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MGT 300 chapter 8

According to Henry Fayol an effective plan should have four qualities, namely unity, continuity, accuracy, and _____.

sustainability

*flexibility*

accountability

consistency

synergy

Though not formally written, an organization allows its employees to dress casually on Fridays. This is a(n) _____ of the organization.

*policy*

rule

standard operating procedure

standing plan

ethical code

In the Five Forces Model, the _____ that companies compete against one another for customers, the _____ the level of profits is likely to be for that industry.

*more; lower*

more; higher

less; lower

less; equal

more; equal

Selling the same standardized product and using the same basic marketing approach in each national market is called multidomestic strategy.
True
*False*
Top management’s decisions pertaining to the organization’s mission, overall strategy, and structure constitutes an organization’s _____.

*corporate-level plan*

divisional-level plan

functional-level plan

business-level plan

departmental-level plan

Entering a new industry or buying a company in a new industry that is not related in any way to an organization’s current businesses or industries is called unrelated diversification.
*True*
False
A written set of instructions which describes the series of actions that a manager should take in a specific situation is known as a:

policy.

*standard operating procedure.*

heuristic.

rolling plan.

rule.

A business-level plan details the short-term divisional goals that will allow the division to meet corporate goals.
True
*False*
The second and intermediate step in an organization’s planning process is to analyze the current situation and develop a strategy which is also called strategy formulation.
*True*
False
A specific action plan created to complete various aspects of a program is called a project.
*True*
False
Employees tend to be motivated and perform better if they are taken in by the vision of the top managers of their organizations. It therefore becomes essentials for top managers to develop a strong sense of _____.

goal orientation

strategic leadership

strategy formulation

business planning

organizational affluence

Synergy is obtained when the value created by two divisions operated separately and independently is greater than the value that would be created by two divisions cooperating.
True
False
Policies, rules, and standard operating procedures (SOPs) are all types of _____ plans.

single-use

functional

rolling

standing

scenario

In large organizations the functional level of management is also known as the _____ of management.

business level

corporate level

divisional level

departmental level

top level

In performing a SWOT analysis, a furniture company realized that the number of competing firms in its industry was increasing. The company would classify this as a(n) _____.

strength

weakness

opportunity

threat

advantage

A winery decides to manufacture its own packaging bottles instead of purchasing them from a bottle manufacturing company to reduces costs. The winery is employing a forward vertical integration strategy.
True
False
Two divisions of a company decide to use the same manufacturing facilities to capitalize on the organization’s excess capacity and reduce fixed costs. This is an example of _____.

concentration

rivalry

counteraction

adversity

synergy

Selling the same standardized product and using the same basic marketing approach in each national market is called _____.

unrelated diversification strategy

multidomestic strategy

national strategy

focused-differentiation strategy

global strategy

Cameo Ltd., a record label company, subsequently entered the airline industry to expand business. This example of a record label company entering the airline industry is an example of _____.

vertical integration

unrelated diversification

related diversification

horizontal integration

concentration

A beverage manufacturer enters the snack food business with the purchase of a popular potato chip company. This is an example of diversification.
*True*
False
The method of international expansion which presents managers with many threats and is the most expensive due to the high level of foreign investment is the method of international expansion through _____.

joint ventures

exporting and importing

licensing

franchising

*wholly owned subsidaries*

A group of managers analyze both, the internal strengths and weaknesses of their organization as well as the opportunities and threats of the external environment. What type of analysis is this?

Mission analysis

*SWOT analysis*

Functional analysis

Diversification analysis

Competition analysis

The ability of the CEO and top managers to convey a compelling vision of what they want the organization to achieve to their subordinates is called strategic leadership.
*True*
False
_____ is a plan of action to improve the ability of each of an organization’s functions to perform its task-specific activities in ways that add value to an organization’s goods and services.

Business-level strategy

Divisional-level strategy

Corporate-level strategy

*Departmental-level strategy*

Top-level strategy

Scenario planning is also known as contingency planning.
*True*
False
Corporate, business, and functional-level plans can all be applied over the same time horizon.
True
*False*
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 is referred to as:

licensing.

*franchising.*

strategic alliance.

exporting.

importing.

According to an organization’s SWOT analysis, which of the following would be a potential strength?

The organization has the potential to break the barriers of entry to a new market.

*The organization has the highest profit margin in its market.*

The organization’s research and development sector is on the decline.

The organization’s customer preferences are rapidly changing.

There is a lack of co-operation between the organization’s various divisions.

When establishing goals, setting a completion time acts as a demotivator.
True
*False*
The possibility of expanding into a global market is a potential weakness of an organization.
True
*False*
_____ is a corporate-level strategy that emphasizes on reinvesting a company’s profits in strengthening its competitive position in its current industry.

*Concentration on a single industry*

Forward vertical integration

Diversification

Backward vertical integration

International expansion

When considering vertical integration as a strategy to add value, managers must be careful because sometimes it may reduce a company’s ability to create value when the environment changes.
*True*
False
Holding specific individuals or groups responsible for the attainment of corporate, divisional, and functional goals is the last step in implementing strategy.
*True*
False
Plans that are developed to handle nonprogrammed decision making in unusual or one-of-a-kind situations are called _____.

standing plans

*single-use plans*

general plans

global plans

rolling plans

In large organizations the functional level of management is also known as the _____ of management.

business level

corporate level

divisional level

*departmental level*

top level

Entering a new business or industry to create a competitive advantage in one or more of an organization’s existing divisions or businesses is called _____.

*related diversification strategy*

international expansion strategy

low-cost strategy

concentration on a single industry

unrelated diversification strategy

The set of decisions that managers make to assist the organization in the attainment of its goals is called the strategy of the organization.
*True*
False
In a first of its kind, a multinational tire manufacturer, introduces a new range of premium tires that can handle extreme temperatures better at a higher price. The tires are designed keeping in mind the climatic conditions in the Middle East and products are marketed only in the Middle East. The manufacturer is pursuing ____.

*a focused differentiation strategy*

a focused low-cost strategy

a general differentiation strategy

a general low-cost strategy

both, a low-cost as well as a differentiation strategy

The duration over which a plan is intended to be applied or endured is called _____.

an event compass

goal duration

plan endurance

target visibility

*a time horizon*

In performing a SWOT analysis, a firm realized that its managers were untrained to handle the requirements of its new division. The firm would classify this as a(n) _____.

strength

*weakness*

opportunity

threat

advantage

A computer operating system software manufacturer invests its profits in creating newer versions of its operating system software to make best use of the continuous changes in computer hardware. This is called diversification.
True
*False*
Nokia has established production operations in foreign countries to sell its phones in those regions. The production operations perform as separate entities without any local direct involvement. These production operations are _____ of Nokia.

joint ventures

acquisitions

*wholly owned subsidiaries*

mergers

hostile takeovers

A standing plan that acts as a general guide to action that applies to the employees of an organization is called a _____.

belief

rule

*policy*

standard operating procedure

scenario

Though a company’s netbook prices are higher than other netbooks with the same configuration, the company offers features that are exclusive only to its netbooks. The company is following a differentiation strategy.
*True*
False
There is constant, fierce competition between telecommunication companies due to the continuous advances in mobile technology and a wide range of customers tastes. This is called _____.

ultracompetition

hypocompetition

supercompetition

*hypercompetition*

extracompetition

A business plan that is updated every year depending on the changes in the organization and in the external environment that have taken place in the previous year is known as a rolling plan.
*True*
False
Standing plans are useful in situations that are unusual or situations that are one-of-a-kind.
True
*False*
Because of the hostile external environment, AKY Consulting, treats its multiyear corporate-level plan as a _____ plan in order to maintain flexibility without losing sight of the need to plan for the long term.

fixed

general

standing

*rolling*

business

Implementing is a process managers use to identify and select appropriate goals and courses of action for an organization.
True
*False*
Focused low-cost strategy serves a major segment of the overall market and tries to be the lowest-cost organization in the entire market.
True
*False*
Which of the following will most likely be an opportunity according to an organization’s SWOT analysis?

*The company can probably takeover one of its bankrupt competitors.*

The sales of the organization’s products are the highest in the industry.

The organization is growing rapidly without any direction.

The government has passed a law which will increase labor costs.

The organization faces increased competition in its market.

The pharmaceutical industry is extremely dynamic. A company that releases a product to the general public with the intention of keeping prices high may see quick competition arising from other products made from different compounds that perform the same functions as the company’s product. According to the five forces model, this type of threat is called _____.

the level of rivalry among organizations in an industry

the potential for entry into an industry

the power of large suppliers

the power of large customers

*the threat of substitute products*

_____ are used in situations in which programmed decision making is appropriate.

Single-use plans

Functional plans

Rolling plans

Scenario plans

*Standing plans*

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