Exam Questions Ch.8 The Manager as a Planner and Strategist

Contemporary Management, 11e (Jones)

Chapter 8 The Manager as a Planner and Strategist

1) A mission statement is the set of decisions that managers make to assist the organization in attaining its goals.

2) To lower costs, the divisional head of an organization decides to set up the division's technical support center in another country. This is an example of a business-level strategy.

3) A company creates a document in which it identifies internal and external conditions that affect planning. This is known as a competitive analysis.

4) A brand of cereal attracts customers by offering the lowest prices among other brands of cereals. The company is using a differentiation strategy.

5) ACME is known for offering exclusive features that are not available by its competitors and charging a higher price for its appliances. ACME is following a differentiation strategy.

6) Sweet Style sells baby clothes in sizes for infants and children. They offer the lowest prices of any baby clothing retailer in the major cities along the East Coast. Sweet Style is following a focused low-cost strategy.

7) A computer operating system software manufacturer invests its profits to create newer versions of its operating system software to best leverage the ongoing advances in computer hardware. The company is following a diversification strategy.

8) A winery decides to manufacture its own bottles rather than purchase them from a bottle manufacturing company in order to reduce costs. The winery is employing a forward vertical integration strategy.

9) HiTech decides to begin distributing products in other countries, but it will not invest in customizations for any specific national market. HiTech is following a multidomestic strategy.

10) The planning process is complete when appropriate business and corporate strategies are selected that allow an organization to attain its mission and goals.

11) A(n) ________ is a group of related managerial decisions and actions to help an organization achieve its goals.

A) strategy

B) objective

C) motto

D) allocation

E) accomplishment

12) The home page for a pet daycare says it strives to "provide an affordable and safe home away from home where your pets are treated like family and our employees love them like their own." This excerpt is part of the business's

A) business plan.

B) mission statement.

C) SWOT analysis.

D) functional plan.

E) vision plan.

13) The first step in planning for an organization is

A) procuring raw materials and human resources.

B) formulating strategies to meet goals.

C) selecting effective ways to implement the strategies.

D) determining the organization's missions and goals.

E) allocating resources and responsibilities to achieve strategies.

14) According to Henri Fayol, an effective plan should have the qualities of unity, continuity, accuracy, and

A) sustainability.

B) flexibility.

C) accountability.

D) consistency.

E) synergy.

15) It is important that managers consider previous plans and make ongoing modifications that ensure plans at all levels fit together into one framework to achieve

A) unity.

B) flexibility.

C) accuracy.

D) continuity.

E) implementation.

16) According to Henri Fayol, a plan has ________ when the management team develops a single, well-researched, and effective plan.

A) unity

B) flexibility

C) continuity

D) accuracy

E) synergy

17) Celia is part of the team responsible for providing human resource planning and services for the rest of the company. Her team would be considered ________ managers.

A) business-level

B) corporate-level

C) strategic-level

D) functional-level

E) top-level

18) As CEO of his company, Bill works with a team of executives to make decisions pertaining to the organization's mission, overall strategy, and structure. These decisions are part of the organization's ________ plan.

A) corporate-level

B) divisional-level

C) functional-level

D) business-level

E) departmental-level

19) In a small developing country, the percentage of the population switching to cellular technology in recent years has been rapidly increasing. A multinational telecommunication services company decides to take advantage of this change by installing network infrastructure and establishing a sales presence in that country. This is an example of a ________ strategy.

A) divisional-level

B) departmental-level

C) functional-level

D) corporate-level

E) business-level

20) Eastern Region Vice President Goodall works with her team of sales managers to develop a ________ plan, which defines the strategies, goals, and structure associated with achieving the company's objectives in the Eastern region of the United States.

A) business-level

B) corporate-level

C) functional-level

D) departmental-level

E) global-level

21) The plastics division managers of a packaging company develops a ________ strategy to outline how it will compete against competitors.

A) corporate-level

B) business-level

C) functional-level

D) departmental-level

E) international-level

22) The management team of an automobile company's luxury division decides to release a new model a month ahead of the planned date and notifies all departments associated with the division. The departmental managers must alter their ________ plans to accommodate the earlier release.

A) functional-level

B) business-level

C) national-level

D) corporate-level

E) strategic-level

23) Each department within an organization should develop a ________ strategy to outline how the department will improve its ability to perform task-specific activities in ways that add value to the organization's goods and services.

A) business-level

B) divisional-level

C) corporate-level

D) functional-level

E) regional-level

24) A functional-level plan establishes the goals that the managers of each function will pursue to help the division attain its ________ goals, which then allow achievement of ________ goals.

A) departmental-level; functional-level

B) business-level; departmental-level

C) departmental-level; divisional-level

D) business-level; corporate-level

E) functional-level; corporate-level

25) A company's annual budget has a(n) ________ of one year.

A) event compass

B) goal duration

C) plan endurance

D) target visibility

E) time horizon

26) The intermediate- and short-term plans created within a work group typically address the ________ goals and strategies of an organization.

A) functional

B) business

C) divisional

D) corporate

E) global

27) Advanco, which completes in a highly competitive, fluctuating market, uses a(n) ________ corporate-level plan so it can make midcourse corrections while keeping its long-term goals in mind.

A) short-term

B) single-use

C) standing

D) rolling

E) ad hoc

28) A ________ plan is generally reviewed and amended in conjunction with a company's annual financial budget cycles to take into account changing conditions in the external business environment.

A) standing

B) short-term

C) rolling

D) contingency

E) single-use

29) As an event planner, Nicole prepares a detailed summary of the client's specific requirements, activities to be performed, and target dates for each activity. This is an example of a ________ plan.

A) standing

B) single-use

C) functional

D) scenario

E) rolling

30) Jerrod's company provides a policy document to every new employee that details procedures for time tracking, requesting vacation, and managing 401K enrollment cycles. This document is an example of a ________ plan.

A) single-use

B) functional

C) rolling

D) scenario

E) standing

31) Within 30 days of receiving a gift valued over $50 from a client, sales representatives in the company are required to submit a written disclosure. This is an example of a

A) strategy.

B) suggestion.

C) standard operating procedure.

D) policy.

E) scenario.

32) The employee handbook expresses an expectation that employees make every attempt to schedule their vacation time around any existing business commitments. This is an example of a

A) standard operating procedure.

B) policy.

C) heuristic.

D) rolling plan.

E) rule.

33) When situations occur repeatedly, organizations can develop ________ plans to outline policies, rules, and standard operating procedures (SOPs) on how to handle those situations.

A) single-use

B) functional

C) rolling

D) standing

E) scenario

34) Although it was not explicitly noted in the employee handbook, Jennie was told at the start of her internship that employees are expected to dress in business casual attire each day. This dress code is a ________ of the organization.

A) policy

B) rule

C) standard operating procedure

D) contingency plan

E) strategic goal

35) Jessie's law firm has a formal document that defines a zero-tolerance attitude toward sexual harassment and the consequences of any violations. This is a

A) guideline.

B) mission statement.

C) policy.

D) rule.

E) single-use plan.

36) The organizers of an upcoming festival conduct a meeting to discuss the steps that would be taken in the event of various weather or community events that may impact the festival. This activity is an example of ________ planning.

A) single-use

B) programmed

C) functional-level

D) divisional-level

E) scenario

37) Pinnacle Financial Services managers meet annually to create a list of potential future complications and plan how to respond to each possibility. Pinnacle is practicing ________ planning.

A) single-use

B) ad-hoc

C) divisional-level

D) contingency

E) functional-level

38) Prior to defining an organization's missions and goals, managers must

A) perform a SWOT analysis.

B) apply the five forces model.

C) define its business.

D) create a single-use plan.

E) create a standing plan.

39) The CEO of Blake's company effectively motivates employees by actively engaging them in her vision of the company's goals and what she believes they can achieve in the industry. The CEO exhibits ________ skills.

A) hypercompetition

B) strategic leadership

C) strategy formulation

D) business planning

E) scenario planning

40) A management team considers the organization's strengths and weaknesses as well as opportunities and threats in its current marketplace. The team is performing a ________ analysis.

A) scenario

B) SWOT

C) functional

D) diversification

E) competitive

41) According to an organization's SWOT analysis, a strength of the organization is

A) having the potential to successfully enter a new market.

B) having the ability to manage strategic change.

C) growing without a clear strategy.

D) serving a customer base with changing preferences.

E) expanding through forward vertical integration.

42) A recent SWOT analysis determines that a company's controls allowed inventory levels of some products to rise while other products to consistently be out of stock. The firm would classify this as a potential

A) strength.

B) weakness.

C) opportunity.

D) threat.

E) advantage.

43) According to the SWOT analysis, an opportunity for a company would be the ability to

A) take over a bankrupt competitor.

B) have the highest product sales in the industry.

C) create a better marketing plan.

D) be easily recognized by consumers and viewed favorably.

E) face increased competition in the market.

44) During a SWOT analysis, Sweet Treats identifies a growing number of local businesses now offering bakery items to customers. This finding would be characterized as a(n)

A) strength.

B) weakness.

C) opportunity.

D) threat.

E) advantage.

45) According to the five forces model, ________ levels of competition for customers translate to ________ levels of profit in the industry.

A) greater; lower

B) greater; higher

C) lower; lower

D) lower; equal

E) greater; equal

46) A large pharmaceutical company decides to reduce the price of a medication to encourage physicians to continue prescribing it as generic brands have entered the market. According to the five forces model, which competitive force is the company addressing?

A) low industry rivalry

B) high brand loyalty

C) power of large customers

D) threat of substitute products

E) power of large suppliers

47) The airlines sold fewer tickets to business travelers during the "Great Recession" due to more companies using video conferencing software to save money. According to the five forces model, this type of threat is called the

A) level of rivalry among organizations in an industry.

B) potential for entry into an industry.

C) power of large suppliers.

D) power of large customers.

E) threat of substitute products.

48) There is constant, fierce competition between telecommunication companies due to the continuous advances in mobile technology and a wide range of customer tastes. This is called

A) ultracompetition.

B) hypocompetition.

C) supercompetition.

D) hypercompetition.

E) extracompetition.

49) To maintain profits while offering the best industry pricing to customers, a furniture company decides to order materials in larger quantities to realize larger discounts on materials. The company is employing a ________ strategy.

A) focused differentiation

B) low-cost

C) high-cost

D) unifying

E) hypercompetition

50) An organization consistently invests above the industry average in research and development. As a result, it is able to offer exclusive product features although product pricing is higher to account for the additional investment. This organization is using a ________ strategy.

A) differentiation

B) low-cost

C) diversification

D) SWOT

E) high-cost

51) When pursuing both a low-cost and differentiation strategy,

A) organizations tend to have higher levels of performance.

B) a greater focus on differentiation will result in reduced costs.

C) managers are likely to get stuck in the middle.

D) a greater focus on low-cost will lead to more innovation.

E) organizations should focus on both equally.

52) A multinational tire manufacturer introduces a line of premium, high-priced tires that can handle extreme temperatures. The tires are only marketed in the Middle East and were designed with the climatic conditions of that region in mind. The manufacturer is pursuing a ________ strategy.

A) focused differentiation

B) focused low-cost

C) general differentiation

D) general low-cost

E) low-cost and a differentiation

53) ________ is a corporate-level strategy that emphasizes reinvesting a company's profits in strengthening its competitive position in its current industry.

A) Concentration on a single industry

B) Forward vertical integration

C) Diversification

D) Backward vertical integration

E) International expansion

54) ________ is a corporate-level strategy in which a company expands its business operations into a new industry that produces inputs for the company's products.

A) Forward vertical integration

B) Forward horizontal integration

C) Unrelated diversification

D) Backward horizontal integration

E) Backward vertical integration

55) After many years of distributing her clothing through a large chain of department stores, Georgia, a fashion designer, decides to open a boutique to exclusively sell her clothing directly to consumers. Georgia is following a(n) ________ strategy.

A) unrelated diversification

B) backward vertical integration

C) forward vertical integration

D) concentration on a single industry

E) forward horizontal integration

56) A company that enters a new business area in order to leverage existing expertise and achieve synergy across the newly combined set of products is following a ________ strategy.

A) related diversification

B) international expansion

C) focused low-cost

D) concentration on a single industry

E) unrelated diversification

57) Two divisions of a company decide to consolidate manufacturing facilities to maximize supplier discounts, optimize inventory management, and reduce fixed costs. This is an example of

A) diversification.

B) differentiation.

C) hypercompetition.

D) vertical integration.

E) synergy.

58) Cozy Threads, a clothing retailer, recently expanded its business by purchasing a regional airline. This business expansion is an example of

A) vertical integration.

B) unrelated diversification.

C) related diversification.

D) horizontal integration.

E) synergy.

59) In order to cater to local tastes and culinary traditions, a well-known restaurant chain offers customized versions of its menu in different countries. This is an example of a(n) ________ strategy.

A) international

B) global

C) multidomestic

D) low-cost

E) unrelated diversification

60) A(n) ________ strategy is selling the same standardized product and using the same basic marketing approach in each national market.

A) unrelated diversification

B) multidomestic

C) national

D) focused differentiation

E) global

61) Most electronic devices allow the users to select which operating language to utilize. Manufacturers do this so that the same electronic device can be supplied and marketed around the world. In this case, the manufacturers are applying a(n) ________ strategy.

A) focused differentiation

B) global

C) related diversification

D) multidomestic

E) unrelated diversification

62) Jerome's company asks him to recommend a method of international expansion that would incur the least amount of risk. Which method should he suggest?

A) exporting

B) franchising

C) licensing

D) wholly owned subsidiary

E) joint venture

63) ________ is allowing a foreign organization to take charge of manufacturing and distributing a product in its country or world region in return for a negotiated fee.

A) Licensing

B) Franchising

C) Strategic alliance

D) Exporting

E) Importing

64) ________ is selling to a foreign organization the rights to use a brand name and operating know-how in return for a lump-sum payment and a share of the profits.

A) Licensing

B) Franchising

C) Diversifying

D) Exporting

E) Importing

65) In order to pool or share resources and know-how with a foreign company and subsequently share the rewards and risks of starting a new venture in a foreign country, an organization would pursue a

A) corporate takeover.

B) franchising agreement.

C) licensing agreement.

D) strategic alliance.

E) foreign subsidiary.

66) A consumer electronics company and a telecommunications company establish a new company to jointly manufacture a new line of mobile phones. This is an example of a(n)

A) joint venture.

B) acquisition.

C) wholly owned subsidiary.

D) merger.

E) hostile takeover.

67) A cellphone provider establishes production operations in foreign countries to sell its phones in those regions. The operations perform as separate entities without any local direct involvement. These production operations are considered

A) joint ventures.

B) acquisitions.

C) wholly owned foreign subsidiaries.

D) strategic alliances.

E) franchises.

68) Pursuing international expansion through ________ exhibits the most risk and is the most expensive due to the high level of foreign investment required.

A) joint ventures

B) exporting and importing

C) licensing

D) franchising

E) wholly owned foreign subsidiaries

69) The first step of strategy implementation is

A) drafting detailed action plans that specify how the strategy is to be implemented.

B) allocating responsibility for implementation to the appropriate individuals or groups.

C) allocating appropriate resources to the responsible individuals or groups.

D) revisiting the strategy selection process to confirm the decision.

E) establishing a timetable for implementation with precise, measurable goals.

70) The final step managers face when implementing a strategy is

A) drafting detailed action plans that specify how the strategy is to be implemented.

B) allocating responsibility for implementation to the appropriate individuals or groups.

C) establishing a timetable for implementation with precise, measurable goals.

D) holding individuals or groups responsible for the attainment of strategic goals.

E) allocating appropriate resources to the responsible individuals or groups.

71) ANC Inc. operates with planning horizons greater than five years. However, it is difficult to predict competitive conditions five years in the future, so the top managers implement a plan that involves regular reviews and updates in all levels of the company. The plan enables the company to respond quickly and to make adjustments as necessary. This is an example of a(n) ________ plan.

A) short-term

B) long-term

C) intermediate-term

D) rolling

E) annual

72) ________ increases costs and forces companies to raise the prices of their products.

A) Licensing

B) Forward vertical integration

C) Backward vertical integration

D) Hypercompetition

E) Differentiation

73) A local bike shop offers free tune-ups and simple repairs for any bike purchased there and even provides free pick-up and delivery service for local customers. The shop is able to provide these exclusive services by selling its bikes at a premium price. The shop is following a ________ strategy.

A) differentiation

B) focused differentiation

C) vertical integration

D) focused integration

E) hypercompetition

74) A technology company decides to redesign key aspects of its products to better leverage the same components and reduce manufacturing overheads. These savings will then facilitate price reductions. What strategy is the company pursuing?

A) focused low-cost

B) low-cost

C) SWOT

D) focused differentiation

E) hypercompetition

75) ________ plans are useful to control the way employees perform tasks in cases where situations occur repeatedly.

A) Rolling

B) Single-use

C) Standing

D) Contingency

E) Scenario

76) In pursuing a ________ strategy, managers aim to make their organization the lowest-cost company serving a select few segments of the overall market.

A) differentiation

B) focused differentiation

C) low-cost

D) focused low-cost

E) hypercompetition

77) With a ________ strategy, managers aim to make their organization the most distinguished company serving just one or a few segments of the overall market.

A) hypercompetition

B) low-cost

C) focused low-cost

D) differentiation

E) focused differentiation

78) Managers use ________ to analyze how to respond effectively to multiple forecasts of future conditions.

A) scenario planning

B) a rolling plan

C) a standing plan

D) time horizons

E) a long-term plan

79) As managers plan for the future, it is important to handle unexpected circumstances. By developing backup plans with alternative courses of action defined in case conditions change, managers are conducting ________ planning.

A) single-use

B) scenario

C) long-term

D) short-term

E) rolling

80) One of the principal tasks of management is identifying and selecting appropriate goals and courses of action. This is referred to as

A) resourcing.

B) allocating.

C) planning.

D) implementing.

E) organizing.

81) The CEO of a restaurant chain announces that the company will be fully compliant with improved nutritional standards within the next three years. As the marketing manager for the restaurant, Brenda is tasked with developing goals and a plan for promoting the changes in concert with other areas within the company. Brenda's efforts are considered ________ planning.

A) divisional-level

B) time horizon

C) functional-level

D) scenario

E) corporate-level

82) When employees buy into a corporate vision and model their behavior on an executive who compels them to undertake the hard work necessary to achieve big goals, the executive is exhibiting effective

A) strategic leadership.

B) functional-level planning.

C) vertical integration.

D) strategic alliance.

E) risk taking.

83) A multidomestic company identifies a risk that regulations in some national markets will likely change over time. Such changes could impact product design and distribution in each market and have varying impacts on the company's financial success. What technique would best address the possible impacts of this risk when formulating strategic plans?

A) standard operating procedure planning

B) single-use planning

C) SWOT analysis

D) vertical integration

E) scenario planning

84) ________ is the process of developing an action plan that will allow an organization to achieve its goals, while using techniques such as SWOT analysis and the five forces model.

A) Functional planning

B) Diversification

C) Strategy formulation

D) Strategic alliance

E) Strategic leadership

85) A ________ is a type of strategic alliance characterized by the creation of a new organization where ownership is shared by two or more companies.

A) licensing agreement

B) franchising agreement

C) joint venture

D) vertical integration

E) wholly owned subsidiary

86) José is launching a management consulting business. What three steps would you recommend to José as he embarks on business planning?

87) Planning is an essential activity in any organization. Discuss the four primary benefits of planning.

88) According to Henri Fayol, effective plans should have the qualities of unity, continuity, accuracy, and flexibility. Describe each quality in the context of planning and provide an example where the lack of that quality would be a problem for an organization.

89) Define the three levels of planning and their respective strategies. Give an example of a strategy that can be applied at each level.

90) Explain the differences between standing and single-use plans and describe when each type might be used.

91) What is a SWOT analysis? What might a SWOT analysis of your educational institution reveal?

92) Explain the purpose of Michael Porter's five forces model. List the five factors that Porter identifies as major threats and describe their impacts.

93) According to Michael Porter, managers have two basic ways of increasing the value of an organization's product: differentiating the product or lowering the costs of making it. Define each strategy and analyze its impact on profits and the entry of new competitors into the industry.

94) List and describe the principal corporate-level strategies that managers can use to help a company maintain or grow its position in an industry or reorganize to stop a decline.

95) Differentiate global strategy from multidomestic strategy for a business wanting to compete abroad. Discuss the advantages and disadvantages of each strategy.

96) List and describe the different methods of international expansion. Arrange the methods according to the level of foreign involvement and investment and subsequent degree of risk starting from the least to the highest.

97) List the five steps involved in implementing an organizational strategy and explain why these steps are important for managers.

98) Scenario planning is one of the most widely used planning methods or techniques. Explain why it is so popular and how scenario planning improves the planning process.

99) Jason is pursuing a focused differentiation strategy for his startup business. How will technology (IT) affect his small company's competitiveness against larger and more powerful companies?

100) After several months of planning, a team of managers has defined new strategies for the organization and is ready for implementation. What additional planning activities will the managers likely face to implement the strategies?