Question 1

A broad declaration of the organization's overriding purpose, which is intended to identify the organization's products and customer base, as well as to differentiate the organization from its competitors, is known as a ________ statement.

Accepted Answer

A mission statement is a broad declaration of an organization's overriding purpose, what it is seeking to achieve from its activities; this statement is also intended to identify what is unique or important about its products to its employees and customers as well as to distinguish or differentiate the organization in some ways from its competitors.

Question 2

The cluster of decisions that managers make to assist an organization to achieve its goals is known as ________.

Accepted Answer

A strategy is a cluster of related managerial decisions and actions to help an organization attain one of its goals.

Question 3

According to Michael Porter's theory, it is possible for managers to pursue both a low-cost strategy and a differentiation strategy at the same time.

Accepted Answer

According to Porter's theory, managers cannot simultaneously pursue both a low-cost strategy and a differentiation strategy.

Question 4

Managers of Matrix Ltd. attempted to give the organization a competitive advantage by driving the production costs to as low a level as possible. We can say that the organization is pursuing a differentiation strategy.

Accepted Answer

With a low-cost strategy, managers try to gain a competitive advantage by focusing the energy of all the organization's functions on driving the company's costs down below the costs of its industry rivals. With a differentiation strategy, managers try to gain a competitive advantage by focusing all the energies of the organization's functions on distinguishing the organization's products from those of competitors on one or more important dimensions.

Question 5

A good plan specifies not only which goals and strategies an organization is committed to but is also accountable for putting the strategies into action to attain the goals.

Accepted Answer

A good plan specifies not only which goals and strategies an organization is committed to but also who bears the responsibility for putting the strategies into action to attain the goals. When managers know they will be held accountable for attaining a goal, they are motivated to do their best to make sure the goal is achieved.

Question 6

The plan for implementing a new strategy requires the development of new functional strategies.

Accepted Answer

The plan for implementing a new strategy requires the development of new functional strategies, the redesign of an organization's structure, and the development of new control systems; it might also require a new program to change an organization's culture.

Question 7

A strategic alliance can take the form of a written contract between two or more companies to exchange resources, or it can result in the creation of a new organization.

Accepted Answer

A strategic alliance can take the form of a written contract between two or more companies to exchange resources, or it can result in the creation of a new organization.

Question 8

An intermediate-term plan has a time horizon between five and ten years.

Accepted Answer

Long-term plans have a time horizon of five years or more; intermediate-term plans have a time horizon between one and five years; and short-term plans have a time horizon of one year or less.

Question 9

Strategy formulation begins with managers systematically analyzing the factors inside an organization and outside in the global environment that affect the organization's ability to meet its goals now and in the future.

Accepted Answer

In strategy formulation, managers work to develop the set of strategies that will allow an organization to accomplish its mission and achieve its goals. Strategy formulation begins with managers systematically analyzing the factors or forces inside an organization and outside in the global environment that affect the organization's ability to meet its goals now and in the future.

Question 10

With a multidomestic strategy, managers decide to sell the same product with the same marketing approach in all of the countries in which the product is sold.

Accepted Answer

When managers decide to customize products and marketing strategies to specific national conditions, they adopt a multidomestic strategy.

Question 11

An organization's level of involvement abroad decreases in a joint venture because the alliance rarely involves capital investment to produce goods or services outside the home country.

Accepted Answer

An organization's level of involvement abroad increases in a joint venture because the alliance normally involves a capital investment in production facilities abroad in order to produce goods or services outside the home country.

Question 12

The corporate-level plan outlines the specific methods a division, a business unit, or an organization will use to compete effectively against its rivals in an industry.

Accepted Answer

The corporate-level plan contains top management's decisions concerning the organization's mission and goals, overall (corporate-level) strategy, and structure.

Question 13

An ongoing process in which managers build and refine previous plans and continually modify plans at all levels, corporate, business, and functional, so that they fit together into one broad framework, is known as ________.

Accepted Answer

Continuity means that planning is an ongoing process in which managers build and refine previous plans and continually modify plans at all levels, corporate, business, and functional, so that they fit together into one broad framework.

Question 14

A written set of instructions that describes the series of actions that a manager should take in a specific situation is called an SOP of an organization.

Accepted Answer

A standing operating procedure is a written instruction describing the exact series of actions that should be followed in a specific situation. For example, an organization may have a standing plan about ethical behavior by employees.

Question 15

Managers pursuing a focused differentiation strategy serve just one or a few segments of the market and aim to make their organization the most differentiated company serving that segment.

Accepted Answer

Managers pursuing a focused low-cost strategy serve one or a few segments of the overall market and aim to make their organization the lowest-cost company serving that segment. By contrast, managers pursuing a focused differentiation strategy serve just one or a few segments of the market and aim to make their organization the most differentiated company serving that segment.

Question 16

Managers should attempt to collect and use all available information in the organization's planning process. This emphasizes the _______ aspect of planning.

Accepted Answer

Accuracy means that managers need to make every attempt to collect and utilize all available information at their disposal in the planning process.

Question 17

When only one central, guiding plan is put into operation to achieve an organizational goal, the organization is experiencing ________.

Accepted Answer

Unity means that at any one time only one central, guiding plan is put into operation to achieve an organizational goal; more than one plan to achieve a goal would cause confusion and disorder.

Question 18

When a company is successful in pursuing the strategy of concentration on a single industry, it uses its divisional skills to develop new products or expand its locations.

Accepted Answer

When a company is successful in pursuing the strategy of concentration on a single industry, it uses its functional skills to develop new kinds of products, or it expands the number of locations in which it uses those skills.

Question 19

Synergy is obtained by apportioning financial resources among divisions to increase financial returns or spread risks among different businesses.

Accepted Answer

Portfolio strategy is apportioning financial resources among divisions to increase financial returns or spread risks among different businesses, much as individual investors do with their own portfolios.

Question 20

Scenario planning is often used to strengthen SWOT analysis.

Accepted Answer

Scenario planning is often used to strengthen SWOT analysis.

Quiz 6: Planning, Strategy, and Competitive Advantage

A broad declaration of the organization's overriding purpose, which is intended to identify the organization's products and customer base, as well as to differentiate the organization from its competitors, is known as a ________ statement.

The cluster of decisions that managers make to assist an organization to achieve its goals is known as ________.

According to Michael Porter's theory, it is possible for managers to pursue both a low-cost strategy and a differentiation strategy at the same time.

Managers of Matrix Ltd. attempted to give the organization a competitive advantage by driving the production costs to as low a level as possible. We can say that the organization is pursuing a differentiation strategy.

A good plan specifies not only which goals and strategies an organization is committed to but is also accountable for putting the strategies into action to attain the goals.

The plan for implementing a new strategy requires the development of new functional strategies.

A strategic alliance can take the form of a written contract between two or more companies to exchange resources, or it can result in the creation of a new organization.

An intermediate-term plan has a time horizon between five and ten years.

Strategy formulation begins with managers systematically analyzing the factors inside an organization and outside in the global environment that affect the organization's ability to meet its goals now and in the future.

With a multidomestic strategy, managers decide to sell the same product with the same marketing approach in all of the countries in which the product is sold.

An organization's level of involvement abroad decreases in a joint venture because the alliance rarely involves capital investment to produce goods or services outside the home country.

The corporate-level plan outlines the specific methods a division, a business unit, or an organization will use to compete effectively against its rivals in an industry.

An ongoing process in which managers build and refine previous plans and continually modify plans at all levels, corporate, business, and functional, so that they fit together into one broad framework, is known as ________.

A written set of instructions that describes the series of actions that a manager should take in a specific situation is called an SOP of an organization.

Managers pursuing a focused differentiation strategy serve just one or a few segments of the market and aim to make their organization the most differentiated company serving that segment.

Managers should attempt to collect and use all available information in the organization's planning process. This emphasizes the _______ aspect of planning.

When only one central, guiding plan is put into operation to achieve an organizational goal, the organization is experiencing ________.

When a company is successful in pursuing the strategy of concentration on a single industry, it uses its divisional skills to develop new products or expand its locations.

Synergy is obtained by apportioning financial resources among divisions to increase financial returns or spread risks among different businesses.

Scenario planning is often used to strengthen SWOT analysis.