Modern Management 13th Edition Certo Test Bank
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Modern Management, 13e (Certo/Certo)
Chapter 9 Strategic Planning: Strategies, Tactics, and Competitive Dynamics
1) The commitment principle is a management guideline that advises managers to totally commit themselves to strategic planning.
Answer: FALSE
Page Ref: 197
Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies
Objective: 1
Difficulty: Easy
Classification: Conceptual
2) Strategy is the end result of strategic planning.
Answer: TRUE
Page Ref: 197
Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies
Objective: 1
Difficulty: Easy
Classification: Conceptual
3) Strategic management is the process of ensuring an organization possesses and benefits from the use of an appropriate organizational strategy.
Answer: TRUE
Page Ref: 197-198
Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies
Objective: 2
Difficulty: Easy
Classification: Conceptual
4) In general, the strategic management process is thought to consist of sequential and continuing steps.
Answer: TRUE
Page Ref: 197-198
Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies
Objective: 2
Difficulty: Easy
Classification: Conceptual
Copyright © 2014 Pearson Education, Inc.
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5) The first step in the strategic management process is the establishment of organizational direction.
Answer: FALSE
Page Ref: 198
Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies
Objective: 2
Difficulty: Easy
Classification: Conceptual
6) Managers only perform environmental analysis to help them understand what is happening outside their organization.
Answer: FALSE
Page Ref: 198-200
Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies
Objective: 3
Difficulty: Easy
Classification: Conceptual
7) The general environment of an organization's external environment contains international, labor, customer, competitor, and supplier components.
Answer: FALSE
Page Ref: 199-200
Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies
Objective: 3
Difficulty: Easy
Classification: Conceptual
8) Demographics are the statistical characteristics of a population.
Answer: TRUE
Page Ref: 200
Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies
Objective: 3
Difficulty: Easy
Classification: Conceptual
9) The legal component of the general environment is related to government affairs.
Answer: FALSE
Page Ref: 200
Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies
Objective: 3
Difficulty: Easy
Classification: Conceptual
Copyright © 2014 Pearson Education, Inc.
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10) Motivations, status symbols, and attitudes of the other country are all important aspects of the international component of the organization's operating environment.
Answer: TRUE
Page Ref: 201
Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies
Objective: 3
Difficulty: Easy
Classification: Conceptual
11) "In what kind of environment does the organization now exist?" is one of the four basic questions required for critical question analysis.
Answer: TRUE
Page Ref: 204
Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies
AACSB: Reflective Thinking Skills
Objective: 4
Difficulty: Easy
Classification: Conceptual
12) SWOT is an acronym for Social Welfare Operating Test.
Answer: FALSE
Page Ref: 204
Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies
Objective: 4
Difficulty: Easy
Classification: Conceptual
13) The GE Multifactor Portfolio Matrix was designed to be more complete than the BCG Growth-Share Matrix.
Answer: TRUE
Page Ref: 206
Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies
Objective: 4
Difficulty: Easy
Classification: Conceptual
Copyright © 2014 Pearson Education, Inc.
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14) According to the GE Multifactor Portfolio Matrix, businesses falling in cells that form a diagonal from lower left to upper right are the strongest and the ones the company should invest in and help to grow.
Answer: FALSE
Page Ref: 206
Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies
Objective: 4
Difficulty: Easy
Classification: Conceptual
15) Strategic implementation is the last step of the strategic management process.
Answer: FALSE
Page Ref: 208
Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies
Objective: 5
Difficulty: Easy
Classification: Conceptual
16) Tactical planning is long-range planning that emphasizes the current operations of various parts of the organization.
Answer: FALSE
Page Ref: 208-209
Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies
AACSB: Reflective Thinking Skills
Objective: 6
Difficulty: Easy
Classification: Conceptual
17) Because tactical plans are based primarily on a prediction of the future, and strategic plans are based on known circumstances that exist within the organization, tactical plans are generally less detailed than strategic plans.
Answer: FALSE
Page Ref: 208-209
Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies
Objective: 6
Difficulty: Easy
Classification: Conceptual
Copyright © 2014 Pearson Education, Inc.
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18) Because strategic planning focuses on the long term and tactical planning on the short term, strategic plans cover a relatively long period of time whereas tactical plans cover a relatively short period of time.
Answer: TRUE
Page Ref: 209
Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies
AACSB: Reflective Thinking Skills
Objective: 6
Difficulty: Easy
Classification: Conceptual
19) Competitor motivation refers to the incentives that an organization has to take action.
Answer: TRUE
Page Ref: 210-211
Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies
Objective: 7
Difficulty: Easy
Classification: Conceptual
20) Competitor capability refers to a firm's ability to undertake an action.
Answer: TRUE
Page Ref: 211
Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies
Objective: 7
Difficulty: Easy
Classification: Conceptual
21) Long-range planning that focuses on the organization as a whole is ________.
A) operational planning
B) organizational planning
C) strategic planning
D) tactical planning
E) managerial planning
Answer: C
Page Ref: 197
Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies
Objective: 1
Difficulty: Easy
Classification: Conceptual
Copyright © 2014 Pearson Education, Inc.
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22) In strategic planning, managers consider the organization as a total unit and ask themselves what must be done in the long term, which is usually ________.
A) three to five years into the future
B) in the coming year
C) one to two years into the future
D) five to ten years from now
E) five to twenty years from now
Answer: A
Page Ref: 197
Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies
Objective: 1
Difficulty: Easy
Classification: Conceptual
23) A management guideline that advises managers to commit funds for planning only if in the foreseeable future they can anticipate a return on planning expenses as a result of the long-range planning analysis is termed ________.
A) strategic planning
B) the commitment principle
C) organizational planning
D) tactical planning
E) the principle of the objective
Answer: B
Page Ref: 197
Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies
Objective: 1
Difficulty: Easy
Classification: Conceptual
24) A broad and general plan developed to reach long-term organizational objectives is a(n)
A) tactic
B) scenario
C) operational plan
D) organizational goal
E) strategy
Answer: E
Page Ref: 197
Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies
Objective: 1
Difficulty: Easy
Classification: Conceptual
Copyright © 2014 Pearson Education, Inc.
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________.
25) Which of the following is true about strategy?
A) Strategy is a general plan developed to reach short-term goals without any planning.
B) Organizational strategy focuses only on the marketing and financial aspects of a business.
C) Smaller organizations are more precise than large organizations in developing organizational strategy in order to meet their goals sooner.
D) Strategy is actually the end result of strategic planning.
E) Research and development are not a part of an organization's strategy.
Answer: D
Page Ref: 197
Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies
Objective: 1
Difficulty: Easy
Classification: Conceptual
26) Axis Cars is an automobile company based out of Delaware. They need to follow an organizational strategy to regain the market share they recently lost to Toyota. Which of the following strategies will accomplish this objective?
A) They should increase people efficiency.
B) They should resize and downsize present models.
C) They should increase machine efficiency.
D) They should modernize the car batteries.
E) They should merge with another top-selling automobile brand.
Answer: B
Page Ref: 197
Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies
AACSB: Analytic Skills
Objective: 1
Difficulty: Moderate
Classification: Application
Copyright © 2014 Pearson Education, Inc.
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27) Pasta Central, a fast-food chain, has realized that if it wants to beat its leading competitor and improve market share, it must improve its productivity. Which of the following strategies is most likely to help Pasta Central to achieve this objective?
A) reassess their market
B) downsize
C) decrease machine efficiency
D) develop valuable real estate holdings
E) increase people efficiency
Answer: E
Page Ref: 197
Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies
AACSB: Analytic Skills
Objective: 1
Difficulty: Moderate
Classification: Application
28) ________ is the process of ensuring that an organization possesses and benefits from the use of an appropriate organizational strategy.
A) Strategic planning
B) Strategy visualization
C) Decision making
D) Strategic management
E) Integrated business planning
Answer: D
Page Ref: 197-198
Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies
Objective: 2
Difficulty: Easy
Classification: Conceptual
29) The last step in the strategic management process is ________.
A) establishment of an organizational direction
B) environmental analysis
C) strategy formulation
D) strategy implementation
E) strategic control
Answer: E
Page Ref: 198, 208
Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies
Objective: 2
Difficulty: Easy
Classification: Conceptual
Copyright © 2014 Pearson Education, Inc.
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30) The first step of strategic management is designed to ________.
A) establish an organizational direction
B) formulate strategy
C) study the organizational environment
D) advise managers to commit funds for planning
E) control the environment
Answer: C
Page Ref: 198-199
Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies
Objective: 3
Difficulty: Moderate
Classification: Conceptual
31) The level of an organization's external environment that contains components having broad long-term implications for managing the organization is the ________.
A) general environment
B) financial environment
C) demographic environment
D) internal environment
E) operating environment
Answer: A
Page Ref: 199
Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies
Objective: 3
Difficulty: Easy
Classification: Conceptual
32) The ________ component is that part of the general environment that indicates how resources are being distributed and used within the environment.
A) social
B) economic
C) political
D) international
E) legal
Answer: B
Page Ref: 199-200
Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies
Objective: 3
Difficulty: Easy
Classification: Conceptual
Copyright © 2014 Pearson Education, Inc.
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33) The relative degrees of worth that society places on the way in which it exists and functions are ________.
A) political ideologies
B) economic conditions
C) demographics
D) social values
E) environmental factors
Answer: D
Page Ref: 200
Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies
Objective: 3
Difficulty: Easy
Classification: Conceptual
34) Which of the following is true about social values?
A) Social values are the statistical characteristics of a population.
B) It includes changes in numbers of people among various population segments.
C) Changes in social values can influence the reception of goods and services within the organization's environment.
D) Social values are helpful for developing a strategy aimed at recruiting new employees to fill positions within an organization.
E) The relative degrees of worth that society places on the ways in which it functions can change dramatically over time.
Answer: E
Page Ref: 200
Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies
Objective: 3
Difficulty: Difficult
Classification: Conceptual
35) Lobbying efforts by interest groups and progress on the passage of laws are examples of the ________ component of the general environment.
A) social
B) political
C) legal
D) technological
E) international
Answer: B
Page Ref: 200
Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies
Objective: 3
Difficulty: Easy
Classification: Conceptual
Copyright © 2014 Pearson Education, Inc.
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36) Which of the following components includes new approaches to producing goods and services?
A) the technology component
B) the political component
C) the labor component
D) the legal component
E) the productive component
Answer: A
Page Ref: 200
Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies
Objective: 3
Difficulty: Easy
Classification: Conceptual
37) The level of an organization's external environment that contains components normally having relatively specific and immediate implications for managing the organization is the ________.
A) demographic environment
B) general environment
C) industry environment
D) international environment
E) internal environment
Answer: C
Page Ref: 202
Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies
Objective: 3
Difficulty: Easy
Classification: Conceptual
38) Porter's model emphasizes ________.
A) strengths, weaknesses, opportunities, and threats
B) stars, dogs, cash cows, and question marks
C) competitive forces in an industry
D) business strength and industry attractiveness
E) environmental analysis
Answer: C
Page Ref: 202
Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies
Objective: 3
Difficulty: Easy
Classification: Conceptual
Copyright © 2014 Pearson Education, Inc.
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39) According to Porter, threat of new entrants refers to ________.
A) the power that customers have over the firms
B) the power that suppliers have over the firms
C) the extent to which customers may use services from another industry instead of the focal industry
D) the ability of new firms to enter an industry
E) the intensity of the rules of an organization
Answer: D
Page Ref: 202
Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies
Objective: 3
Difficulty: Easy
Classification: Conceptual
40) According to Porter, ________ refers to the power that customers have over the firms operating in an industry.
A) the threat of new entrants
B) buyer power
C) supplier power
D) the threat of substitute products
E) intensity of rivalry
Answer: B
Page Ref: 202
Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies
Objective: 3
Difficulty: Easy
Classification: Conceptual
41) Which level of the organization's environment exists inside the organization and normally has immediate and specific implications for managing the organization?
A) the general environment
B) the internal environment
C) the operating environment
D) the external environment
E) the political environment
Answer: B
Page Ref: 202
Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies
Objective: 3
Difficulty: Easy
Classification: Conceptual
Copyright © 2014 Pearson Education, Inc.
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42) ________ is the purpose for which and the reason why an organization exists.
A) Organizational objective
B) Organizational strategy
C) Organizational mission
D) Organizational policy
E) Organizational rule
Answer: C
Page Ref: 203
Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies
Objective: 3
Difficulty: Easy
Classification: Conceptual
43) The document that is written by management and describes and explains what the purpose for which the organization exists is the ________.
A) mission statement
B) strategic plan
C) operating plan
D) annual budget
E) vision statement
Answer: A
Page Ref: 203
Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies
AACSB: Reflective Thinking Skills
Objective: 3
Difficulty: Easy
Classification: Conceptual
44) Which of the following statements accurately reflects the relationship between the mission and the objectives?
A) The mission statement reflects and flows naturally from the objectives.
B) The objectives reflect and flow naturally from the mission.
C) There is no direct relationship between the mission and the objectives.
D) The mission statement stands alone and has no influence on the objectives.
E) The mission and the objectives influence each other.
Answer: B
Page Ref: 203
Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies
Objective: 3
Difficulty: Easy
Classification: Conceptual
Copyright © 2014 Pearson Education, Inc.
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45) ________ is the process of determining appropriate courses of action for achieving organizational objectives and thereby accomplishing organizational purpose.
A) Establishment of organizational direction
B) Strategy implementation
C) Strategy control
D) Strategy formulation
E) Environmental analysis
Answer: D
Page Ref: 203-204
Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies
Objective: 3
Difficulty: Easy
Classification: Conceptual
46) The answer to which of the following critical questions indicates whether the organization is progressing satisfactorily or not?
A) What are the purposes and objectives of the organization?
B) Where is the organization presently going?
C) In what kind of environment does the organization now exist?
D) What can be done to better achieve organizational goals in the future?
E) What does our SWOT analysis show?
Answer: B
Page Ref: 204
Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies
Objective: 4
Difficulty: Easy
Classification: Conceptual
47) Which of the following is true about a star SBU?
A) Star SBUs may barely support themselves; in some cases, they actually drain off cash resources generated by other SBUs.
B) Star SBUs provide the organization with large amounts of cash because their market is not growing significantly.
C) An SBU that is a star has a small share of a high-growth market.
D) An SBU that is a star has a high share of a high-growth market and typically needs large amounts of cash to support rapid and significant growth.
E) Because the market of star SBUs is not growing significantly, the cash is generally used to meet the financial demands of the organization in other areas.
Answer: D
Page Ref: 205
Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies
Objective: 5
Difficulty: Easy
Classification: Conceptual
Copyright © 2014 Pearson Education, Inc.
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