Final Exam MGT- 4620 Strategic ManagementMultiple Choice Questions 1. A firm pursuing market development would likely increase investments in:A. Product developmentB. Basic R&DC. Process developmentD. A new sales forceE. Applications development 2. Which of the following organizations is most likely to actively seek growth?A. Family owned businessesB. Businesses which are content with their current market shareC. Defender firmsD. Reactor firmsE. Prospector firms 3. Firms often remain in a low-growth industry in which efforts to increase sales cost more than they are worth if the industry:A. Has low profitsB. Has high exit barriersC. Has high entry barriersD. Has dynamic equilibriumE. Is unsegmented 4. Strategy formulation responsibilities at the business level include all of the following except: A. Establishment and communication of goalsB. Identification of strengths and weaknessesC. Identification of opportunities and threatsD. Management of the corporate portfolioE. Establishment of a strategic posture 5. Which of the following is an accurate statement about economies of scale?A. Production costs per unit are less in a large facility than in a small facilityB. The more products a company makes, the lower its variable production costsC. Economies of scale are identical to throughputD. Doubling factory size typically doubles fixed costsE. Companies with economies of scale have high capacity utilization 6. A learning curve implies:A. An employee can easily learn to do several different jobs within a firmB. Employees learn to do jobs more efficiently with repetitionC. Employees who are slow to learn new tasks will require additional training time D. The time required to complete a task will decrease as a predictable function of the number of times the task is repeatedE. B and D are both correct 7. Which of the following is an advantage of pursuing cost leadership?A. Sales always increase with increasing amounts of outputB. Loss of sales does not reduce scale benefitsC. The strategy easily accommodates changes in the marketD. Firms invest heavily in differentiating their productsE. A firm may charge the same price as its competitors but make a higher profit 8. Which of the following typically is a corporate level strategy formulation responsibility?A. Establishment of short term operating goalsB. Choice of generic strategy for each business unitC. Selection of businesses in which to competeD. Direct supervision of research and development programsE. None of the above 9. As corporate-level strategies develop, any of the following strategies might be expected to follow a concentration strategy except: A. Vertical integrationB. Diversification of marketsC. Diversification of products/servicesD. Diversification of resource conversion processesE. Restructuring10. Which of the following is not considered a corporate-level strategy?A. Focus through differentiation.B. ConcentrationC. Related diversificationD. Unrelated diversification E. None of the above. These are all corporate-level strategies.11. Which of the following is strength of a concentration strategy?A. Product obsolescence will rarely affect the firmB. Executives can develop in-depth knowledge of the businessC. Industry maturity will rarely affect the firmD. Firms pursuing this strategy are rarely acquired by another firmE. Bankruptcy risk is minimal12. Which of the following is a weakness of a concentration strategy?A. The organization cannot develop a distinctive competenceB. Organizational resources are severely strainedC. External stakeholders are easily confused by the firm’s strategic agendaD. There is high ambiguity regarding strategic directionE. The strategy is risky when the environment is unstable13. According to the theory of transaction cost economics, a market is likely to fail if:A. There are a large number of suppliersB. All parties to the transaction have the same level of knowledgeC. The future is highly uncertainD. The future is highly certainE. Assets may be used to produce a variety of products or services14. Related diversification differs from unrelated diversification in which of the following ways?A. Related diversification is connected to the organization’s dominant business; unrelated diversification is notB. Unrelated diversification is connected to the organization’s dominant business; related diversification is notC. Single business firms use related diversification and never use unrelated diversificationD. Single business firms use unrelated diversification and never use related diversificationE. A firm that uses related diversification always uses vertical integration; a firm that uses unrelated diversification never uses vertical integration15. When an organization can use the same physical resources for multiple purposes, it is taking advantage of:A. Intangible relatednessB. Tangible relatednessC. Limited scopeD. Dominant industry relationshipsE. Goodwill16. Which types of strategies are used to implement the growth and competitive strategies of the firm?A. Focus strategiesB. Generic strategiesC. Functional strategiesD. Corporate strategiesE. Indirect strategies17. Which functional area is largely responsible for spanning the boundary of the organization to interact with customers?A. MarketingB. FinanceC. OperationsD. Information systemsE. Human resources18. In most organizations, research and development strategy deals with all of the following except:A. Product developmentB. Applications developmentC. Basic researchD. Human resource developmentE. Process development 19. The _____________ addresses the plan for aligning product and service operations with business strategies. A. Information systems strategyB. R&D strategyC. Operations strategyD. Marketing strategyE. Human resources strategy20. Well-developed functional strategies should have all of the following characteristics except:A. They are inexpensive to implementB. Decisions made within each functional area should represent a consistent patternC. They should be consistent with the strategies of the business.D. Decisions made in one functional area should be consistent with decisions made in other functional areas.E. These are all true. There is no exception.21. If a firm is very decentralized and has a web of independent offices in each region, with little or no formal hierarchy, which business-level structure is it likely to have?A. FunctionalB. Product/marketC. Project matrixD. NetworkE. Manufacturing22. Which business-level structure is organized around outputs and has a high level of centralization?A. FunctionalB. Product/marketC. Project matrixD. NetworkE. TQM23. A strategic control system helps managers to assess the relevance of the organization’s strategy:A. To its profitabilityB. To its progress in the accomplishment of its goalsC. To the needs of its employees D. In order to specify product line extensionsE. To its competitors’ strategies24. When managers are trying to anticipate changes in the internal and external environments, they are using:A. Feedforward controlB. Vertical controlC. Feedback controlD. Horizontal controlE. Integrative control25. Which type of control provides managers with information concerning outcomes from organizational activities?A. Feedforward controlB. Vertical controlC. Feedback controlD. Horizontal controlE. Integrative control26. Common feedback control systems include all of the following except:A. Strategic surveillanceB. Ratio analysisC. Financial auditsD. BudgetsE. Social audits27. Feedforward control systems are especially important because of: A. Environmental discontinuitiesB. Stability in the environmentC. High profitsD. The decreasing role of government regulation in the world economyE. Social audits28. A control system that consists of policies and guidelines to guide the behavior of organizational members is:A. Bureaucratic controlB. Output controlC. Clan controlD. Process controlE. Human resources systems29. A control system that is based on socialization of organizational members is:A. Bureaucratic controlB. Output controlC. Clan controlD. Process controlE. Human resources systems30. Mental models:A. Are vali
d as long as the premises that underlie them remain the sameB. Are derived from experiencesC. May prevent executives from recognizing the need for changeD. All of the aboveE. A and B are correct but not C

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