MID TERM EXAM 1. If an organization chooses to have both a mission and a vision, the mission statement should be established first. 2. Small, nonprofit organizations never develop mission statements. 3. Whereas the mission statement answers the question, "What do we want to become?" the vision statement answers the question, "What is our business?" 4. Mission statements are sometimes difficult to derive because top management may disagree over company objectives. 5. In multidivisional organizations, each division should develop a mission statement consistent with and supportive of the corporate mission. 6. Stakeholders of an organization include stockholders, customers and creditors, but not competitors. 7. Individuals who own stock in a corporation are considered stakeholders. 8. Having a clear mission and vision can provide a basis for a company's internal and external assessment. 9. A good mission statement serves as a framework for evaluating both current and prospective activities. 10. The operating philosophy of organizations should be to develop a product and then try to find a market for it. 11. Well-conceived and properly executed mission and vision statements do not need to be subject to revision. 12. The aim of an external audit is to develop an exhaustive list of every possible factor that could influence the business. 13. Five major categories of external variables are: 1) economic forces, 2) social, cultural, demographic, and natural environment forces, 3) political, governmental, and legal forces, 4) technological forces and 5) demographic forces. 14. Economic factors do not have much impact on the attractiveness of strategies. 15. Remaining solely domestic is an increasingly safer strategy for U.S. companies. 16. In the face of a deepening global recession, countries worldwide are resorting to protectionism to safeguard their own industries. 17. In practice, critical technology decisions are too often delegated to lower organizational levels or are made without an understanding of their strategic implications. 18. Strategic management focuses on integrating management, marketing, finance and accounting, production and operations, research and development, and information systems to achieve organizational success. 19. Formulation, implementation, and evaluation of strategy activities occur at three hierarchical levels in a large organization: corporate, divisional or strategic business unit, and functional. 20. By occasionally monitoring external events, companies should be able to identify when change is required. 21. Anything the firm does especially well compared to rival firms could be considered a competitive advantage. 1 22. One of the ways in which the Internet has transferred power from businesses to individuals is by making comparison-shopping quick and easy. 23. Identifying an organization's existing vision, mission, objectives, and strategies is the final step for the strategic management process. 24. Firms with planning systems more closely resembling strategic-management theory generally exhibit superior long-term financial performance relative to their industry. 25. Strategic management focuses on integrating management, ________, and information systems to achieve organizational success. A) marketing B) finance and accounting C) production and operations D) research and development E) all of the above 26. What can be defined as the art and science of formulating, implementing and evaluating cross-functional decisions that enable an organization to achieve its objectives? A) Strategy formulation B) Strategy evaluation C) Strategy implementation D) Strategic management E) Strategic leading 27. During what stage of strategic management are a firm's specific internal strengths and weaknesses determined? A) Formulation B) Implementation C) Evaluation D) Feedback E) Goal-setting 28. An important activity in ________ is taking corrective action. A) strategy evaluation B) strategy implementation C) strategy formulation D) strategy leadership E) all of the above 29. What types of skills are especially critical for successful strategy implementation? A) Interpersonal B) Marketing C) Technical D) Conceptual E) Visionary 2 30. The fact that Apple has no manufacturing facilities of its own A) has caused it to build up massive debt on its balance sheet. B) has enabled it to remain financially lean with virtually no long-term debt. C) has been problematic for Apple in terms of debt. D) illustrates that having more fixed assets than rival firms can provide major competitive advantages in a global recession. E) means that it is in the same position as Sony. 31. Which individuals are most responsible for the success and failure of an organization? A) Strategists B) Financial planners C) Personnel directors D) Stakeholders E) Human resource managers 32. What are enduring declarations of purpose that distinguish one business from other similar firms? A) Policies B) Mission statements C) Objectives D) Rules E) Employee conduct guidelines 33. Generally, external opportunities and threats are A) uncontrollable by a single organization. B) unable to have a significant impact on an organization. C) not worth monitoring and evaluating. D) key functions in strategy implementation. E) key functions in strategy exploitation. 34. Long-term objectives should be all of the following EXCEPT A) measurable. B) continually changing. C) reasonable. D) challenging. E) consistent. 35. Annual objectives are especially important in strategy A) reduction. B) formulation. C) implementation. D) evaluation. E) policy. 36. The strategic-management process 3 A) occurs once a year. B) is a semiannual process. C) is a continuous process. D) applies mostly to companies with sales greater than $100 million. E) applies mostly to small businesses. 37. Which of the following is part of the strategic management model? A) Measure and evaluate performance B) Develop mission and vision statements C) Establish long-term objectives D) Implement strategies E) All of the above 38. The act of strengthening employees' sense of effectiveness by encouraging and rewarding them for participating in decision-making and exercising initiative and imagination is referred to as A) authoritarianism. B) proaction. C) empowerment. D) transformation. E) delegation. 39. All of the following are guidelines for effective strategic planning EXCEPT A) it should be simple and nonroutine. B) it should be a learning process for all managers and employees. C) it should be a paper process more than a people process. D) it should not disregard qualitative information. E) it should not be a formal system for control. 40. Organizations should take a(n) ________ approach in their industry. A) adversarial rather than a collegial B) collegial rather than an adversarial C) reactive rather than a proactive D) proactive rather than a reactive E) cooperative rather than a competitive 41 -45. Define and discuss the differences between vision and mission statements. Use examples to illustrate your points. 46 - 50. What are the pitfalls in strategic planning that management in an organization should watch out for or avoid? Identify any five pitfalls. 4 NAME: ________________________________________________ Answer Sheet: Answer either TRUE or FALSE or the correct letter response to the question. Additionally the last two questions are essays worth 5 points each. JUST RETURN THIS ANSWER SHEET IN THE \"DROP BOX\". 1. 21. 2. 22. 3. 23. 4. 24. 5. 25. 6. 26. 7. 27. 8. 28. 9. 29. 10. 30. 11. 31. 12. 32. 13. 33. 14. 34. 15. 35. 16. 36. 17. 37. 18. 38. 19. 39. 20. 40. 5 40 -45. Essay (Use more space to write your answer) 46 - 50 Essay (Use more space to write your answer)