Learning Objective: 3.2: Describe the impact of social entrepreneurship on small business.
REF: Cognitive Domain: Knowledge
Answer Location: Ethical Responsibility
Difficulty Level: Easy
TOP: AACSB Standard: Reflective thinking
16. The company New Leaf develops and sells eco-friendly paper in an industry that is notorious for both severe environmental impact and resistance to change. This company can be viewed as ______.
a. socially responsible
b. economically responsible
c. legally responsible
d. fiscally responsible
KEY: Learning Objective: 3.2: Describe the impact of social entrepreneurship on small business.
REF: Cognitive Domain: Knowledge
Answer Location: Social Responsibility
Difficulty Level: Easy
TOP: AACSB Standard: Reflective thinking
17. The obligation of individuals and businesses to do what is right is known as ______.
a. economic responsibility
b. legal responsibility
c. ethical responsibility
d. philanthropic responsibility
KEY: Learning Objective: 3.2: Describe the impact of social entrepreneurship on small business.
REF: Cognitive Domain: Knowledge
Answer Location: Ethical Responsibility
Difficulty Level: Easy
TOP: AACSB Standard: Ethical understanding and reasoning
18. Which level of social responsibility is concerned with a business doing well without the expectation of anything in return?
a. economic responsibility
b. legal obligations
c. ethical responsibility
d. philanthropic goodwill
KEY: Learning Objective: 3.2: Describe the impact of social entrepreneurship on small business.
REF: Cognitive Domain: Knowledge
Answer Location: Philanthropic Goodwill
Difficulty Level: Easy
TOP: AACSB Standard: Ethical understanding and reasoning
19. Philanthropic goodwill would be concerned with which of the following?
a. reasonable profit
b. meeting the legal requirements of all laws dealing with discrimination
c. meeting obligations to society
d. improving quality of life and promoting generosity
KEY: Learning Objective: 3.2: Describe the impact of social entrepreneurship on small business.
REF: Cognitive Domain: Knowledge
Answer Location: Philanthropic Goodwill
Difficulty Level: Medium
TOP: AACSB Standard: Ethical understanding and reasoning
20. Philanthropic activity is best suited to ______.
a. small companies
b. medium-sized companies
c. large corporations
d. any sized company
KEY: Learning Objective: 3.2: Describe the impact of social entrepreneurship on small business.
REF: Cognitive Domain: Knowledge
Answer Location: Philanthropic Goodwill
Difficulty Level: Easy
TOP: AACSB Standard: Ethical understanding and reasoning
21. A small business sponsoring a Little League team for the summer would be an example of which level of social responsibility?
a. economic
b. legal obligations
c. ethical
d. philanthropic goodwill
KEY: Learning Objective: 3.2: Describe the impact of social entrepreneurship on small business.
REF: Cognitive Domain: Knowledge
Answer Location: Philanthropic Goodwill
Difficulty Level: Easy
TOP: AACSB Standard: Reflective thinking
22. In the National Business Ethics Survey, ______ percent of U.S. small business respondents considered their top managers ethical.
a. 80
b. 58
c. 49
d. 41
KEY: Learning Objective: 3.3: Discuss the importance of ethics for your small business.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 3.3: Ethics and Business Strategy
Difficulty Level: Easy
TOP: AACSB Standard: Ethical understanding and reasoning
23. The rules of moral values that guide decision making, or one’s understanding of right or wrong, are referred to as ______.
a. cultural values
b. business ethics
c. mission and vision
d. social norms
KEY: Learning Objective: 3.3: Discuss the importance of ethics for your small business.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 3.3: Ethics and Business Strategy
Difficulty Level: Easy
TOP: AACSB Standard: Ethical understanding and reasoning
24. A tool with which the owner of a business communicates ethical expectations to everyone associated with the business is called a ______.
a. code of conduct
b. tool of ethics
c. code of ethics
d. tool of conduct
KEY: Learning Objective: 3.3: Discuss the importance of ethics for your small business.
REF: Cognitive Domain: Knowledge
Answer Location: Codes of Ethics
Difficulty Level: Easy
TOP: AACSB Standard: Ethical understanding and reasoning
25. Which of the following does not apply to an ethical code that is written for a small business?
a. It should be written concisely and clearly.
b. It should apply equally to all employees.
c. It should be a reflection of the small business owner’s ideals and beliefs.
d. It should not be included in an employee handbook.
KEY: Learning Objective: 3.3: Discuss the importance of ethics for your small business.
REF: Cognitive Domain: Knowledge
Answer Location: Codes of Ethics
Difficulty Level: Medium
TOP: AACSB Standard: Ethical understanding and reasoning
26. How often should your firm’s ethics code be reviewed?
a. annually
b. once it is established, it should never be changed
c. every day
d. whenever the firm is covered unfavorably in the media
KEY: Learning Objective: 3.3: Discuss the importance of ethics for your small business.
REF: Cognitive Domain: Knowledge
Answer Location: Codes of Ethics
Difficulty Level: Easy
TOP: AACSB Standard: Ethical understanding and reasoning
27. A long-term planning tool used for viewing a business and the environments in which it operates in the broadest terms is ______.
a. strategic planning
b. intermediate planning
c. short-term planning
d. strategic alternatives
KEY: Learning Objective: 3.4a: Describe each step in the strategic planning process.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 3.4: Strategic Planning
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
28. The first function of good management is which of the following?
a. good planning
b. good organization
c. good leadership
d. good recruiting and hiring
KEY: Learning Objective: 3.4a: Describe each step in the strategic planning process.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 3.4: Strategic Planning
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
29. Green marketing refers to businesses showing concern for which of the following issues?
a. the environment
b. willingness to devote a percentage of profits to charitable organizations
c. landscaping cities through development of parks
d. offering child care services as part of employee benefit packages
KEY: Learning Objective: 3.4a: Describe each step in the strategic planning process.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 3.4: Strategic Planning
Difficulty Level: Medium
TOP: AACSB Standard: Ethical understanding and reasoning
30. A/an ______ helps an organization determine the most appropriate steps to take to accomplish the goals that are identified in the strategic plan.
a. mission statement
b. code of ethics
c. strategic objective
d. action plan
KEY: Learning Objective: 3.4a: Describe each step in the strategic planning process.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 3.4: Strategic Planning
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
31. ______ is a long-range management tool that helps small businesses be proactive in the way they respond to environmental change.
a. Strategic planning
b. Short-term planning
c. Intermediate planning
d. Strategic alternatives
KEY: Learning Objective: 3.4a: Describe each step in the strategic planning process.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 3.4: Strategic Planning
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
32. The process of ______ provides an overview of a business and all the factors that may affect it in the next three to five years.
a. strategic planning
b. short-term planning
c. intermediate planning
d. strategic alternatives
KEY: Learning Objective: 3.4a: Describe each step in the strategic planning process.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 3.4: Strategic Planning
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
33. The statement of the reason an organization exists is called a ______.
a. profit margin
b. mission statement
c. statement of intentions
d. profit potential
KEY: Learning Objective: 3.4a: Describe each step in the strategic planning process.
REF: Cognitive Domain: Knowledge
Answer Location: Mission Statement
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
34. The foundation on which all other goals and strategies are based is a ______.
a. mission statement
b. statement of intentions
c. code of ethics
d. list of company goals
KEY: Learning Objective: 3.4a: Describe each step in the strategic planning process.
REF: Cognitive Domain: Knowledge
Answer Location: Mission Statement
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
35. One of Robert’s roles within the company that he manages is to constantly examine what is happening in all sectors that have an impact on the industry, both within the business and outside of it. This role is referred to as ______.
a. social entrepreneurship
b. BCG analysis
c. environmental analysis
d. strategic impass
KEY: Learning Objective: 3.4a: Describe each step in the strategic planning process.
REF: Cognitive Domain: Knowledge
Answer Location: Environmental Analysis
Difficulty Level: Easy
TOP: AACSB Standard: Reflective thinking
36. The mission statement should have how many words?
a. 100 or fewer
b. 75 or fewer
c. 50 or fewer
d. 25 or fewer
KEY: Learning Objective: 3.4a: Describe each step in the strategic planning process.
REF: Cognitive Domain: Knowledge
Answer Location: Mission Statement
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
37. The step of strategic planning in which the internal strengths and weaknesses of a business and the opportunities and threats that exist outside the business is called a/an ______.
a. SWAT analysis
b. SWOT analysis
c. external environmental analysis
d. internal environmental analysis
KEY: Learning Objective: 3.4a: Describe each step in the strategic planning process.
REF: Cognitive Domain: Knowledge
Answer Location: Environmental Analysis
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
38. Environmental analysis is important to small businesses because ______.
a. they are less flexible
b. they are less sensitive to customer preferences
c. they have more competitors
d. they have fewer resources to risk
KEY: Learning Objective: 3.4a: Describe each step in the strategic planning process.
REF: Cognitive Domain: Knowledge
Answer Location: Environmental Analysis
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
39. The increased popularity of tattoos among teens and twenty-somethings means opportunity for skin artists who are able to provide this service in a small business. This is an example of what type of opportunity?
a. economic
b. legal
c. competitive
d. sociocultural
KEY: Learning Objective: 3.4a: Describe each step in the strategic planning process.
REF: Cognitive Domain: Knowledge
Answer Location: Environmental Analysis
Difficulty Level: Medium
TOP: AACSB Standard: Reflective thinking
40. An analysis of the ______ environment identifies strengths and weaknesses that exist within the business.
a. internal
b. external
c. economic
d. sociocultural
KEY: Learning Objective: 3.4a: Describe each step in the strategic planning process.
REF: Cognitive Domain: Knowledge
Answer Location: Environmental Analysis
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
41. Threats and opportunities to a business can be found in which of the following environments?
a. economic and legal only
b. legal and sociocultural only
c. technological and competitive only
d. economic, legal, sociocultural, competitive, and technological
KEY: Learning Objective: 3.4a: Describe each step in the strategic planning process.
REF: Cognitive Domain: Knowledge
Answer Location: Environmental Analysis
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
42. Which of the following environments would the threat of new trade restrictions fall into?
a. economic
b. legal/regulatory
c. sociocultural
d. competitive
KEY: Learning Objective: 3.4a: Describe each step in the strategic planning process.
REF: Cognitive Domain: Knowledge
Answer Location: Environmental Analysis
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
43. Which of the following environments would a change in the age of the Baby Boomers fall into?
a. economic
b. legal/regulatory
c. sociocultural
d. competitive
KEY: Learning Objective: 3.4a: Describe each step in the strategic planning process.
REF: Cognitive Domain: Knowledge
Answer Location: Environmental Analysis
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
44. Which of the following environments would a change in the interest rate fall into?
a. economic
b. legal/regulatory
c. sociocultural
d. competitive
KEY: Learning Objective: 3.4a: Describe each step in the strategic planning process.
REF: Cognitive Domain: Knowledge
Answer Location: Environmental Analysis
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
45. Which type of analysis is important in matching the strengths of a business to the external environmental factors that are identified?
a. external analysis
b. internal analysis
c. SWOT analysis
d. SWAT analysis
KEY: Learning Objective: 3.4a: Describe each step in the strategic planning process.
REF: Cognitive Domain: Knowledge
Answer Location: Environmental Analysis
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
46. The facet of a business that the business does better than all of its competitors is known as which of the following?
a. competitive advantage
b. competitive edge
c. competitive power
d. absolute advantage
KEY: Learning Objective: 3.4b: Explain the importance of competitive advantage.
REF: Cognitive Domain: Knowledge
Answer Location: Competitive Analysis
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
47. Incorporating the best elements of a competitor’s products into a product is called ______.
a. benchmarking
b. reverse engineering
c. reengineering
d. SWOT analysis
KEY: Learning Objective: 3.4b: Explain the importance of competitive advantage.
REF: Cognitive Domain: Knowledge
Answer Location: Competitive Analysis
Difficulty Level: Medium
TOP: AACSB Standard: Analytical thinking
48. Which of the following ideas is not valuable in defining competitive advantage?
a. Advantages are relative, not absolute.
b. Multiple types of competitive advantages should be strived for.
c. Areas of competition change over time.
d. Once found, a good competitive advantage will remain an advantage for years.
KEY: Learning Objective: 3.4b: Explain the importance of competitive advantage.
REF: Cognitive Domain: Knowledge
Answer Location: Competitive Analysis
Difficulty Level: Medium
TOP: AACSB Standard: Analytical thinking
49. ______ refers to how passively or aggressively the businesses within an industry compete with each other.
a. Threat of substitute products or services
b. Threat of new entrants
c. Degree of rivalry among existing competitors
d. Degree of external competition
KEY: Learning Objective: 3.4b: Explain the importance of competitive advantage.
REF: Cognitive Domain: Knowledge
Answer Location: Competitive Analysis
Difficulty Level: Medium
TOP: AACSB Standard: Analytical thinking
50. ______ is a function of how easily other businesses can enter the market.
a. Degree of rivalry among existing competitors
b. Threat of new entrants
c. Bargaining power of competition
d. Threat of substitute products or services
KEY: Learning Objective: 3.4b: Explain the importance of competitive advantage.
REF: Cognitive Domain: Knowledge
Answer Location: Competitive Analysis
Difficulty Level: Medium
TOP: AACSB Standard: Analytical thinking
51. ______ affects the price that must be paid to produce goods.
a. Degree of rivalry among existing competitors
b. Bargaining power of suppliers
c. Bargaining power of buyers
d. Threat of substitute products or services
KEY: Learning Objective: 3.4b: Explain the importance of competitive advantage.
REF: Cognitive Domain: Knowledge
Answer Location: Competitive Analysis
Difficulty Level: Medium
TOP: AACSB Standard: Analytical thinking
52. ______ affects how much prices may be changed.
a. Degree of rivalry among existing competitors
b. Bargaining power of suppliers
c. Bargaining power of buyers
d. Threat of substitute products or services
KEY: Learning Objective: 3.4b: Explain the importance of competitive advantage.
REF: Cognitive Domain: Knowledge
Answer Location: Competitive Analysis
Difficulty Level: Medium
TOP: AACSB Standard: Analytical thinking
53. ______ is determined by the options that customers have when buying the products or services of a business.
a. Threat of new entrants
b. Degree of rivalry among existing competitors
c. Bargaining power of buyers
d. Threat of substitute products or services
KEY: Learning Objective: 3.4b: Explain the importance of competitive advantage.
REF: Cognitive Domain: Knowledge
Answer Location: Competitive Analysis
Difficulty Level: Medium
TOP: AACSB Standard: Analytical thinking
54. Intrigued by the fast-paced technology industry, Samantha decided to open a technology start-up. She soon realized that the competition in this industry is fierce and a high level of capital is needed to stay on top. After a few years, she sold her company and went on to pursue different interests. This is an example of which fatal flaw in strategic thinking?
a. failure to identify a true competitive advantage
b. misreading industry attractiveness
c. pursuing a competitive advantage that is not sustainable
d. compromising a strategy in an attempt to grow faster
KEY: Learning Objective: 3.4b: Explain the importance of competitive advantage.
REF: Cognitive Domain: Knowledge
Answer Location: Competitive Analysis
Difficulty Level: Medium
TOP: AACSB Standard: Reflective thinking
55. ______ are a good example of failing to identify a true competitive advantage.
a. Imitations
b. Misleading strategies
c. Vague employee instructions
d. Misreading industries
KEY: Learning Objective: 3.4b: Explain the importance of competitive advantage.
REF: Cognitive Domain: Knowledge
Answer Location: Competitive Analysis
Difficulty Level: Medium
TOP: AACSB Standard: Analytical thinking
56. Having a competitive advantage is ______, otherwise the business is not needed.
a. unnecessary
b. necessary
c. critical
d. relative to the industry
KEY: Learning Objective: 3.4b: Explain the importance of competitive advantage.
REF: Cognitive Domain: Knowledge
Answer Location: Competitive Analysis
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
57. In order to cope with a quickly changing competitive environment, small businesses need to be ______.
a. competition driven
b. reactive
c. market driven
d. liquid
KEY: Learning Objective: 3.4b: Explain the importance of competitive advantage.
REF: Cognitive Domain: Knowledge
Answer Location: Competitive Analysis
Difficulty Level: Medium
TOP: AACSB Standard: Analytical thinking
58. Occasionally, competitive advantages are gained after a product ______.
a. has been previously introduced
b. has been discontinued
c. has been recalled
d. has been discovered to have numerous defects
KEY: Learning Objective: 3.4b: Explain the importance of competitive advantage.
REF: Cognitive Domain: Knowledge
Answer Location: Competitive Analysis
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
59. There are ______ generic competitive strategies by which a small business can gain a competitive advantage.
a. two
b. three
c. four
d. five
KEY: Learning Objective: 3.4b: Explain the importance of competitive advantage.
REF: Cognitive Domain: Knowledge
Answer Location: Competitive Analysis
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
60. Differentiation can effectively remove direct competition if customers can be shown that ______.
a. the difference is better
b. the difference is lower prices
c. the product is collectible
d. the product is brand name specific
KEY: Learning Objective: 3.4b: Explain the importance of competitive advantage.
REF: Cognitive Domain: Knowledge
Answer Location: Competitive Analysis
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
61. If a business intends to compete primarily on product price, it must ______.
a. advertise
b. raise prices
c. lower prices
d. lower costs
KEY: Learning Objective: 3.4b: Explain the importance of competitive advantage.
REF: Cognitive Domain: Knowledge
Answer Location: Competitive Analysis
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
62. Studies that measure the impact that a mass merchandiser like Wal-Mart has on small retailers have shown that small stores usually ______.
a. go out of business
b. stay in business but make minor profits
c. outperform Wal-Mart
d. benefit as long as they stock different merchandise
KEY: Learning Objective: 3.4b: Explain the importance of competitive advantage.
REF: Cognitive Domain: Knowledge
Answer Location: Competitive Analysis
Difficulty Level: Medium
TOP: AACSB Standard: Analytical thinking
63. An advantage does not necessarily have to be in the ______. It may come from anything the business does.
a. market
b. product
c. economy
d. customer’s tastes
KEY: Learning Objective: 3.4b: Explain the importance of competitive advantage.
REF: Cognitive Domain: Knowledge
Answer Location: Competitive Analysis
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
64. ______ research offers a way to answer questions about the customers’ changing wants and needs.
a. Market
b. Competitive
c. Internal
d. Operations management
KEY: Learning Objective: 3.4b: Explain the importance of competitive advantage.
REF: Cognitive Domain: Knowledge
Answer Location: Competitive Analysis
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
65. The products and services that people like and dislike at any particular time are shaped by ______.
a. one or two major influences
b. usually ten influences
c. hundreds of identifiable influences
d. hundreds of unidentifiable influences
KEY: Learning Objective: 3.4b: Explain the importance of competitive advantage.
REF: Cognitive Domain: Knowledge
Answer Location: Competitive Analysis
Difficulty Level: Medium
TOP: AACSB Standard: Analytical thinking
66. In order to write effective goals, which of the following factors must be considered?
a. Goals should be written in terms of actions.
b. Goals should be measurable.
c. Goals should be difficult to accomplish.
d. Goals should have no definite time period for completion.
KEY: Learning Objective: 3.4a: Describe each step in the strategic planning process.
REF: Cognitive Domain: Knowledge
Answer Location: Goal Setting and Strategies
Difficulty Level: Medium
TOP: AACSB Standard: Analytical thinking
67. Cindy owns a flower shop, and her primary goal is to increase sales in the current fiscal year. This goal can best be described as ______.
a. measurable
b. challenging, yet attainable
c. communicated with everyone in the company
d. written with a time frame for achievement
KEY: Learning Objective: 3.4a: Describe each step in the strategic planning process.
REF: Cognitive Domain: Knowledge
Answer Location: Goal Setting and Strategies
Difficulty Level: Medium
TOP: AACSB Standard: Reflective thinking
68. According to the text, if completion of your SWOT and competitive analysis identifies no major problems ______.
a. you must have overlooked something
b. there may not be problems at present but you need to focus on potential future problems
c. that may be because you are not doing anything
d. don’t fix anything
KEY: Learning Objective: 3.4a: Describe each step in the strategic planning process.
REF: Cognitive Domain: Knowledge
Answer Location: Strategic Alternatives
Difficulty Level: Medium
TOP: AACSB Standard: Analytical thinking
69. A business-level goal describes ______.
a. who the small business owner is and what the business is
b. the performance desired from specific departments
c. a plan of action that details how plans will be accomplished
d. what the overall business should accomplish
KEY: Learning Objective: 3.4a: Describe each step in the strategic planning process.
REF: Cognitive Domain: Knowledge
Answer Location: Goal Setting and Strategies
Difficulty Level: Medium
TOP: AACSB Standard: Analytical thinking
70. A function-level goal describes ______.
a. who the small business owner is and what the business is
b. the performance desired from specific departments
c. a plan of action that details how plans will be accomplished
d. what the overall business should accomplish
KEY: Learning Objective: 3.4a: Describe each step in the strategic planning process.
REF: Cognitive Domain: Knowledge
Answer Location: Goal Setting and Strategies
Difficulty Level: Medium
TOP: AACSB Standard: Analytical thinking
71. A strategy describes ______.
a. who the small business owner is and what the business is
b. the performance desired from specific departments
c. a plan of action that details how plans will be accomplished
d. what the overall business should accomplish
KEY: Learning Objective: 3.4a: Describe each step in the strategic planning process.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 3.4: Strategic Planning
Difficulty Level: Medium
TOP: AACSB Standard: Analytical thinking
72. What type of planning addresses operational growth?
a. strategic planning
b. business planning
c. ethical planning
d. financial planning
KEY: Learning Objective: 3.4a: Describe each step in the strategic planning process.
REF: Cognitive Domain: Knowledge
Answer Location: Strategic Planning in Action
Difficulty Level: Medium
TOP: AACSB Standard: Analytical thinking
NARRBEGIN: 3-1
Scenario 3-1. Betty’s Bed and Breakfast is a small business that provides a bed and breakfast for travelers usually on their way to the Grand Canyon. The business resides in a small community whose economy is primarily devoted to tourism. Betty obtains her livelihood from her business. Because she provides food, she is inspected yearly by government agencies to ensure she is meeting governmental guidelines concerning food preparation. Betty feels strongly that her business is not only to provide shelter and food but also information on directions, room reservations, medical information, and any other information that she has available or can find for her guests. This information includes a short-cut that can be taken to the Grand Canyon that reduces traveling time by an hour. This past summer she sponsored a soccer team comprised of elementary students from the local grade school. The soccer team placed third in the state finals.
NARREND
73. In Scenario 3-1, which level of the social responsibility pyramid would Milton Friedman maintain Betty should be most concerned with?
a. economic responsibility
b. legal obligations
c. ethical responsibility
d. philanthropic goodwill
KEY: Learning Objective: 3.2: Describe the impact of social entrepreneurship on small business.
REF: Cognitive Domain: Comprehension
Answer Location: Economic Responsibility
Difficulty Level: Easy
TOP: AACSB Standard: Reflective thinking
NAR: 3-1
74. In Scenario 3-1, which level of the social responsibility pyramid is Betty concerned with when she is preparing food?
a. economic responsibility
b. legal obligations
c. ethical responsibility
d. philanthropic goodwill
KEY: Learning Objective: 3.2: Describe the impact of social entrepreneurship on small business.
REF: Cognitive Domain: Comprehension
Answer Location: Legal Obligations
Difficulty Level: Easy
TOP: AACSB Standard: Reflective thinking
NAR: 3-1
75. In Scenario 3-1, besides providing her customers with the best service possible, Betty is also interested in the rest of their trip. Which level of the social responsibility pyramid addresses this aspect of her business?
a. economic responsibility
b. legal obligations
c. ethical responsibility
d. philanthropic goodwill
KEY: Learning Objective: 3.2: Describe the impact of social entrepreneurship on small business.
REF: Cognitive Domain: Comprehension
Answer Location: Ethical Responsibility
Difficulty Level: Easy
TOP: AACSB Standard: Reflective thinking
NAR: 3-1
76. In Scenario 3-1, the sponsorship of the soccer team would fall under which level of social responsibility?
a. economic responsibility
b. legal obligations
c. ethical responsibility
d. philanthropic goodwill
KEY: Learning Objective: 3.2: Describe the impact of social entrepreneurship on small business.
REF: Cognitive Domain: Comprehension
Answer Location: Philanthropic Goodwill
Difficulty Level: Easy
TOP: AACSB Standard: Reflective thinking
NAR: 3-1
77. In Scenario 3-1, Betty’s competitive advantage would be which of the following?
a. the bed and food she provides
b. the sponsorship of the soccer team
c. the extra services she provides her guests
d. the strictness with which she adheres to food preparation
KEY: Learning Objective: 3.4b: Explain the importance of competitive advantage.
REF: Cognitive Domain: Comprehension
Answer Location: Competitive Analysis
Difficulty Level: Medium
TOP: AACSB Standard: Reflective thinking
NAR: 3-1
NARRBEGIN: 3-2
Scenario 3-2. Terry’s Technology Service is currently conducting a SWOT analysis of the business. Several differing factors have been observed. One of the major strengths of Terry’s business is that he has kept current with all the new technologies that have been developing. The ability to adapt the technologies to business applications has been a key feature of the business. A definite weakness of the business is that Terry’s cash flow has been strained lately due to the capital investments that are necessary in order to keep up with current technological advances. Owing to Terry’s good relationship with his customers, he is getting many referrals for new customers. A recent consideration is his competition. A new business has started in town that is offering similar services.
NARREND
78. In Scenario 3-2, keeping current with the new technologies and the cash flow problem are examples of which environment?
a. external environment
b. internal environment
c. economic environment
d. technological environment
KEY: Learning Objective: 3.4a: Describe each step in the strategic planning process.
REF: Cognitive Domain: Comprehension
Answer Location: Environmental Analysis
Difficulty Level: Easy
TOP: AACSB Standard: Reflective thinking
NAR: 3-2
79. In Scenario 3-2, Terry’s new competition and his potential customer referrals are examples of which environment?
a. external environment
b. internal environment
c. economic environment
d. technological environment
KEY: Learning Objective: 3.4a: Describe each step in the strategic planning process.
REF: Cognitive Domain: Comprehension
Answer Location: Environmental Analysis
Difficulty Level: Easy
TOP: AACSB Standard: Reflective thinking
NAR: 3-2
80. In Scenario 3-2, an increase in interest rates seems very likely in the future. This will severely affect Terry’s cash flow problems. This is an example of a threat from which of the following environments?
a. economic environment
b. legal/regulatory environment
c. sociocultural environment
d. competitive environment
KEY: Learning Objective: 3.4a: Describe each step in the strategic planning process.
REF: Cognitive Domain: Comprehension
Answer Location: Environmental Analysis
Difficulty Level: Easy
TOP: AACSB Standard: Reflective thinking
NAR: 3-2
81. In Scenario 3-2, Terry is seriously considering dropping his hourly fee. He is doing this in response to which environment?
a. economic environment
b. legal/regulatory environment
c. sociocultural environment
d. competitive environment
KEY: Learning Objective: 3.4a: Describe each step in the strategic planning process.
REF: Cognitive Domain: Comprehension
Answer Location: Environmental Analysis
Difficulty Level: Easy
TOP: AACSB Standard: Reflective thinking
NAR: 3-2
82. In Scenario 3-2, considering the business that Terry is pursuing, which of the following environments must he pay close attention to?
a. economic environment
b. legal/regulatory environment
c. competitive environment
d. technological environment
KEY: Learning Objective: 3.4a: Describe each step in the strategic planning process.
REF: Cognitive Domain: Comprehension
Answer Location: Environmental Analysis
Difficulty Level: Easy
TOP: AACSB Standard: Reflective thinking
NAR: 3-2
True/False
1. Strategic planning is the process of identifying the mission, goals, and objectives of a business.
KEY: Learning Objective: 3.1: Explain the relationship between social responsibility, ethics, and strategic planning.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 3.1: Relationship Between Social Responsibility, Ethics, and Strategic Planning
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
2. Social responsibility is the obligation of a business to maximize the positive impact it has on society and to minimize the negative impact.
KEY: Learning Objective: 3.1: Explain the relationship between social responsibility, ethics, and strategic planning.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 3.1: Relationship Between Social Responsibility, Ethics, and Strategic Planning
Difficulty Level: Easy
TOP: AACSB Standard: Ethical understanding and reasoning
3. Social responsibility refers to the rules of moral values that guide decision-making.
KEY: Learning Objective: 3.1: Explain the relationship between social responsibility, ethics, and strategic planning.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 3.1: Relationship Between Social Responsibility, Ethics, and Strategic Planning
Difficulty Level: Easy
TOP: AACSB Standard: Ethical understanding and reasoning
4. The philanthropic goodwill level on the social responsibility pyramid is concerned with a company’s obligation to be ethical and to do what is right, just, and fair.
KEY: Learning Objective: 3.2: Describe the impact of social entrepreneurship on small business.
REF: Cognitive Domain: Knowledge
Answer Location: Philanthropic Goodwill
Difficulty Level: Medium
TOP: AACSB Standard: Ethical understanding and reasoning
5. Historically, the primary role of business has been economic.
KEY: Learning Objective: 3.2: Describe the impact of social entrepreneurship on small business.
REF: Cognitive Domain: Knowledge
Answer Location: Economic Responsibility
Difficulty Level: Easy
TOP: AACSB Standard: Ethical understanding and reasoning
6. Philanthropy is the bottom level of the social responsibility pyramid.
KEY: Learning Objective: 3.2: Describe the impact of social entrepreneurship on small business.
REF: Cognitive Domain: Knowledge
Answer Location: Philanthropic Goodwill
Difficulty Level: Easy
TOP: AACSB Standard: Ethical understanding and reasoning
7. Milton Friedman emphasizes the philanthropic side of social responsibility.
KEY: Learning Objective: 3.2: Describe the impact of social entrepreneurship on small business.
REF: Cognitive Domain: Knowledge
Answer Location: Economic Responsibility
Difficulty Level: Easy
TOP: AACSB Standard: Ethical understanding and reasoning
8. Virtue ethics deals with the consequences of one’s own actions.
KEY: Learning Objective: 3.2: Describe the impact of social entrepreneurship on small business.
REF: Cognitive Domain: Knowledge
Answer Location: Ethical Responsibility
Difficulty Level: Medium
TOP: AACSB Standard: Ethical understanding and reasoning
9. Over the past several years, the term social entrepreneur has emerged as a way to describe the use of business skills to marshal resources.
KEY: Learning Objective: 3.2: Describe the impact of social entrepreneurship on small business.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 3.2: Social Entrepreneurship
Difficulty Level: Easy
TOP: AACSB Standard: Ethical understanding and reasoning
10. Changes in ethical standards and values usually precede changes in laws.
KEY: Learning Objective: 3.2: Describe the impact of social entrepreneurship on small business.
REF: Cognitive Domain: Knowledge
Answer Location: Ethical Responsibility
Difficulty Level: Easy
TOP: AACSB Standard: Ethical understanding and reasoning
11. Utilitarianism is rule-based or duty-based.
KEY: Learning Objective: 3.2: Describe the impact of social entrepreneurship on small business.
REF: Cognitive Domain: Knowledge
Answer Location: Ethical Responsibility
Difficulty Level: Medium
TOP: AACSB Standard: Analytical thinking
12. A code of ethics is a formal statement of the long-range goals and plans for a company.
KEY: Learning Objective: 3.3: Discuss the importance of ethics for your small business.
REF: Cognitive Domain: Knowledge
Answer Location: Codes of Ethics
Difficulty Level: Easy
TOP: AACSB Standard: Ethical understanding and reasoning
13. When it comes to a code of ethics, companies should take a “three Ps” approach: print it, post it, and pray they read it.
KEY: Learning Objective: 3.3: Discuss the importance of ethics for your small business.
REF: Cognitive Domain: Knowledge
Answer Location: Codes of Ethics
Difficulty Level: Easy
TOP: AACSB Standard: Ethical understanding and reasoning
14. A code of ethics that is supported and enforced by management will become a part of a company’s culture.
KEY: Learning Objective: 3.3: Discuss the importance of ethics for your small business.
REF: Cognitive Domain: Knowledge
Answer Location: Codes of Ethics
Difficulty Level: Easy
TOP: AACSB Standard: Ethical understanding and reasoning
15. The long-term planning tools used for viewing a business and its environment in the broadest of terms are known as the operational plan.
KEY: Learning Objective: 3.4a: Describe each step in the strategic planning process.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 3.4: Strategic Planning
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
16. The mission statement is the foundation on which all other goals and strategies of a business are based.
KEY: Learning Objective: 3.4a: Describe each step in the strategic planning process.
REF: Cognitive Domain: Knowledge
Answer Location: Mission Statement
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
17. The last step in the strategic planning process involves the establishment of control systems.
KEY: Learning Objective: 3.4a: Describe each step in the strategic planning process.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 3.4: Strategic Planning
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
18. An effective mission statement balances ideas and reality.
KEY: Learning Objective: 3.4a: Describe each step in the strategic planning process.
REF: Cognitive Domain: Knowledge
Answer Location: Mission Statement
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
19. The heart of the strategic planning process is the mission statement.
KEY: Learning Objective: 3.4a: Describe each step in the strategic planning process.
REF: Cognitive Domain: Knowledge
Answer Location: Mission Statement
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
20. There is little connection between strategic planning and social responsibility.
KEY: Learning Objective: 3.1: Explain the relationship between social responsibility, ethics, and strategic planning.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 3.1: Relationship Between Social Responsibility, Ethics, and Strategic Planning
Difficulty Level: Easy
TOP: AACSB Standard: Ethical understanding and reasoning
21. The step of strategic planning in which the manager identifies pollution caused by the firm is known as environmental analysis.
KEY: Learning Objective: 3.4a: Describe each step in the strategic planning process.
REF: Cognitive Domain: Knowledge
Answer Location: Environmental Analysis
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
22. A small business may be significantly more affected by an environmental change than a larger business would be.
KEY: Learning Objective: 3.4a: Describe each step in the strategic planning process.
REF: Cognitive Domain: Knowledge
Answer Location: Environmental Analysis
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
23. An analysis of the external environment identifies opportunities and threats faced by a business.
KEY: Learning Objective: 3.4a: Describe each step in the strategic planning process.
REF: Cognitive Domain: Knowledge
Answer Location: Environmental Analysis
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
24. External analysis assesses the strengths and weaknesses of a company.
KEY: Learning Objective: 3.4a: Describe each step in the strategic planning process.
REF: Cognitive Domain: Knowledge
Answer Location: Environmental Analysis
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
25. A competitive advantage must be sustainable over time in order to be a benefit to the business.
KEY: Learning Objective: 3.4b: Explain the importance of competitive advantage.
REF: Cognitive Domain: Knowledge
Answer Location: Competitive Analysis
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
26. A company’s competitive advantage could be defined as being the two things that the company does best that set it apart from the competition.
KEY: Learning Objective: 3.4b: Explain the importance of competitive advantage.
REF: Cognitive Domain: Knowledge
Answer Location: Competitive Analysis
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
27. A competitive advantage is the advantage that a business has over its competitors.
KEY: Learning Objective: 3.4b: Explain the importance of competitive advantage.
REF: Cognitive Domain: Knowledge
Answer Location: Competitive Analysis
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
28. A competitive advantage need not be sustainable in order to remain an advantage.
KEY: Learning Objective: 3.4b: Explain the importance of competitive advantage.
REF: Cognitive Domain: Knowledge
Answer Location: Competitive Analysis
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
29. A competitive advantage is relative, not absolute.
KEY: Learning Objective: 3.4b: Explain the importance of competitive advantage.
REF: Cognitive Domain: Knowledge
Answer Location: Competitive Analysis
Difficulty Level: Medium
TOP: AACSB Standard: Analytical thinking
30. Competitive advantage must be defined from the customer’s perspective.
KEY: Learning Objective: 3.4b: Explain the importance of competitive advantage.
REF: Cognitive Domain: Knowledge
Answer Location: Competitive Analysis
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
31. If a small business cannot sustain a competitive advantage, the best recommendation is to view the business as a short-term investment rather than a long-term enterprise.
KEY: Learning Objective: 3.4b: Explain the importance of competitive advantage.
REF: Cognitive Domain: Knowledge
Answer Location: Competitive Analysis
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
32. Having a competitive advantage is critical. Businesses must do something better than the competition.
KEY: Learning Objective: 3.4b: Explain the importance of competitive advantage.
REF: Cognitive Domain: Knowledge
Answer Location: Competitive Analysis
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
33. Competitive advantage as a core of small business strategy is critical, but the inertia of the marketplace may also be relied on for survival.
KEY: Learning Objective: 3.4b: Explain the importance of competitive advantage.
REF: Cognitive Domain: Knowledge
Answer Location: Competitive Analysis
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
34. When looking for a competitive advantage, one of the best tools for survival is looking at the mistakes of other businesses.
KEY: Learning Objective: 3.4b: Explain the importance of competitive advantage.
REF: Cognitive Domain: Knowledge
Answer Location: Competitive Analysis
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
35. A competitive advantage will cause customers to be more satisfied with one business, resulting in increased market share for that business.
KEY: Learning Objective: 3.4b: Explain the importance of competitive advantage.
REF: Cognitive Domain: Knowledge
Answer Location: Competitive Analysis
Difficulty Level: Medium
TOP: AACSB Standard: Analytical thinking
36. The three generic competitive strategies by which a business can gain competitive advantage are lowering costs, differentiation, and focus strategies.
KEY: Learning Objective: 3.4b: Explain the importance of competitive advantage.
REF: Cognitive Domain: Knowledge
Answer Location: Competitive Analysis
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
37. Focus strategies target a broad segment of the market.
KEY: Learning Objective: 3.4b: Explain the importance of competitive advantage.
REF: Cognitive Domain: Knowledge
Answer Location: Competitive Analysis
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
38. Small businesses concentrate on niches or narrow market segments.
KEY: Learning Objective: 3.4b: Explain the importance of competitive advantage.
REF: Cognitive Domain: Knowledge
Answer Location: Competitive Analysis
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
39. Differentiation means that a product or service is different than the product or service of the competition.
KEY: Learning Objective: 3.4b: Explain the importance of competitive advantage.
REF: Cognitive Domain: Knowledge
Answer Location: Competitive Analysis
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
40. A single method to continuously differentiate a product will sustain a competitive advantage.
KEY: Learning Objective: 3.4b: Explain the importance of competitive advantage.
REF: Cognitive Domain: Knowledge
Answer Location: Competitive Analysis
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
41. The most difficult part of strategic planning is drafting a list of alternatives.
KEY: Learning Objective: 3.4a: Describe each step in the strategic planning process.
REF: Cognitive Domain: Knowledge
Answer Location: Strategic Alternatives
Difficulty Level: Medium
TOP: AACSB Standard: Analytical thinking
42. Planning for the future is an exact science.
KEY: Learning Objective: 3.4a: Describe each step in the strategic planning process.
REF: Cognitive Domain: Knowledge
Answer Location: Strategic Alternatives
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
43. Business plans and strategic plans support each other but accomplish different purposes.
KEY: Learning Objective: 3.4a: Describe each step in the strategic planning process.
REF: Cognitive Domain: Knowledge
Answer Location: Strategic Planning in Action
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
Short Answer
1. Discuss the relationship between social responsibility, ethics, and strategic planning.
KEY: Learning Objective: 3.1: Explain the relationship between social responsibility, ethics, and strategic planning.
REF: Cognitive Domain: Comprehension
Answer Location: Concept Module 3.1: Relationship Between Social Responsibility, Ethics, and Strategic Planning
Difficulty Level: Medium
TOP: AACSB Standard: Ethical understanding and reasoning
2. Compare and contrast the four levels depicted in the pyramid of social responsibility.
KEY: Learning Objective: 3.2: Describe the impact of social entrepreneurship on small business.
REF: Cognitive Domain: Comprehension
Answer Location: Social Responsibility
Difficulty Level: Medium
TOP: AACSB Standard: Ethical understanding and reasoning
3. List and describe the four areas of laws that regulate business activity.
KEY: Learning Objective: 3.2: Describe the impact of social entrepreneurship on small business.
REF: Cognitive Domain: Comprehension
Answer Location: Legal Obligations
Difficulty Level: Medium
TOP: AACSB Standard: Ethical understanding and reasoning
4. Discuss the importance of a code of ethics for a business.
KEY: Learning Objective: 3.3: Discuss the importance of ethics for your small business.
REF: Cognitive Domain: Comprehension
Answer Location: Codes of Ethics
Difficulty Level: Medium
TOP: AACSB Standard: Ethical understanding and reasoning
5. Describe the importance of a mission statement to a business.
KEY: Learning Objective: 3.4a: Describe each step in the strategic planning process.
REF: Cognitive Domain: Comprehension
Answer Location: Mission Statement
Difficulty Level: Medium
TOP: AACSB Standard: Analytical thinking
6. Define competitive advantage and explain two core ideas that are valuable in defining competitive advantage.
KEY: Learning Objective: 3.4b: Explain the importance of competitive advantage.
REF: Cognitive Domain: Comprehension
Answer Location: Competitive Analysis
Difficulty Level: Medium
TOP: AACSB Standard: Analytical thinking
7. List and describe at least five areas of comparison that may be included in a competitive analysis.
KEY: Learning Objective: 3.4b: Explain the importance of competitive advantage.
REF: Cognitive Domain: Comprehension
Answer Location: Competitive Analysis
Difficulty Level:
TOP: AACSB Standard: Analytical thinking
8. Explain three of the five basic forces of competition that exist within every industry.
KEY: Learning Objective: 3.4b: Explain the importance of competitive advantage.
REF: Cognitive Domain: Comprehension
Answer Location: Competitive Analysis
Difficulty Level: Medium
TOP: AACSB Standard: Analytical thinking
9. Describe three benefits of gaining a competitive advantage.
KEY: Learning Objective: 3.4b: Explain the importance of competitive advantage.
REF: Cognitive Domain: Comprehension
Answer Location: Competitive Analysis
Difficulty Level: Medium
TOP: AACSB Standard: Analytical thinking
10. Explain in detail one strategy by which a business could gain a competitive advantage.
KEY: Learning Objective: 3.4b: Explain the importance of competitive advantage.
REF: Cognitive Domain: Comprehension
Answer Location: Competitive Analysis
Difficulty Level: Medium
TOP: AACSB Standard: Analytical thinking
11. Describe three components of well-written goals.
KEY: Learning Objective: 3.4a: Describe each step in the strategic planning process.
REF: Cognitive Domain: Comprehension
Answer Location: Goal Setting and Strategies
Difficulty Level: Medium
TOP: AACSB Standard: Analytical thinking
Document Information
Connected Book
Small Business Competitive Advantage 7e Test Bank
By Timothy S. Hatten