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| 1 | |
According to Henry Fayol, an effective plan possesses accuracy, which means that: |
| | A) | at any time, only one central, guiding plan is put into operation to achieve an organizational goal |
| | B) | managers need to make every attempt to collect and use all available information in the planning process. |
| | C) | plans can be altered and changed if the situation changes. |
| | D) | planning is an ongoing process in which managers build and refine previous plans and continually modify plans. |
| | E) | a plan must be definitive before it is put into practice by the organization. |
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| 2 | |
The divisional managers’ decisions pertaining to the divisions’ long-term goals, overall strategy, and structure is contained in a ____ plan. |
| | A) | corporate-level |
| | B) | functional-level |
| | C) | top management-level |
| | D) | business-level |
| | E) | grassroots-level |
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| 3 | |
Nonprogrammed decision making in unusual or one-of-a-kind situations are handled by the development of ___ plans. |
| | A) | rolling |
| | B) | standing |
| | C) | single-use |
| | D) | multi-use |
| | E) | intermediate |
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| 4 | |
According to Michael Porter’s five forces model, industry profits are likely to be low when: |
| | A) | the level of rivalry among competitors is low. |
| | B) | potential for entry into the industry is difficult. |
| | C) | there are several suppliers of inputs. |
| | D) | there are only a few large customers for the product. |
| | E) | there is no substitute for the product. |
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| 5 | |
Which of the following strategies refers to serving just one or a few segments of the market with the aim of making the organization the most differentiated company serving that segment? |
| | A) | Horizontal integration strategy |
| | B) | Diversification strategy |
| | C) | Vertical integration strategy |
| | D) | Focused differentiation strategy |
| | E) | Low-cost differentiation strategy |
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| 6 | |
Which of the following is an example of backward vertical integration? |
| | A) | Snack company McAdams Foods enters the business of growing the potatoes used in its products. |
| | B) | Telenet Inc. outsources its call center function to a company in India. |
| | C) | Advertising agency Quickia buys out a competitor in financial difficulties. |
| | D) | Bicycle manufacturer Daley’s buys a company that manufactures cell phones. |
| | E) | Teenies, a specialty toy manufacturer, opens its own online outlets to sell the toys it produces. |
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| 7 | |
The expanding a company’s operations either backward into an industry that produces inputs for its products or forward into an industry that uses, distributes, or sells its products is known as: |
| | A) | franchising. |
| | B) | horizontal integration. |
| | C) | unrelated diversification. |
| | D) | related diversification. |
| | E) | vertical integration. |
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| 8 | |
An example of unrelated diversification is: |
| | A) | Buying companies in new industries that are not linked in any way to the company’s current businesses |
| | B) | Selling the same standardized product in each national market in which the company competes |
| | C) | Allowing a foreign organization to take charge of both manufacturing and distributing one or more of its products in the foreign country |
| | D) | Investing in establishing production operations in a foreign country independent of any local direct involvement |
| | E) | Customizing a company’s products and marketing strategies to specific national conditions |
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| 9 | |
A decision to adopt a multidomestic strategy indicates that the managers of a company: |
| | A) | sell multiple products from different product lines only in a single national market. |
| | B) | customize products and marketing strategies to specific national conditions. |
| | C) | sell the same standardized product in each national market in which the company competes. |
| | D) | pool or share their organization’s resources and know-how with those of a foreign company. |
| | E) | invest in establishing production operations in a foreign country independent of any local direct involvement. |
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| 10 | |
When managers decide to establish a wholly owned foreign subsidiary, they: |
| | A) | pool or share their organization’s resources and know-how with those of a foreign company, and the two organizations share the rewards or risks of starting a new venture in a foreign country. |
| | B) | sell the company’s own products abroad or allow a local organization in the foreign country to distribute its products while manufacturing only in the home country. |
| | C) | invest in establishing production operations in a foreign country independent of any local direct involvement. |
| | D) | sell to a foreign organization the rights to use the company’s brand name and operating know-how in return for a lump-sum payment and share of the profits. |
| | E) | allow a foreign organization to take charge of both manufacturing and distributing one or more of the company’s products in a foreign country. |
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