90 test bank for strategic management planning for domestic and global competition 13th edition pearce II

90 Test Bank for Strategic Management Planning for
Domestic and Global Competition 13th Edition Pearce
II
(p. 26) A firm’s _____ is tied inextricably to its survival and profitability.
1.

A. growth

2.

B. prominence

3.

C. fame

4.

D. salability

(p. 26) All of these are economic goals that guide the strategic direction of
organizations EXCEPT
1.

A. Survival

2.

B. Market share

3.

C. Profitability

4.

D. Growth

(p. 24) When should a company redefine its mission?
1.

A. When the competition have failed

2.

B. When the board meets with top management annually

3.

4.

C. When the business is forced by competitive pressures to alter its products of
market
D. When the government requires the business to redefine it

(p. 23) Characteristically, the company mission is a statement of all of
these EXCEPT
1.

A. Attitudes

2.

B. Outlooks

3.

C. Measurable targets


4.

D. Orientation

(p. 29) Mission statements should reflect the ____ expectations.
1.

A. public’s

2.

B. managers’

3.

C. stockholders’

4.

D. Board of Directors’

(p. 24) In deriving a mission statement, which of the following should be
included?
1.

A. Tax advantages

2.

B. Secondary markets to be served

3.

C. Concern for survival through growth

4.

D. Employee rules and policies

(p. 24) The process of defining the company mission for a specific
business can be best understood by
1.

A. Thinking about the business at its inception

2.

B. Looking at the industry attributes

3.

C. Analyzing the regulatory requirements of what to include in a mission

4.

D. Analyzing the most successful competitors in the marketplace

(p. 26) Profitability is the ______ goal of a business.
1.

A. Mainstay

2.

B. Least important

3.

C. Non economic

4.

D. Subjective


(p. 28) Given that managers implicitly accept a general, unwritten, yet
pervasive code of behavior that govern business actions, the _____ vary
little from one firm to another.
1.

A. Philosophies

2.

B. Visions

3.

C. Missions

4.

D. Self-concepts

(p. 26) Growth means change, and _____ change is required in a _____
business environment.
1.

A. proactive, dynamic

2.

B. reactive, dynamic

3.

C. proactive, stable

4.

D. reactive, uncertain

(p. 26) A firm will be incapable of satisfying its stakeholders' claims, if it
does NOT insure:
1.

A. Growth

2.

B. Survival

3.

C. Profitability

4.

D. Competitive dominance

(p. 23) The company mission reflects the firm's
1.

A. Vision

2.

B. Self-concept

3.

C. Corporate governance

4.

D. Agency costs

(p. 23) Which of these is NOT true about the company mission?


1.

A. It embodies the business philosophy of the firm's strategic decision makers

2.

B. It implies the image the firm seeks to project

3.

C. It provides specific strategies for front-line managers

4.

D. It reflects the firm's self-concept

(p. 26) ______ is the mainstay goal of a business.
1.

A. Profitability

2.

B. Products

3.

C. Service

4.

D. Growth

(p. 26) Basing decisions on a short-term concern for profitability would
lead to
1.

A. A reduced market share

2.

B. A strategic myopia

3.

C. A competitive warfare

4.

D. A governmental lawsuit

(p. 23) The company mission identifies the
1.

A. Key competitors in the marketplace

2.

B. Board of directors' responsibility towards the owners

3.

C. Specific strategies for gaining market share

4.

D. Scope of its operations in product and market firms

(p. 24) Three indispensable components of the mission statements are:
1.

A. Basic product or service, primary markets and principal technology

2.

B. Self-concept, managerial philosophy and public image

3.

C. Concern for survival through growth, self-concept and primary markets

4.

D. Economic goals, core competencies and primary and secondary customers

(p. 23) Which external body requires that a company have a mission
statement? of
1.

A. None

2.

B. SEC

3.

C. Justice Department

4.

D. IRS

(p. 26) When the survival goal is taken for granted, therefore neglected in
strategic decision making, the firm's focus shifts to
1.

A. Long run

2.

B. Intermediate run

3.

C. Direction-less activities

4.

D. Short run

(p. 23) The unique purpose that sets a company apart from others of its
type and identifies the scope of its operations. In product, market and
technology terms is defined as the
1.

A. Adverse selection

2.

B. Company mission

3.

C. Moral hazard problem

4.

D. Vision statement

(p. 24) The combination of which of these factors describe the company's
business activities?
1.

A. Basic product or service, primary markets and principal technology

2.

B. Self-concept, managerial philosophy and public image

3.

C. Concern for survival through growth, self-concept and primary markets


4.

D. Economic goals, core competencies and primary and secondary customers

(p. 24) In general terms, the mission statement addresses all of the
following questions EXCEPT
1.
2.

A. What are our economic goals?
B. What is our operating philosophy in terms of quality, company image and selfconcept?

3.

C. What customers do and can we serve?

4.

D. Who are our competitors and how can we collaborate with them?

(p. 24) In general terms, which of the following questions is addressed by
the mission statement?
1.

A. How should we price our products?

2.

B. What are our economic goals?

3.

C. Which employees should we hire?

4.

D. What leverage structure should we follow?

(p. 23) A revised mission will contain _____ components as the original.
1.

A. the same

2.

B. more

3.

C. fewer

4.

D. different

(p. 23) The mission reflects the:
1.

A. Values of the decision makers

2.

B. Goals of the decision makers

3.

C. Experiences of the decision makers

4.

D. Policies of firm


(p. 26) Growth means:
1.

A. Change

2.

B. Stability

3.

C. Effectiveness

4.

D. Efficiency

(p. 24) Which one of the following is NOT an outcome designed to be
accomplished by a company mission?
1.

A. To provide a unifying purpose for the organization

2.

B. To provide a basis for strategic objective setting

3.

C. To provide a basis for decision making

4.

D. To reward stockholders

(p. 30) Which of the following statements about public image is FALSE?
1.

2.

A. Negative public image often prompts firms to reemphasize the beneficial
aspects of their mission
B. The image the company seeks to project should be reflected in its mission

3.

C. Firms always address the question of their public image in an intermittent
fashion

4.

D. Concern for public image is an important components of a firm's mission

(p. 27) The company's philosophy is sometimes also called the:
1.

A. Company creed

2.

B. Corporate profile

3.

C. Corporate motto

4.

D. Corporate symbol


(p. 26) Which of the following goals are taken for granted to such an
extent that it is neglected as a principal criterion in strategic decision
making?
1.

A. Maturity

2.

B. Ethics

3.

C. Survival

4.

D. Competitiveness

(p. 27) Most _____ are so platitudinous that they read more like public
relations handouts.

1.

A. Philosophies

2.

B. Mission statements

3.

C. Goals

4.

D. Vision statements

(p. 23) The mission statement is a message designed to be inclusive of the
expectations of _______ stakeholders for the company's performance
over the ______.
1.

A. All; long run

2.

B. Only key; short run

3.

C. All; short run

4.

D. Only key; long run

(p. 26) In a dynamic business environment, ______ is essential.
1.

A. Status quo

2.

B. Compromising ethics in decision making

3.

C. Proactive change

4.

D. Adverse selection


(p. 27) The statement which usually accompanies the mission statement
and expresses the firm's basic beliefs, values and aspirations is known
as:
1.

A. Grand strategy

2.

B. The company's statement of philosophy

3.

C. The company profile

4.

D. Long-term objectives

(p. 23) _____ is a statement, not of measurable targets but of attitude,
outlook, and orientation.
1.

A. Company mission

2.

B. Company vision

3.

C. Company strategy

4.

D. Company policy

(p. 24) As the business grows or is forced by competitive pressures to
alter its product, market, or technology, ______ the company mission may
be necessary.
1.

A. redefining

2.

B. abandoning

3.

C. writing

4.

D. discarding

(p. 23) The company mission is a broadly framed but enduring statement
of
1.

A. A firm's intent

2.

B. Corporate structure

3.

C. A firm's competitive positioning

4.

D. Stakeholder analysis


(p. 29) The image the company seeks to project is reflected in the firm's:
1.

A. Profile

2.

B. Tactics

3.

C. Mission

4.

D. Strategic options

(p. 26) Generally, _____ is accepted as the clearest indication of a firm's
ability to satisfy the principal desires of employees and stockholders.
1.

A. Profit over the long term

2.

B. Profit over the short term

3.

C. Return on assets

4.

D. The number of lawsuits brought against the firm

(p. 23) The mission:
1.

A. Sets policy

2.

B. Describes the firm's product

3.

C. Identifies stakeholders

4.

D. Creates the board of directors

(p. 24) A mission statement should include all of these components
EXCEPT
1.

A. Basic types of products or services to be offered

2.

B. The firm's managerial philosophy

3.

C. The public image the firm seeks

4.

D. The government regulations the firm must meet

(p. 28) Which of these often reads more like public relations handouts
than the commitment to values they are meant to be?
1.

A. Firm's economic goals


2.

B. Company's self-concept

3.

C. Statement of company philosophy

4.

D. Firm's core competencies and competitive advantage statement

(p. 27) _____ vary little from one firm to another.
1.

A. Philosophies

2.

B. Mission statements

3.

C. Goals

4.

D. Vision statements

87 Free Test Bank for Strategic Management Planning
for Domestic and Global Competition 13th Edition
Pearce II Multiple Choice Questions - Page 2
(p. 33) Which of these is NOT a newest trend in mission components?
1.

A. Concern for suppliers and distributors

2.

B. Sensitivity to customer wants

3.

C. Concern for quality

4.

D. Statements of company vision

(p. 40) When executives manipulate personnel records to keep or acquire
key company personnel, this is an example of
1.

A. Moral hazard problem

2.

B. Adverse selection

3.

C. Self-concept

4.

D. Concern for quality

(p. 36) In overseeing the management of a firm, the board of directors
operates as representatives of the
1.

A. Governmental agencies


2.

B. Firms stockholders

3.

C. Firms employees

4.

D. Top management

(p. 38) In general, ____ seek stock value maximization.
1.

A. Employees

2.

B. Hired-hand managers

3.

C. Owners

4.

D. Suppliers and distributors

(p. 38) The board of director's greatest impact on the behavior of a firm
results from its
1.

A. Industry experience

2.

B. Dependence on the CEO

3.

C. Determination of company mission

4.

D. Mandate of company compliance with legal and ethical dictates

(p. 34) _______ presents the firm’s strategic intent.
1.

A. Mission statement

2.

B. Agency theory

3.

C. Adverse selection

4.

D. Vision statement

(p. 36) The strategic managers at the highest level of the organization:
1.

A. Review employee complaints

2.

B. Declare the firm's sense of values

3.

C. Are appointed

4.

D. Prepare budgets

(p. 34) All of these are Demming's well known points on quality EXCEPT:
1.

A. Drive out fear

2.

B. Create slogans, exhortations and numerical targets

3.

C. Institute a rigorous program of education and self-improvement

4.

D. Create constancy of purpose

(p. 34) Which of these is one of Demming's well-known points on quality?
1.

A. Create dependence on mass inspections to achieve quality

2.

B. Award business on the measure of price tag

3.

C. Breakdown barriers between departments

4.

D. Corporate transformation should be the responsibility of top management

(p. 40) When executives unrealistically assess acquisition targets’
outlooks in order to increase the probability of increasing organizational
size through their acquisition, this is an example of
1.

A. Moral hazard problem

2.

B. Adverse selection

3.

C. Self-concept

4.

D. Concern for quality

(p. 31) Much behavior in firms is _______ based.
1.

A. organizationally

2.

B. competitively

3.

C. individually

4.

D. community

(p. 42) Which of these represent a solution to the agency problem?
1.

A. Backloaded compensation for executives


2.

B. Separate the interests of the owners and agents

3.

C. Minimize executive risk-taking

4.

D. Focus performance measures on personal goals of executives

(p. 31) The essence of the company self-concept is the idea that

1.

A. The firm's public image is positive

2.

B. The firm must know itself

3.

C. The firm must know the industry

4.

D. The firm's economic goals must be aligned with the industry's top competitor

(p. 34) _______ represents a statement that is sometimes developed to
express the aspirations of the executive leadership.
1.

A. Mission statement

2.

B. Agency theory

3.

C. Adverse selection

4.

D. Vision statement

(p. 41-42) Which of the following is NOT a problem resulting from agency?
1.

A. Executive attempt to diversify their corporate risk

2.

B. Executives avoid risks

3.

C. Executives pursue growth in company earnings rather than size

4.

D. Executives act to protect their status

(p. 40) An agency problem caused by the limited ability of stockholders to
precisely determine the competencies and priorities of executives at the
time they are hired refers to
1.

A. Self-concept

2.

B. Adverse selection

3.

C. Moral hazard problem


4.

D. Concern for quality

(p. 36) The strategic decision makers in the firm are responsible for:
1.

A. The firm's mission

2.

B. Rewards

3.

C. Plant efficiency

4.

D. Daily operations

(p. 42) Backloaded compensation refers to
1.

A. Board of directors getting back stock as compensation

2.

B. Executives receiving handsome premium for superior future performance

3.

C. Suppliers getting bonuses for organization's performance

4.

D. Managers getting bonuses for past performances

(p. 38) Whenever there is a separation of the owners (principals) and the
managers (agents) of a firm, the potential exists for the wishes of the ____
to be ignored.
1.

A. owners

2.

B. managers

3.

C. employees

4.

D. customers

(p. 34) Where as ______ expresses an answer to the question "What
business are we in?" a company ____ is developed to express the
aspirations of the executive leadership.
1.

A. Mission statement; vision statement

2.

B. Economic goals; self concept

3.

C. Vision statement; mission statement

4.

D. Self-concept; economic goals


(p. 33) "The customer is our top priority" is a
1.

A. Mission statement

2.

B. Concern for quality

3.

C. Slogan

4.

D. Vision statement

(p. 33) Three issues have become prominent in the strategic planning for
organizations and are increasingly becoming integral parts in the
development and revisions of mission statements. These are:
1.

A. Self-concept, customers and markets

2.

B. Customers, quality and vision statement

3.

C. Markets, quality and concern for employees

4.

D. Concern for employees, suppliers and customers

(p. 38) A set of ideas on organizational control based on the belief that the
separation of the ownership from management creates the potential for
the wishes of owners to be ignored refers to the
1.

A. Agency theory

2.

B. Adverse selection principle

3.

C. Moral hazard problem

4.

D. Self concept

(p. 38) Agency problems arise when the interests of owners and managers
1.

A. diverge

2.

B. converge

3.

C. are compatible

4.

D. are similar


(p. 31) The idea that the firm must know itself is the essence of the
company
1.

A. Self-concept

2.

B. Objective

3.

C. Goal

4.

D. Strategy

(p. 38) _______ delegate authority to ______
1.

A. owners; managers

2.

B. managers; owners

3.

C. managers; suppliers

4.

D. customers; managers

(p. 27) Firms ____ address the question of their public image in an
intermittent fashion.
1.

A. seldom

2.

B. always

3.

C. frequently

4.

D. unanimously

(p. 34) Mission statement expresses an answer to which of these
questions?
1.

A. How do we compete in this industry?

2.

B. What business are we in?

3.

C. Who are our competitors?

4.

D. How do we meet the regulatory requirements?


(p. 42) Managers’ stature in the business community is commonly
associated with company
1.

A. type

2.

B. age

3.

C. size

4.

D. growth

(p. 36) Which group of strategic managers is responsible for overseeing
the creation and accomplishment of the company mission?
1.

A. Front-line supervisors

2.

B. Middle-managers

3.

C. Board of directors

4.

D. Employees

(p. 36) Which of these is NOT a responsibility of the board of directors?
1.

A. To establish and update the company mission

2.

B. To mandate company compliance with legal and ethical dictates

3.

C. To determine the amount and timing of the dividends paid to stockholders

4.

D. To work under the guidance of the CEO

(p. 40) Which of these represent the most popular solution to moral
dilemma and adverse selection problems?
1.

A. To more closely align the owners and agents interests through the use of
executive bonus plans

2.

B. To allow the managers to act more as hired-hands only

3.

C. To remove vision components from mission

4.

D. To ensure board of directors report and work for the CEO

(p. 31) Trading Tools performs an extensive evaluation of its competitive
strengths and weaknesses. This effort is directed towards determining its
1.

A. Vision

2.

B. Economic goals

3.

C. Public image

4.

D. Self-concept

(p. 38) Which of these conditions is also called “shirking?”
1.

A. Moral hazard problems

2.

B. Adverse selection

3.

C. Self-concept

4.

D. Concern for quality

(p. 34) _______ is often a single sentence, designed to be memorable.
1.

A. Mission statement

2.

B. Agency theory

3.

C. Adverse selection

4.

D. Vision statement

(p. 38) The cost of agency problems and the cost of actions taken to
minimize them are called
1.

A. Moral hazard problems

2.

B. Adverse selection

3.

C. Company creed

4.

D. Agency costs

(p. 38) Which of these conditions is also called “self-interest combined
with a smile?”
1.

A. Moral hazard problems


2.

B. Adverse selection

3.

C. Self-concept

4.

D. Concern for quality

(p. 33) Which of these is the newest trend in mission components?
1.

A. Sensitivity to customer wants

2.

B. Concern for suppliers and distributors

3.

C. Inclusion of both positive and negative aspects of public image

4.

D. Aligning the firm's self-concept to that of competitor's

(p. 34) _______ represents a statement that presents a firm's strategic
intent designed to focus the energies and resources of the company on
achieving a desirable future.
1.

A. Mission statement

2.

B. Agency theory

3.

C. Adverse selection

4.

D. Vision statement

(p. 34) Which two U.S. management experts fostered a worldwide
emphasis on quality in manufacturing?
1.

A. Bill Gates and John Allison

2.

B. Gary Forsee and Mr. Penney

3.

C. Bill Gates and E. Demming

4.

D. W. Edwards Demming and J. M. Juran

(p. 36) A company’s Board of Directors is elected by its
1.

A. managers

2.

B. stockholders

3.

C. customers


4.

D. employees

(p. 40) When executives presell products at year-end to trigger their
annual bonuses even though the deep discounts that they must offer will
threaten the price stability of their products for the upcoming year, this is
an example of
1.

A. Moral hazard problem

2.

B. Adverse selection

3.

C. Self-concept

4.

D. Concern for quality

(p. 38) When owners have limited access to company information making
executives free to pursue their own interests refers to
1.

A. Moral hazard problems

2.

B. Adverse selection

3.

C. Self-concept

4.

D. Concern for quality

(p. 31) A major determinant of a firm's success is the extent to which it
can relate functionally to the external environment. To accomplish this the
firm must have:
1.

A. Infinite sources of capital for expansion

2.

B. A realistic self-concept

3.

C. Specific objectives and job descriptions

4.

D. Community involvement