Economics MCQs Sample Assignment

Multiple Choice Questions

1. Which of the following is an element of a firm's remote external environment?

1. Competition
2. Suppliers
3. Government agencies
4. Economic and social conditions

2. Which of the following is NOT a part of a firm's immediate external environment?

1. Technological development
2. Competitors
3. Suppliers
4. Government agencies

3. The immediate external environment includes:

1. Competitors
2. S. B. U. s
3. Divisions
4. Management

4. The _______ comprises economic and social conditions, political priorities and technological developments, all of which must be anticipated, monitored, assessed and incorporated into the executive's decision making.

1. Remote external environment
2. Task environment
3. Operating environment
4. Internal environment

5. The set of decisions and actions that result in the formulation and implementation of plans designed to achieve a company's objectives is defined as:

1. Strategic policy
2. Business policy
3. Strategic management
4. Tactics

6. Strategic management compromises nine critical tasks. Which of the following is NOT one of the tasks?

1. Development of medium-term objectives compatible with grand strategies
2. Assessment of the company's external environment
3. Selection of a particular set of long-term objectives and grand strategies
4. Evaluate the success of the strategic process

7. Strategic management involves the _____, directing, _____ and controlling of a company's strategy-related decisions and actions.

1. Financing; marketing
2. Planning; financing
3. Marketing; planning
4. Planning; organizing

8. Large-scale, future-oriented plans, for interacting with the competitive environment to achieve company objectives refers to its

1. Strategy
2. Goals
3. Competitive analysis
4. Dynamic policies

9. A strategy is a company's

1. Game plan
2. Pricing policy
3. Value statement
4. Long-term objective

10. A _____is a company's game plan.

1. Strategy
2. Pricing policy
3. Value statement
4. Long-term objective

11. A(n) _____ provides a framework for managerial decisions.

1. Vision
2. Organizational structure
3. Strategy
4. Long-term objective

12. A(n) strategy reflects a company's awareness of how, when and where is should ____, against whom it should _____ and for what purpose it should _____.

1. cooperate
2. ally
3. compete
4. plan

13. Strategic issues require which level of management decisions?

1. Operative
2. Top
3. Front-line
4. Middle

14. Strategic decisions ostensibly commit the firm for

1. 1-2 years
2. The short term
3. 3-4 years
4. A long time, typically five years

15. Strategic issues require large amounts of the company’s\

1. strengths
2. opportunities
3. suppliers
4. resources

16. Some business decisions are strategic and therefore deserve strategic management attention. Which of the following is one of the six strategic issue dimensions?

1. Requires front-line employee decisions
2. Is not likely to have a significant impact on long-term prosperity of the firm
3. Necessitates considering factors in the firm's external environment
4. Is spontaneous

17. Which of the following applies to strategic issues?

1. Consider only the firm's external environment
2. Are future oriented
3. Concern allocation of insignificant amounts of company resources
4. Do not have long-term impact on the firm's prosperity

18. Strategic issues are ____ oriented.

1. future
2. present
3. past
4. timelessly

19. Strategic decisions are based on what managers _____, rather than on what they _____.

1. Forecast; know
2. React to; anticipate
3. Know; forecast
4. Compromise with; analyze

20. All businesses exist in a(n) _____ system.

1. open
2. closed
3. insular
4. protected

21. Strategic decisions have ______ effects on firms.

1. Temporary
2. Short-lived
3. Enduring
4. Limited

22. The Walt Disney Company is a multi-business company. It typically would have ____ levels of strategy.

1. 5 or more
2. 4
3. 3
4. 2

23. Which level of strategy uses a portfolio approach?

1. Business
2. Operational
3. Corporate
4. Functional

24. Which level of strategy is in the middle of the decision-making hierarchy?

1. Corporate
2. Functional
3. Business
4. Strategic

25. A business, which by definition is a profit center that focuses on a specific combination of products, markets, and technologies, is also known as a

1. Subsidiary
2. Sister unit
3. Strategic business unit
4. Corporate unit

26. Which level of strategy is at the bottom of the decision-making hierarchy?

1. Corporate
2. Business
3. Functional
4. Operational

27. Typically how many strategic decision levels are there in the corporate decision-making hierarchy of a large corporation?

1. 5 or more
2. 4
3. 3
4. 2

28. To a large extent, attitudes at the corporate level reflect the concerns of

1. Stockholders and society at large
2. Top managers
3. The CEO
4. The federal government

29. The top of the decision-making hierarchy comprises all of these EXCEPT

1. Board of directors
2. Front-line managers
3. The CEO
4. Administrative officers

30. In a multi-business firm, ______ -level executives determine the businesses in which the firm should be involved.

1. Business
2. Functional
3. Corporate
4. Operative

31. At Office Supply, Inc., ____ -level managers would be responsible for determining whether the company should be involved in home furnishings or electronic appliance businesses, whereas ____ -level managers would be responsible for determining how the firm will compete in the selected product-market arena.

1. Business; corporate
2. Corporate; functional
3. Functional; business
4. Corporate; business

32. In the middle of the decision-making hierarchy is the _____ level.

1. Corporate
2. Functional
3. Business
4. Strategic

33. Who determines the basis on which a company can compete in the selected product-market arena?

1. Functional-level strategic managers
2. Corporate-level strategic managers
3. Business-level strategic managers
4. Operational managers supervising operative

34. Which of these managers tries to identify and secure the most profitable and promising market segment?

1. Functional managers
2. Corporate managers
3. Business managers
4. Operative

35. The functional level of decision making is characterized by:

1. The board of directors deriving corporate goals
2. Managers of product, geographic and functional areas
3. The CEO developing a company profile
4. Business managers interpreting the mission into operational objectives

36. Which strategic level is typically responsible for developing annual objectives and short-term strategies?

1. Functional level
2. Corporate level
3. Business level
4. Board of Directors level

37. Which of the following is NOT a level in the decision-making hierarchy of a firm?

1. Business
2. Corporate
3. Operative
4. Functional

38. Functional managers are typically responsible for which of the following?

1. Annual objectives
2. Tactics
3. Corporate goals
4. Mission

39. Whereas corporate and business-level managers center their attention on _____, managers at functional-level center their attention on ____.

1. Operational issues; strategic issues
2. Doing things right; doing the right things
3. Entrepreneurial mode; adaptive mode
4. Doing the right things; doing things right

40. Decisions at which level of management tend to be more value-oriented, more conceptual, and less concrete?

1. Functional
2. Corporate
3. Operative
4. Business

41. Dividend policies are decided at the

1. Corporate level
2. Business level
3. Functional level
4. Operational level

42. Which level of decisions encompasses greater risk, cost and profit potential?

1. Business
2. Lower echelon
3. Corporate
4. Functional

43. Corporate-level decisions are characterized by:

1. Decreased risk
2. Doing things right
3. Short-time horizons
4. Greater cost

44. Decisions concerning plant location, distribution channels, geographic coverage and market segmentation are typically made at:

1. The corporate level
2. The business level
3. The functional level
4. The Board level

45. The degree to which participation, responsibility, authority and discretion in decision-making are specified in strategic management is called:

1. Informality
2. Formality
3. Functional tactic
4. Dynamic mode

46. Which one of these forces DOES NOT determine how much formality is needed in strategic management?

1. Size
2. Country of origin
3. Complexity of environment
4. Production process

47. Which of these is usually positively correlated with the cost, comprehensiveness, accuracy and success of planning?

1. Greater formality
2. Functional structure
3. Organizational matrix
4. Functional tactics

48. There are ____ commonly identified modes based upon formality in strategic management.

1. 4
2. 2
3. 5
4. 3

49. Very large firms typically use the _____ mode of strategic management.

1. Adaptive
2. Entrepreneurial
3. Informal
4. Planning

50. The mode associated with medium-sized firms in relatively stable environments is called the _____ mode.

1. entrepreneurial
2. adaptive
3. business
4. planning

51. Firms that are basically under the control of a single individual and produce a limited number of products/services are referred to as following ______ mode.

1. Entrepreneurial
2. Planning
3. Adaptive
4. Corporate

52. The informal, intuitive and limited approach to strategic management associated with owner-managers of smaller firm refers to the ____ mode of formality.

1. Entrepreneurial
2. Functional
3. Planning
4. Adaptive

53. The planning mode refers to the

1. Strategic formality associated with the large firms that operate under a comprehensive, formal planning system
2. Strategic formality associated with medium-sized firms that emphasize the incremental modification of existing competitive approaches
3. Strategic formality associated with global firms that emphasize cultural value systems
4. Informal, intuitive and limited approach to strategic management with owner-manager of smaller firms

54. The adaptive mode refers to

1. Strategic formality associated with the large firms that operate under a comprehensive, formal planning system
2. Strategic formality associated with medium-sized firms that emphasize the incremental modification of existing competitive approaches
3. Strategic formality associated with global firms that emphasize cultural value systems
4. Informal, intuitive and limited approach to strategic management with owner-manager of smaller firms

55. Which of these is NOT a mode of formality?

1. Adaptive
2. Planning
3. Functional
4. Entrepreneurial

56. The ideal strategic management team includes decision makers from

1. All three company levels (corporate, business and functional)
2. Just the functional level since they are closest to the customers
3. Just the corporate and business levels given that they focus on doing the right thing
4. Just the top management since they understand the big picture

57. Managers at the _____ level typically have principal responsibilities for developing environmental analysis and forecasting, establishing business objectives and developing business plans prepared by staff groups.

1. Corporate
2. Functional
3. Operational
4. Business

58. When the CEO is very autocratic, the effectiveness of the firm's strategic planning and management processes is likely to:

1. Enhance strategic planning but diminish its processes
2. Be greatly enhanced
3. Have no effect
4. Be diminished

59. Which of these is NOT true about the behavioral effect of strategic management?

1. Strategy formulation activities enhance the firm's ability to prevent problems
2. Resistance to change is reduced
3. Gaps and overlaps in activities among individuals and groups are increased to ensure the checks and balance
4. The employee involvement is strategy formulation improves their understanding of the productivity reward relationship in every strategy plan

60. The behavioral consequences of strategic management are similar to those of

1. authoritative decision making
2. centralized decision making
3. autocratic decision making
4. participative decision making

61. Which of the following is a major function of the strategic management model?

1. It helps make profits for the firm
2. It helps in identifying key issues faced by the firm
3. It helps in deciding which products to sell
4. It depicts the sequence and relationships of the major components of the strategic management process

62. Social responsibility is a critical consideration for a company's strategic decision makers since

1. Stockholders demand it
2. The mission statement must express how the company intends to contribute to the societies that sustain it
3. It increases a company's profits
4. It helps make decisions

63. Assessment of the strengths and weaknesses of the company’s management and organizational structure is a part of

1. Internal analysis
2. Mission statement
3. External environment analysis
4. Corporate goals

64. The external environment consists of:

1. The operating environment
2. Managers
3. Employees
4. Owners

65. Which one of the following is NOT an interactive segment of a firm's external environment?

1. Functional
2. Remote
3. Industry
4. Operating

66. Description of the company's product, market and technological areas of emphasis is contained in the

1. Assessment of the external environment
2. Company profile
3. Company mission
4. Interactive opportunity analysis

67. The results that an organization seeks over a multiyear period are its

1. Generic strategies
2. Grand strategies
3. Mission statements
4. Long-term objectives

68. The doubling of EPS within 5 years with increases in each intervening year is called a(n):

1. Mission
2. Long-term objective
3. Action plan
4. Short-term objective

69. The difference between long-term and short-term objectives is principally:

1. Greater attainability
2. Greater flexibility
3. Greater measurability
4. Greater specificity

70. Grand strategies include:

1. Market turnaround
2. Vertical diversification
3. Conglomerate integration
4. Innovation

71. Which of the following is an example of a grand strategy?

1. Decentralization
2. Policy making
3. Conglomerate integration
4. Horizontal integration

72. Long-term objectives are principally attained through:

1. Annual goals
2. Functional strategies
3. Short-term goals
4. Grand strategy

73. The minimum equity position required for all new McDonald's franchises is an example of:

1. A goal
2. A procedure
3. A policy
4. An objective

74. The general plan of major actions through which a firm intends to achieve is long-term objectives is called its:

1. Generic strategy
2. Long-term goal
3. Grand strategy
4. Mission

75. Broad, precedent-setting decisions that guide or substitute for repetitive or time-sensitive managerial decision making are called

1. Goals
2. Strategies
3. Objectives
4. Policies

76. Which of the following is a generic strategy option?

1. Vertical integration
2. Diversification
3. Differentiation
4. Retrenchment

78. Horizontal integration is an example of a

1. Generic strategy
2. Grand strategy
3. Functional level strategy
4. SBU strategy

79. Specific actions that need to be undertaken to achieve short-term objectives, usually by functional areas, refers to

1. Policies
2. Formality
3. Functional tactics
4. Process

80. Which of these refers to short-term, narrow scoped plans that detail "means" or activities that a company will use to achieve short-term projects?

1. Policies
2. Formality
3. Vision
4. Functional tactics

81. _____ is a critical stage in strategy implementation wherein managers attempt to recast their organization.

1. Continuous improvement
2. Restructuring
3. Strategic control
4. Strategy formulation

82. _____ is concerned with tracking a strategy as it is being implemented, detecting problems or changes in its underlying premises and making necessary adjustments.

1. Restructuring strategy
2. Strategic control
3. Internal analysis
4. Functional tactics

83. Which of these is a form of strategic control in which managers are encouraged to be proactive in improving all operations of the firm?

1. Continuous improvement
2. Adaptive mode
3. Functional tactics
4. Planning mode

84. A flow of information through interrelated stages of analysis toward achievement of an aim is:

1. A process
2. A procedure
3. A policy
4. A system

85. Influential individuals and groups that are vitally interested in the actions of the business are called

1. Stockholders
2. Stakeholders
3. Strategists
4. Customers

86. One implication of viewing strategic management as a process is that strategy formulation and implementation are:

1. Sequential
2. Simultaneous
3. Random
4. Reversible

87. Strategic management processes need which of the following to enhance future decision making?

1. Testing
2. Feedback
3. Discontinuity
4. Projecting

88. The strategy management process is:

1. Stationary
2. Dynamic
3. Static
4. Radical

Essay Questions

88. Define strategic management. Identify any four of the nine critical tasks of strategic management?

89. Strategic issues have several key dimensions. Briefly describe any three of them?

90. Describe the three levels of strategy in an organization. Provide an example of each?

91. With regards to the levels of strategy, compare and contrast single-business firms versus multiple-business firms?

92. How do the characteristics of strategic management decisions vary with the level of strategic activity considered?

93. What is meant by “formality” in strategic management? What forces determine how much formality is needed in strategic management?

94. How are the entrepreneurial, planning, and adaptive modes different?

95. Who are the strategy makers in an organization?

96. Discuss the benefits of a participative approach to strategic management?

97. Define and briefly describe any five components of the strategic management model?

98. Differentiate between generic and grand strategies?

99. Define strategic control. Give an example of strategic control from a managerial perspective?

100. What implications can be drawn from viewing strategic management as a process? Explain?