Question 1

What principle is based on the belief that the true measure of a really good strategist is the ability to solve problems?
A) Managing by crisis
B) Managing by objectives
C) Managing by extrapolation
D) Managing by exception
E) Managing by hope

Accepted Answer

A

Question 2

Burger King is converting virtually all of its company-owned outlets to franchised operations.

Accepted Answer

Burger King announced in 2020 that they plan to convert 100% of their company-owned restaurants to franchised operations over the next few years.

Question 3

Franchising is an effective means of implementing forward integration.

Accepted Answer

Franchising allows a company to expand by granting others the right to use their brand, products, and processes. This allows for forward integration as the parent company is able to control the distribution and sale of their products through their franchisees.

Question 4

Objectives provide direction and allow for organizational synergy.

Accepted Answer

Objectives are important for providing a clear direction for the organization and for creating alignment and synergy among its members.

Question 5

Which level of strategy is most likely NOT present in small firms?
A) Company
B) Functional
C) Divisional
D) Operational
E) All of the above are present in small firms.

Accepted Answer

Divisional strategy is usually seen in larger firms that have multiple divisions with their own unique strategies. Small firms typically operate with a more focused approach and do not have the need for divisional strategies. Therefore, option C is the most likely to not be present in small firms.

Question 6

A chief executive officer is located in the divisional level of a large firm.

Accepted Answer

A chief executive officer (CEO) is typically located at the corporate or top level of a large firm, overseeing the entire organization rather than a specific division.

Question 7

What principle is built on the idea that there is no general plan for which way to go and what to do?
A) Managing by crisis
B) Managing by extrapolation
C) Managing by objectives
D) Managing by hope
E) Managing by subjectives

Accepted Answer

The answer of What principle is built on the idea...

Question 8

Financial objectives involve all of the following EXCEPT
A) growth in revenues.
B) larger market share.
C) higher dividends.
D) greater return on investment.
E) a rising stock price.

Accepted Answer

Larger market share is more of a strategic or marketing objective rather than a direct financial objective. Financial objectives typically focus on metrics directly related to the company's financial health and performance, such as revenue growth, dividends, return on investment, and stock price.

Question 9

Strategic objectives include those associated with growth in revenues, growth in earnings, higher dividends, larger profit margins, and improved cash flow.

Accepted Answer

The answer of Strategic objectives include those associated with growth...

Question 10

Divestiture is selling all of a company's assets, in parts, for their tangible worth.

Accepted Answer

Divestiture involves a company selling off a portion of its assets or a division, not necessarily all of its assets, and it can be for strategic, financial, or regulatory reasons, not just for their tangible worth.

Question 11

Long-term objectives are needed at which level(s) in an organization?
A) Corporate
B) Divisional
C) Functional
D) All of the above
E) Corporate & divisional levels, but not functional level

Accepted Answer

Long-term objectives are needed at all levels in an organization, as they provide direction and focus for the entire organization. Corporate-level objectives set the overall direction for the company, while divisional-level objectives focus on specific business units or product lines. Functional-level objectives support the divisional objectives by specifying how each department or function can contribute to achieving them. Therefore, all levels of an organization need long-term objectives to align their efforts towards a common goal.

Question 12

Horizontal integration is seeking ownership or increased control over competitors.

Accepted Answer

Horizontal integration involves a company acquiring or merging with other companies that are similar in their industry or market. This allows the company to gain control over its competitors and expand its market share.

Question 13

"If it ain't broke, don't fix it" refers to managing by crisis.

Accepted Answer

"If it ain't broke, don't fix it" is a mantra for maintaining the status quo and avoiding change. Managing by crisis involves waiting for problems to occur before taking action, which is not necessarily related to this phrase.

Question 14

Gaining ownership or increased control over distributors or retailers is called forward integration strategy.

Accepted Answer

Forward integration strategy involves acquiring or increasing control over distributors or retailers in order to have more direct access to customers and gain better control over the supply chain.

Question 15

Which strategy is effective when new, but related, products could be offered at highly competitive prices?
A) Forward integration
B) Related diversification
C) Related integration
D) Conglomerate diversification
E) Unrelated diversification

Accepted Answer

Related diversification is the best choice when new, but related, products could be offered at highly competitive prices. This strategy involves the expansion of the firm's products or services into a new market that is related to its existing business. By doing this, the firm can leverage its existing strengths, such as brand recognition and distribution channels, to gain a competitive advantage in the new market. Additionally, offering products at competitive prices can help the firm gain market share and increase profits.

Question 16

Long-term objectives represent the results expected from pursuing certain strategies.

Accepted Answer

Long-term objectives provide direction and purpose for strategic planning and are expected outcomes of the chosen strategies.

Question 17

A growing trend is for franchisers to buy out their part of the business from their franchisees.

Accepted Answer

This statement is not accurate. Franchisers and franchisees typically have a contractual agreement that outlines the rights and responsibilities of each party. While it is possible for either party to buy out the other, it is not necessarily a growing trend for franchisers to buy out their part of the business from their franchisees.

Question 18

Because a combination strategy bears no risk, many organizations pursue a combination of two or more strategies simultaneously.

Accepted Answer

No strategy is completely risk-free, and pursuing multiple strategies at once can actually increase risk as resources are spread thin and priorities become blurred.

Question 19

Which strategy should an organization use when its products are currently in the declining stage of the product's life cycle?
A) Divestiture
B) Related diversification
C) Backward integration
D) Unrelated diversification
E) Retrenchment

Accepted Answer

The answer of Which strategy should an organization use when...

Question 20

Strategic objectives include larger market share, quicker on-time delivery than rivals, shorter design-to-market times than rivals, lower costs than rivals, and wider geographic coverage than rivals.

Accepted Answer

These are all typical strategic objectives that companies strive for in order to gain a competitive advantage over their rivals.

Quiz 5: Strategies in Action

What principle is based on the belief that the true measure of a really good strategist is the ability to solve problems?

Burger King is converting virtually all of its company-owned outlets to franchised operations.

Franchising is an effective means of implementing forward integration.

Objectives provide direction and allow for organizational synergy.

Which level of strategy is most likely NOT present in small firms?

A chief executive officer is located in the divisional level of a large firm.

What principle is built on the idea that there is no general plan for which way to go and what to do?

Financial objectives involve all of the following EXCEPT