GM chap 1-2 quizzes

A large, multidivisional business has three levels in its hierarchy of strategy:

                                                            
A.   Environmental -- Corporate -- Functional.
B.   Industry -- Corporate --   Divisional.
C.   Corporate -- Business --   Functional.
D.   Business -- Divisional --   Functional.
E.   Environmental -- Enterprise -- Corporate.

IBM under CEO Louis Gerstner and his strategic decision to invest in services in1993, is an example of which mode of strategic decision-making?

A.  logical  incrementalism                                                               
B.   entrepreneurial
C.   None of these
D.   adaptive
E. planning

The phenomenon that describes corporations as evolving through relatively long periods of stability punctuated by relatively short bursts of fundamental change is known as:

A.   revolution.
B.   logical incrementalism.
C.   discontinuity.
D.  equilibrium.                                                                      
E. punctuated equilibrium.

Punctuated equilibrium describes organizations as evolving through relatively long periods of stability punctuated by relatively short bursts of fundamental change.
True
False

Ina survey of 50 corporations, which of the following was rated as a benefits of strategic management?
                                                            
A.   lower employee turnover
B.   higher levels of employee   motivation
C.   improved productivity
D. clearer sense of vision for the firm
E.   higher levels of job satisfaction

The time horizon involved with regard to basic financial planning is usually:
A.   more than five years.
B.   less than one month.
C.   more than three years.
D.   one quarter.
E.   one year.

Which of the following is NOT a characteristic of strategic decisions as mentioned in the text?

A.   consequential
B.   directive
C.   continuous                                             E. require commitment of substantial   resources
D.   rare

Population ecology is a theory that proposes organizations can and do adapt to change by imitating other successful organizations.

A.   True                                                                      
B. False

The currency used to integrate the monetary systems of the European Union (EU) is called the

A.   peso.
B.   dollar.                                                    C. euro.
D.   franc.
E.   pound.

The corporate mission is best described by which one of the following?

A.   A description of the activities   carried out by the organization.                                     B. The purpose or reason for the   corporation's existence.
C.   A description of top management's   responsibilities.
D.   A statement of corporate   objectives.
E.   A statement of what the   organization would like to become.

A goal differs from an objective because it

A.   provides a time horizon.
B.   is quantified.
C.   is clearly specified.
D.   specifies measurable results.
E. is open-ended.

Which of the following is NOT one the four triggering events listed in the text that are the stimulus for a strategic change?

A.   intervention by the organization's   bank B.   annual strategic planning   conference
C.   threat of a takeover
D.  new CEO                                                          
E. awareness by management of decreased profitability

Research done by Henry Mintzberg suggests that strategy formulation
A. is typically an irregular and a   discontinuous process.
B.   should review after specific   interval of time to make sure it is still applicable.
C.   should be followed unswervingly to   ensure success of the plan.
D.   that organizations find they must   make significant yearly changes.
E.   is merely a checklist of actions   following a logical process.

A business strategy may include competitive or cooperative strategies
A true
B false

A hierarchy of strategy emphasizes   the need for the three levels of strategy to complement and support  one another
                                                                                                                                                          A.   True                                        
B.   False

A program is:

A. A statement of the activities needed to accomplish a single-use plan.
B.   A system of sequential steps.         
C.   None of these
D.   a detailed cost statement in terms   of dollars.
E.   The process by which strategies   and policies are put into action.

Which one of the following is included in the firm's societal environment?

A.   competitors                                           B.   economic forces
C.   resources
D.   governments
E.   special interest groups

Research indicates that a broad mission statement may be best in a turbulent environment.
A. True
B. False

All of the following reflect categories of organizational risk as a result ofclimate change EXCEPT

A. sustainability risk.
B.   regulatory risk.
C.   supply chain risk.          
D.   reputational risk.
E.   litigation risk.

As more industries become global, strategic management is becoming less important in positioning a company for long-term competitive advantage.
A true
B False

The type of strategy which describes a company's overall direction in terms of its general attitude toward growth and the management of its various businesses and product lines is.

A.   operational.
B.   business.
C.   functional.
D. corporate.
E.  product.                                                             

A budget is a statement of a corporation's programs in dollar terms. Which is NOT true of the budgetary function?

A.   It is used in planning and   control.           B. It serves as a detailed plan of   strategy in action.
C.   Only one budget is necessary to   capture all programs.
D.   It details the impact on the   firm's future financial situation.
E.   It is used as a means of measuring   success based on a certain criteria.

Which one of the following is included in the firm's task environment?

A.   political-legal forces
B. economic factors
C.   sociocultural factors    
D.   technological factors
E.   stockholders

Which theory proposes that once an organization is successfully established in a particular environmental niche, it is unable to adapt to changing conditions?

A.   citizenship
B.   organizational learning
C. population ecology
D.   institution
E.   strategic choice

Which of the following statements is not true of a strategic inflection point?

A.   The term was coined by Andy Grove,   past CEO of Intel Corporation                         B. This represents what happens to a   business when a major change takes place due to the introduction of new   technology
C.   This represents what happens to a   business when a major change takes place due to a change in customers' values   or a change in what customers prefer
D.   This represents what happens to a   business when a major change takes place due to a different regulatory   environment
E.   A new CEO is an example of a   strategic inflection point.

More than ________ of outside   directors surveyed that they had been named as part of a lawsuit against the   corporation
A.   70%
B.   60%
C.   40%
D.   80%
E.   50%

The average large, publicly-held U.S. corporation has around.

A.   19 directors.
B.    7 directors.                 
C.   10 directors.
D.   25 directors.
E.   30 directors.

In implementing the Sarbanes-Oxley Act, the SEC required in 2003 that a company disclose

A.   the number of insiders on their PR   committee.                                                      B. if it has adopted a code of ethics   that applied to the CEO and the CFO.
C.   the CEO's pay.
D.   the CFO's pay.
E.   All of these

According to ________ theory, _______ directors tend to identify with the corporation.

A.   corporate governance; inside               
B.   agency, inside
C.   corporate governance; affiliated
D.   stewardship; outside
E.   stewardship; inside

The role of the board of directors in the strategic management of the corporation is likely to be less active in the future.
A True
B False

Which of the following is NOT a task of the board of directors in strategic management?

A.   to monitor                                             B.   to implement
C.   to influence
D.   to initiate and determine
E.   to evaluate

A highly involved board does all of the following EXCEPT:

A.   takes their tasks of initiating   and determining strategy very seriously.      
B.   tends to be very active.
C.   keeps management alert.
D. manage the every day operations of   the organization.
E.   provides advice when necessary.

________theory argues that senior executives over time tend to view the corporation as an extension of themselves.

A.   Motivation                       
B.   Agency
C.   Goal setting
D.   Population ecology
E.   Stewardship

A direct interlocking directorate occurs when two corporations have directors who also serve on the board of a third firm, such as a bank.
A True
B False

Research reveals that the likelihood of a firm engaging in illegal behavior or being sued declines

A.   with the addition of insiders on   the board.     
B. with the addition of outsiders on
C.   with a larger board
the board.
D.   with a smaller board.
E.   with a well-compensated board.

A staggered board

A.   increases the chances of a hostile   takeover.                           
B.   makes it easier for shareholders   to curb a CEO's power.
C.   is seen in less than 50% of U.S.   boards.  
D. has only a portion of the board   stand for election each year.
E.   All of these

The U.S. Clayton Act and Banking Act of 1933

A.   prohibit acts or contracts tending   to create a monopoly.
B.   promote interlocking directorates   by U.S. companies to foster better communications and working relationships.
C.   prevent unfair practices in   interstate commerce.
D.   promote racial parity on the board   of directors.                        
E. prohibit interlocking directorates   by U.S. companies competing in the same industry.

The confidence levels of executive leaders may blind them to information that is contrary to a decided course of action; this may help to understand why over confident CEO's are more likely to conduct mergers and acquisitions.
A true
B False

Which of the following is a trend in corporate governance?

A.   Boards are getting less involved   in shaping corporate strategy.
B.   Shareholders are demanding that   directors and top managers own less stock in the company.                                              C. Boards are establishing mandatory   retirement ages for board members.
D.   Boards are getting larger.
E.   Boards are looking for fewer   members with international experience.

Under what circumstances does an INDIRECT interlocking directorate exist?

A.   When both management and the board   establish corporate strategic management.
B.   When a corporation's employees are   included on its board.
C.   When one or more individuals on   one board also serve on a board of a second firm. D.   When all board members are also   employed by the corporation.                             
E. When two corporations have   directors who serve on the board of a third firm.

Board members who are most likely to face a conflict of interest are known as

A.   family directors.
B.   affiliated directors.
C.   management directors.
D.   interlocked directors.
E.   retired directors.              

Board members who are not employed by the corporation, but handle the legal or insurance needs of the firm and are thus not a true "outsider" are what kind of directors?

A. affiliated directors
B.   interlocked directors
C.   retired directors
D.   management directors
E.   family directors

 The percentage of CEOs of     British corporations who also serve as chairman of the board is                                          

A.   5%.
B.  20%.                                                                       C.  46%.
D.   68%.
E.   over 90%.

According to the text, most publicly owned large corporations today tend to have boards with what degree of involvement in the strategic management process?

A.   nominal to active
B.   passive to minimal                            
C. minimal to nominal
D.   active to catalyst
E.   rubber stamp type

Which of the following is NOT a key characteristic of transformational executive leaders?

A.   The CEO presents a role for others   to identify with and to follow.
B.   The CEO demonstrates confidence in   the employees' abilities to meet the expressed high standards.               
C.   The CEO articulates a strategic   vision for the corporation.
D. The CEO energizes the board to   formulate strategy.
E.   The CEO communicates high   performance standards for all employees.

Who was considered one of the first green business executives?

A.   Brian Roberts
B.   Bob Nardelli                             
C.   Walt Disney
D.   Louis Gerstner
E. Anita Roddick

The requirements of a board of directors vary significantly by country and by state; however, there is a developing consensus as to what the major responsibilities should be. Which of the following is NOT one of the responsibilities?

A.   Setting corporate strategy,   overall direction, mission or vision.
B. Becoming directly involved in   managerial decisions.
C.   Reviewing and approving the use of   resources.
D.   Controlling, monitoring, or   supervising top management.                   
E.   Hiring and firing the CEO and top   management.

The role of the board of directors in the strategic management of the corporation is likely to
 
A.   be nonexistent as planning   departments take over.
B. be more active in the future.
C.   remain the same.
D.   be less active in the future.
E.   shift more toward managing daily   operations.

The majority of outside directors are active or retired CEO's and COO's of other corporations.

A.   True
B.   False

All of the following criteria reflect survey findings of the characteristics of a good director EXCEPT

A.   willing to challenge management   when necessary.
B.   understands the firm's key   technologies and processes.
C.   expertise on global business   issues.
D. willing to always agree with   executive decisions.
E.   available outside meetings to   advise management.