MGT603 Solved papers Mega Collection for Mid Term Papers

Long-term objectives includes all of the following EXCEPT:

► Measurable

► Reasonable

► Varying

► Consistent

Pg#9

Objectives should be challenging, measurable, consistent, reasonable,

and clear. In a multidimensional firm, objectives should be established for the overall company and for each

division.

Question No: 2 ( Marks: 1 ) – Please choose one

Which of the following is NOT included in the strategic management model?

► Measure and evaluate performance

► Establish long-term objectives

► Develop mission and vision statements

► Perform internal research to identify customers

P#49

Question No: 3 ( Marks: 1 ) – Please choose one

Which component of a mission statement addresses the basic beliefs, values, aspirations, and ethical priorities of the firm?

► Technology

► Philosophy

► Customers

► Self-concept

Pg#17

Philosophy: What are the basic beliefs, values, aspirations, and ethical priorities of the firm?

 

Question No: 4 ( Marks: 1 ) – Please choose one

“Identifying and evaluating social, political, economic, technological and competitive trends and events”; which of the followings best describes this statement?

► Developing an effective mission statement

► Conducting an internal audit

► Performing an external audit

► Formulating strategy

Pg#29

To perform an external audit, a company first must gather competitive intelligence and information about social, cultural, demographic, environmental, economic, political, legal, governmental, and technological trends. Individuals can be asked to monitor various sources of information such as key magazines, trade journals, and newspapers

 Question No: 5 ( Marks: 1 ) – Please choose one

The purpose of an external audit is to prepare a list of which of the following?

► Opportunities and weaknesses

► Threats and strengths

► Opportunities and threats

► Strengths and weaknesses

Pg#29

The purpose of an external audit is to develop a finite list of opportunities that could benefit a firm and threats that should be avoided.

Question No: 6 ( Marks: 1 ) – Please choose one

Rehman industries, a leading firm of the industry is analyzing the technological forces for the firm which may provide it opportunities and threats for which stage/s of strategic management process?

► Strategy formulation

► Strategy implementation

► Strategy evaluation

► All of the given options

Technological forces represent major opportunities and threats that must be considered in formulating strategies.

Question No: 7 ( Marks: 1 ) – Please choose one

Use of the Internet and Internet technologies can be integrated into the sales of on-line as well as off-line business and marketing portion of the value chain through which of the following?

► Through software that permits customers to specify build-to-order options

► Through online product catalogs containing rich product information and specifications

► Via online price quotes and online announcements of special sales and promotions

► All of the given options

Question No: 8 ( Marks: 1 ) – Please choose one

Which of the following best describes this statement; “A systematic and ethical process for gathering and analyzing information about the competition’s activities and general business trends to further a business’ own goals”?

► External assessment

► Industry analysis

► Competitive intelligence program

► Business ethics

Pg#42

Competitive Intelligence Programs

Systematic and ethical process for gathering and analyzing information about the competition’s activities and general business

trends to further a business’ own goals.

Question No: 9 ( Marks: 1 ) – Please choose one

Which one of the following is NOT is a basic mission of a competitive intelligence program?

► To provide a general understanding of an industry

► To provide a general understanding of a company’s competitors

► To identify industry executives who could be hired by the firm

► To identify potential moves a competitor might make that would endanger a firm

P#43

Competitive Intelligence Programs and competitive analysis:

Systematic and ethical process for gathering and analyzing information about the competition’s activities and general business trends to further a business’ own goals.

Question No: 10 ( Marks: 1 ) – Please choose one

Which of the following statements is correct in relation to the Five Forces framework?

► The framework is a means of identifying the forces which affect the level of competition in an industry

► The framework identifies the major stakeholders of an organization

► The framework assists in developing a broad perspective on the environment within which an organization operates

► It is not appropriate in public sector management and for small organizations

Pg#143

Five forces — the bargaining power of customers, the bargaining power of suppliers, the threat of new entrants, and the threat of substitute products — combine with other variables to influence a fifth force, the level of competition in an industry. Each of these forces has several determinants:

Question No: 11 ( Marks: 1 ) – Please choose one

While preparing an External Factor Evaluation Matrix, a total score of 0.8 indicates that:

► Firm is taking advantages of strengths and avoiding threats

► Firm is taking no advantage of opportunities and is avoiding threats

► Firm is not taking advantages of opportunities and is not avoiding threats (right one)

► Firm is taking advantage of opportunities and is avoiding the threats

Question No: 12 ( Marks: 1 ) – Please choose one

Internal analysis involves gathering and analyzing information about all areas of a firm EXPECT:

► Research and development

► Management information system

► Marketing

► Competitors

Pg#49

Internal Audit is Parallels process of external audit. It gathers & assimilates information from:

o Management

o Marketing

o Finance/accounting

o Production/operations

o Research & development

o Management information systems

Question No: 13 ( Marks: 1 ) – Please choose one

All of the following are included in the five functions of the management process EXCEPT:

► Planning

► Organizing

► Leading

► Delegating

Management process functions:

Planning

Organizing

Leading

Controlling

Question No: 14 ( Marks: 1 ) – Please choose one

One of the top level manager of a large manufacturing plant uses to spend her day trying to ensure that the material wastage is not more than 10%. She spends her day in performing which of the following management functions?

► Planning

► Organizing

► Leading

► Controlling

Question No: 15 ( Marks: 1 ) – Please choose one

Waseem & Sons primarily want to gain control over the prices charged to consumers. What strategy will most likely be followed by Waseem & Sons?

► Market penetration

► Product development

► Forward integration

► Concentric Diversification

PG#81

Forward integration: Gaining ownership or increased control over distributors or retailers

Forward integration involves gaining ownership or increased control over distributors or retailers.

Question No: 16 ( Marks: 1 ) – Please choose one

The

IFE matrix summarizes and evaluates which factors in the functional areas of a business?

► Opportunities and threats

► Strengths and weaknesses

► Strengths and threats

► Opportunities and weaknesses

PG#47

A summary step in conducting an internal strategic-management audit is to construct an Internal Factor Evaluation (IFE) Matrix. This strategy-formulation tool summarizes and evaluates the major strengths and weaknesses in the functional areas of a business, and it also provides a basis for identifying and evaluating relationships among those areas.

Question No: 17 ( Marks: 1 ) – Please choose one

What is meant by Focused Differentiation?

► Concentrating on a particular feature of a product or service to achieve differentiation

► concentrating on differentiation as the primary means of achieving competitive advantage

► Providing a high perceived value product to a selected market segment which justifies a substantial price premium

► Simultaneously seeking to achieve differentiation and a price lower than that of competitors

Focus differentiation is about targeting a particular market segment.

Question No: 18 ( Marks: 1 ) – Please choose one

Khawar Garments, a domestic firm begins to export to India, it is an example of which of the following?

► Horizontal integration

► Market development

► Forward integration

► Concentric diversification

PG#90

Market Development

Introducing present products or services into new geographic area

Question No: 19 ( Marks: 1 ) – Please choose one

Under which of the following conditions, Concentric Diversification would be particularly an effective strategy to pursue?

► When an organization has grown so large so quickly that major internal reorganization is needed

► When sales of current products would increase intensively by adding the new related products

► When revenues from current products/services would increase significantly by adding the new unrelated products

► When current products are in maturity stage of the product life cycle(right one)

PG#91

Guidelines for Concentric Diversification

Five guidelines when concentric diversification may be an effective strategy are provided below:Five guidelines when concentric diversification may be an effective strategy are provided below:

Competes in no- or slow-growth industry

Adding new & related products increases sales of current products

New & related products offered at competitive prices

Current products are in decline stage of the product life cycle

Strong management team

Question No: 20 ( Marks: 1 ) – Please choose one

The company acquires or develops new products that could appeal to its current customer groups even though those new products may be technologically unrelated to the existing product lines. Which of the following best describes the statement?

► Retrenchment

► Horizontal diversification

► Market development

► Horizontal integration

PG#92

Adding new, unrelated products or services for present customers is called horizontal diversification.

Question No: 21 ( Marks: 1 ) – Please choose one

Abdullah Group of Industries is involved in the sale of its marginal business. It is most likely to say that Abdullah Group is implementing _____________________ strategy.

► Join venture

► Acquisition

► Liquidation

► Retrenchment

PG#93

During retrenchment, strategists work with limited resources and face pressure from shareholders, employees, and the media. Retrenchment can entail selling off land and buildings to raise needed cash, pruning product lines, closing marginal businesses, closing obsolete factories, automating processes, reducing the number of employees, and instituting expense control systems.

Question No: 22 ( Marks: 1 ) – Please choose one

Mergers and acquisitions are created for all of the following reasons EXCEPT:

► For gaining new technology

► For reduction of tax obligations

► For gaining economies of scale

► For increase in number of employees

Question No: 23 ( Marks: 1 ) – Please choose one

In which of the given phases of strategic management, strategies are put into action?

► Strategy formulation

► Strategy implementation

► Strategy evaluation

► All of the given options

PG#4

Strategy implementation is often called the action stage of strategic management. Implementing means

mobilizing employees and managers in order to put formulated strategies into action.

Question No: 24 ( Marks: 1 ) – Please choose one

______________ is the principle of conduct that guides decision-making.

► Human rights

► Business ethics

► The constitution

► Social responsibility

PG#14

Business Ethics and Strategic Management

Definition:

Business ethics can be defined as principles of conduct within organizations that guide decision making and behavior.

Question No: 25 ( Marks: 1 ) – Please choose one

Which of the following should be created first and foremost by a strategist?

► Strategy

► Objectives

► Vision

► Mission

Question No: 26 ( Marks: 1 ) – Please choose one

Which of the following is FALSE about vision and mission statements?

► Vision statement gives the overall purpose of an organization while a mission statement describes a picture of the preferred future

► A vision statement describes how the future will look if the organization achieves its mission and a mission statement explains what the organization does

► Mission statement answers the questions what is our business and the vision statement answers the question what do we want to become

► Mission statement explains the current position and activities of a firm whereas vision statement explains the future objective

Question No: 27 ( Marks: 1 ) – Please choose one

Which of the following is NOT a key question that can reveal internal strengths and weaknesses of the marketing department?

► Does the firm have effective sales?

► Are markets segmented effectively?

► Are the firm’s products and services priced appropriately?

► Does the firm have good liquidity? (right one)

PG#63

Marketing Audit Checklist of Questions

Similarly as provided earlier for management, the following questions about marketing are pertinent:

1. Are markets segmented effectively?

2. Is the organization positioned well among competitors?

3. Has the firm’s market share been increasing?

4. Are present channels of distribution reliable and cost-effective?

5. Does the firm have an effective sales organization?

6. Does the firm conduct market research?

7. Are product quality and customer service good?

8. Are the firm’s products and services priced appropriately?

9. Does the firm have an effective promotion, advertising, and publicity strategy?

10. Are marketing planning and budgeting effective?

11. Do the firm’s marketing managers have adequate experience and training?

Question No: 28 ( Marks: 1 ) – Please choose one

“A desired future state that the organization attempts to realize”. Identify the term relevant to the given statement.

► Goal (right one)

► Strategy

► Policy

► Procedure

A goal is a desired future state that the organization attempts to realize.2 Goals are important because organizations exist for a purpose and goals define

Question No: 29 ( Marks: 3 )

 

What activities are performed in strategy evaluation stage under controlling function of management?

 

Controlling function of management includes all those activities undertaken to ensure that actual operations conform to planned operations. Controlling function of management is particularly important for effective strategy evaluation. Controlling function of management has the following activities in strategy evaluation.

 

1. Establishing performance standards

2. Measuring individual and organizational performance

3. Taking corrective actions

4. Comparing actual performance to planned performance standards

 

Question No: 30 ( Marks: 3 )

In your opinion, what can be the circumstances when a Low Cost Producer in an industry brings effectiveness?

 

The circumstances will be for high cost producers because, when low cost producer come into market. Its costumers will be increased. Also low–cost producer would generally have a higher profit margin.

 

Question No: 31 ( Marks: 5 )

What are the major stakeholders that affect pricing decisions?

 

Following are the five major stakeholders which affect pricing decisions.

 

1. Governments

2. Suppliers

3. Distributors

4. Consumers

5. Competitors

 

Question No: 32 ( Marks: 5 )

Mergers or acquisitions are the methods by which two companies combine to form a larger company. What can be the reasons for acheiving mergers or acquisitions

 

Question No: 1 ( Marks: 1 ) – Please choose one

Various job titles of a strategist may include all of the following EXCEPT:

► Owner

► Foreman

► Chancellor

► Chief executive officer

Ref:

Strategists have various job titles, such as chief executive officer, president,

and owner, chair of the board, executive director, chancellor, dean, or entrepreneur.

Question No: 2 ( Marks: 1 ) – Please choose one

Long-term objectives includes all of the following EXCEPT:

► Measurable

► Reasonable

► Varying

► Consistent


The Nature of Long-Term Objectives

Objectives should be quantitative, measurable, realistic, understandable, challenging, hierarchical, obtainable, and congruent among organizational units.

Question No: 3 ( Marks: 1 ) – Please choose one

All of these are pitfalls of an organization in strategic planning EXCEPT:

► Failing to involve key employees in all phases of planning

► Using strategic planning to gain control over decisions and resources

► Using plans as a standard for measuring performance

► Being so formal in planning that flexibility and creativity are stifled

Ref:

Some pitfalls to watch for and avoid in strategic planning are provided below:

1. Using strategic planning to gain control over decisions and resources

2. Doing strategic planning only to satisfy accreditation or regulatory requirements

3. Too hastily moving from mission development to strategy formulation

4. Failing to communicate the plan to employees, who continue working in the dark

5. Top managers making many intuitive decisions that conflict with the formal plan

6. Top managers not actively supporting the strategic-planning process

7. Failing to use plans as a standard for measuring performance

8. Delegating planning to a “planner” rather than involving all managers

9. Failing to involve key employees in all phases of planning

10. Failing to create a collaborative climate supportive of change

11. Viewing planning to be unnecessary or unimportant

12. Becoming so engrossed in current problems that insufficient or no planning is done

13. Being so formal in planning that flexibility and creativity are stifled.

Question No: 4 ( Marks: 1 ) – Please choose one

The organizations that conduct business operations across national borders are known as:

► Multinational corporations

► Domestic firms

► Strategic alliances

► Franchises

Question No: 5 ( Marks: 1 ) – Please choose one

A mission statement should “reconcile interests among diverse stakeholders”. What does it mean?

► All shareholders must be satisfied

► Shareholders should be given preference over customers

► Firm will devote attention to meeting claims of various stakeholders

► Firm will devote its attention towards the maximization of shareholders value


Question No: 6 ( Marks: 1 ) – Please choose one

Which component of a mission statement addresses the basic beliefs, values, aspirations, and ethical priorities of the firm?

► Technology

► Philosophy

► Customers

► Self-concept

Ref:

6. Philosophy: What are the basic beliefs, values, aspirations, and ethical priorities of the firm?

Question No: 7 ( Marks: 1 ) – Please choose one

“Identifying and evaluating social, political, economic, technological and competitive trends and events”; which of the followings best describes this statement?

► Developing an effective mission statement

► Conducting an internal audit

► Performing an external audit

► Formulating strategy

Ref:

To perform an external audit, a company first must gather competitive intelligence and information about social, cultural, demographic, environmental, economic, political, legal, governmental, and technological rends. Individuals can be asked to monitor various sources of information such as key magazines, trade journals, and newspapers.

Question No: 8 ( Marks: 1 ) – Please choose one vuzs.net

Suppose, the value of the currency of a certain country falls, what can be the effect on companies in Different Industries and in Different Locations in that country respectively?

► Significant and equal

► Marginal and equal

► Significant and unequal

► Insignificant and unequal

 the value of the currency is fall for a certain country. It has over all  a significant effect. But it is not necessary that this effect will be  treated equally at the different industries and location of that country.

Question No: 9 ( Marks: 1 ) – Please choose one

What will happen to the Pakistani exports in overseas markets when there is a strong value of rupee?

► Pakistani exports will be less expensive

► Pakistani exports will be more expensive

► Pakistani exports will be more attractive

► Pakistani exports will be desirable

Question No: 10 ( Marks: 1 ) – Please choose one

Use of the Internet and Internet technologies can be integrated into the sales of on-line as well as off-line business and marketing portion of the value chain through which of the following?

► Through software that permits customers to specify build-to-order options

► Through online product catalogs containing rich product information and specifications

► Via online price quotes and online announcements of special sales and promotions

► All of the given options

Question No: 11 ( Marks: 1 ) – Please choose one

Assigning rating ‘2’ to an internal factor in IFE matrix indicates what?

► Major weakness

► Minor weakness

► Minor strength

► Major strength

Ref:

a minor weakness (rating = 2),

Question No: 12 ( Marks: 1 ) – Please choose one

As managers move up the organization, they perform which of the management function more?

► Leading

► Controlling

► Organizing

► Planning

In functional terms, as managers move up the organization, they do more planning and less direct supervising.

Question No: 13 ( Marks: 1 ) – Please choose one

Sana has spent a day in a session where the future of her company was discussed. The people involved were trying to determine what the role of their company was as the 21st century approaches. Goals were then developed based upon their vision of the company’s mission. Sana spent her day on which of the following process?

► Planning

► Organizing

► Leading

► Controlling

 

Question No: 14 ( Marks: 1 ) – Please choose one

One of the top level manager of a large manufacturing plant uses to spend her day trying to ensure that the material wastage is not more than 10%. She spends her day in performing which of the following management functions?

► Planning

► Organizing

► Leading

► Controlling

Question No: 15 ( Marks: 1 ) – Please choose one

Which of the following allows an organization to test alternative marketing plans and to forecast future sales of new products?

► Marketing

► Advertisement

► Test marketing

► Customer analysis

Ref:One of the most effective product and service planning techniques is test marketing. Test markets allow an organization to test alternative marketing plans and to forecast future sales of new products

Question No: 16 ( Marks: 1 ) – Please choose one

Which of the following has/have been successful in determining R&D budget allocations?

► Financing as many project proposals as possible

► Budgeting for R&D about what competitors spend

► Deciding how many successful new products are needed

► All of the given options

Ref:

Page no 71

Question No: 17 ( Marks: 1 ) – Please choose one

Which of the following is a drawback or limitation of Horizontal Integration?

► Synergies may be more imaginary than real

► It can increase suppliers’ and buyers’ bargaining power

► Economies of scale are likely to be decreased

► Both the first & third options are correct

Ref:

Disadvantage of Horizontal integration:

Synergies maybe more imaginary than real Substitutes market is often very different. Challenge occurs to management during acquisition. Reduction in competition may lead to anti-trust issues. http://ccit300.wikispaces.com/Horizontal+Integration

Question No: 18 ( Marks: 1 ) – Please choose one

In which situation would horizontal integration be an especially effective strategy?

► When an organization can gain monopolistic characteristics without being challenged by the federal government

► When decreased economies of scale provide major competitive advantages

► When an organization has neither the capital nor human talent needed to successfully manage an expanded organization

► When competitors are succeeding due to managerial expertise or having particular resources

Ref:

Horizontal Integration:

Seeking ownership or increased control over competitors Horizontal integration refers to a strategy of seeking ownership of or increased control over a firm’s competitors. One of the most significant trends in strategic management today is the increased use of horizontal integration as a growth strategy. Mergers, acquisitions, and takeovers among competitors allow for increased economies of scale and enhanced transfer of resources and competencies. Increased control over competitors means that you have to look for new opportunities either by the purchase of the new firm or hostile take over the other firm. One organization gains control of other which functioning within the same industry.

It should be done that every firm wants to increase its area of influence, market share and business.

Question No: 19 ( Marks: 1 ) – Please choose one

Defensive strategies include all of the following EXCEPT:

► Retrenchment

► Acquisition

► Divestiture

► Liquidation

Ref:

Defensive Strategies

In addition to integrative, intensive, and diversification strategies, organizations also could pursue retrenchment, divestiture, or liquidation.

Question No: 20 ( Marks: 1 ) – Please choose one

Which strategy should be implemented when a division is responsible for an organization’s overall poor performance?

► Divestiture

► Forward integration

► Cost leadership

► Related diversification

Question No: 21 ( Marks: 1 ) – Please choose one

Which of the following is NOT the reason to go for divestiture?

►  When firm has pursued retrenchment but failed to attain needed improvements

► When the availability of quality distributors is too limited

► When a division needs more resources than the firm can provide

► When a division is responsible for the firm’s overall poor performance

 

Question No: 22 ( Marks: 1 ) – Please choose one

A joining of two companies through one company buying more than one half of the other company’s stocks is known as:

► Monopolization

► A spin-off

► An acquisition

►A Merger

Question No: 23 ( Marks: 1 ) – Please choose one

Which of the following statements is TRUE about company’s strategies?

► Company strategies concern how to grow the business, how to out-compete rivals, how to satisfy customers

► Company strategies concern when to change the company’s strategic vision and business model

► Company strategies concern whether to focus on achieving short-run performance targets or on long-range

► Company strategies concern performance targets and how much organizational stretch to build in

Question No: 24 ( Marks: 1 ) – Please choose one

Which of the following is a key merit of strategic management?

► Strategic management enables an organization to be proactive

► Strategic management enables an organization to avoid the threats

► Strategic management enables an organization to defeat their competitors

►Strategic management enables an organization to foresee into the future

Ref:

Benefits of Strategic management

Following are the major benefits of Strategic management:

¾ Proactive in shaping firm’s future

¾ Initiate and influence actions

¾ Formulate better strategies (Systematic, logical, rational approach)

Question No: 25 ( Marks: 1 ) – Please choose one

Which of the following statements describes a company’s strategic vision?

► Gives a broad, aspiration image of the future that an organization is aiming to achieve

► Sets forth the long-range financial and strategic performance targets that organization seeks to achieve

► Indicates the boundaries of the company’s present business

► Reflects how strategic objectives are to be achieved

 

Question No: 26 ( Marks: 1 ) – Please choose one

Which of the following is NOT a key question that can reveal internal strengths and weaknesses of the marketing department?

► Does the firm have effective sales?

► Are markets segmented effectively?

► Are the firm’s products and services priced appropriately?

► Does the firm have good liquidity?

Question No: 27 ( Marks: 1 ) – Please choose one

The corporate social policy should be reaffirmed or changed during which phase of strategic management?

► Strategy control

► Strategy implementation

► Strategy formulation

► Strategy evaluation

Ref: Corporate social policy should be designed and articulated during strategy formulation, set and administered during strategy implementation, and reaffirmed or changed during strategy evaluation.(us,vuzs,03nov2010)

Question No: 28 ( Marks: 1 ) – Please choose one

All of the following are the circumstances when forward integration strategies are beneficial to be practiced EXCEPT:

► Availability of quality distributors is limited

► Existing markets for present products are saturated

► Advantages of stable production are high

► Present distributors have high profit margins

Question No: 29 ( Marks: 3 )

What is the significance of Research and Development for an organization?

Answer:

Research and Development

The fifth major area of internal operations that should be examined for specific strengths and weaknesses is research and development (R&D). Many firms today conduct no R&D, and yet many other companies depend on successful R&D activities for survival. Firms pursuing a product development strategy especially need to have a strong R&D orientation.

The purpose of research and development are as follows:

Development of new products before competition

Improving product quality

Improving manufacturing processes to reduce costs

Question No: 30 ( Marks: 3 )

What should be the characteristics of a firm that is successfully pursuing a Cost Leadership Strategy? Enlist any six of them.

Answer:

A successful cost leadership strategy usually permeates the entire firm, as evidenced by high efficiency, low overhead, limited perks, intolerance of waste, intensive screening of budget requests, wide spans of control, rewards linked to cost containment, and broad employee participation in cost control efforts.

Some risks of pursuing cost leadership are that competitors may imitate the strategy, thus driving overall industry profits down; technological breakthroughs in the industry may make the strategy ineffective; or buyer interest may swing to other differentiating features besides price. Several example firms that are well known for their low-cost leadership strategies are Wal-Mart, BIC, McDonald’s, Black and Decker, Lincoln Electric, and Briggs and Stratton.

Question No: 31 ( Marks: 5 )

What are the five forces of Porter’s Five Forces Model?

Question No: 32 ( Marks: 5 )

Explain Merger and Acquisition with the help of examples (examples should be related to a multinational or local company operating in Pakistan)? 

Question No: 1    ( Marks: 1 )    – Please choose one

 Which of the following can be considered as a factor of internal strengths and weaknesses of an organization?

 

► Technological changes

       ► Production/operations

► Demographics

► Competitive trends

 

Question No: 2    ( Marks: 1 )    – Please choose one

The objectives set by a manager should have which of the following characteristics?

► Should spell out how fast the company’s strategy is to be implemented

       ► Should be challenging and congruent among organizational units

► Should include long-range performance targets but not short-range targets

► Should include financial performance targets but not strategic performance targets

Objectives are essential for organizational success because they state direction; aid in evaluation; create synergy; reveal priorities; focus coordination; and provide a basis for effective planning, organizing, motivating and controlling activities. Objectives should be challenging, measurable, consistent, reasonable, and clear. In a multidimensional firm, objectives should be established for the overall company and for each division.

 

Question No: 3    ( Marks: 1 )    – Please choose one

 All of the following are the examples of a broad mission EXCEPT:

► The firm deals in beverages

       ► We sell quality skimmed milk

► Stationery is our product

► Company manufactures food items

Broad Mission:

Broad mission wider our mission values in terms of product and services, offered, market served, technology used and opportunity of growth. But main flow of this mission that if creates confusion among employee due to its wider sense.

 

Question No: 4    ( Marks: 1 )    – Please choose one

 Which of the following business actions is NOT considered to be unethical?

► Poor product or service safety

► Using non-union labor in a union shop

► Misleading advertising

       ► Too expensive products

 

PAGE 15: Some business actions always considered to be unethical include misleading advertising or labeling, causing environmental harm, poor product or service safety, padding expense accounts, insider trading, dumping banned or flawed products.

Question No: 5    ( Marks: 1 )    – Please choose one

 “A Good mission statement identifies the utility of a firm’s products to its customers”; which of the following represents this statement?

 

► Organization’s philosophy

► Customer orientation

       ► Social policy

► Declaration of attitude

 A Customer Orientation

Good mission statement identifies the utility of a firm’s products to its customers. This is why AT&T’s mission statement focuses on communication rather that on telephones’

 

Question No: 6    ( Marks: 1 )    – Please choose one

 Where an organization takes into account the effect of its strategic decisions on the society, the firm is taking care of:

► Corporate governance

► Business policy

► Business ethics

       ► Social policy

 

Question No: 7    ( Marks: 1 )    – Please choose one

 External assessment is performed in which of the following strategic-management phase?

       ► Strategy formulation stage

► Strategy implementation stage

► Strategy evaluation stage

► All of the given options

 

Question No: 8    ( Marks: 1 )    – Please choose one

 Suppose, the value of the currency of a certain country falls, what can be the effect on companies in Different Industries and in Different Locations in that country respectively?

 

► Significant and equal

► Marginal and equal

       ► Significant and unequal

► Insignificant and unequal 

Question No: 9    ( Marks: 1 )    – Please choose one

 What will happen to the Pakistani exports in overseas markets when there is a strong value of rupee?

► Pakistani exports will be less expensive

       ► Pakistani exports will be more expensive

► Pakistani exports will be more attractive

► Pakistani exports will be desirable

Question No: 10    ( Marks: 1 )    – Please choose one

 Local, state, and national elections, world oil, currency, and labor markets, number of patents, special tariffs are the examples of which one of the following?

► Economic forces

       ► Political, governmental, and legal forces

► Social, cultural and, demographic forces

► Competitive forces

Page 36: Impact of political variables on government regulations:

• Government regulation/deregulation
• Tax law changes
• Special tariffs
• Political Action Committees (PACs)
• Voter participation rates
• Number of patents
• Changes in patent laws 

Question No: 11    ( Marks: 1 )    – Please choose one

 Which one of the following is NOT is a basic mission of a competitive intelligence program?

► To provide a general understanding of an industry

► To provide a general understanding of a company’s competitors

       ► To identify industry executives who could be hired by the firm

► To identify potential moves a competitor might make that would endanger a firm

 

Question No: 12    ( Marks: 1 )    – Please choose one

Which of the following arise when a company can take advantage of conditions in its environment to formulate and implement strategies that enable it to become more profitable?

► Strengths

       ► Opportunities

► Weaknesses

► Threats

http://books.google.com/books?id=Sy8vejqbcocC&pg=PA52&lpg=PA52&dq=company+can+take+advantage+of+conditions+in+its+environment+to+formulate+and+implement+strategies+that+enable+it+to+become+more+profitable&source=bl&ots=lHKYX76rMZ&sig=F9YXtOqH

 

Question No: 13    ( Marks: 1 )    – Please choose one

 Assigning 1 rating to a key external factor indicates that:

► Response is superior

► Response is above average

► Response is average

       ► Response is poor

page44: Assign a 1-to-4 rating to each key external factor to indicate how effectively the firm’s current strategies respond to the factor, where = 5 the response is superior, 3 = the response is above average, 2 = the response is average, and 1 = the response is poor.

Question No: 14    ( Marks: 1 )    – Please choose one

 Assigning rating ‘2’ to an internal factor in IFE matrix indicates what?

► Major weakness

       ► Minor weakness

► Minor strength

► Major strength

page47: Assign a 1-to-4 rating to each factor to indicate whether that factor represents a major weakness (rating = 1), a minor weakness (rating = 2), a minor strength (rating = 3), or a major strength (rating = 4). Note that strengths must receive a 4 or 3 rating and weaknesses must receive a 1 or 2 rating.

Question No: 15    ( Marks: 1 )    – Please choose one

 Life-directing attitudes that serve as behavioral guidelines are known as:

       ► Values

► Rites

► Beliefs

► Sagas

Page 52: Values: Life-directing attitudes that serve as behavioral guidelines

Question No: 16    ( Marks: 1 )    – Please choose one

 Which of the following is the first step in the controlling function of management?

► Take corrective actions

► Restrict breaks employees take

► Evaluate expense reports

       ► Establish performance standards

 

Page 59: Controlling consists of four basic steps:

1. Establishing performance standards

2. Measuring individual and organizational performance

3. Comparing actual performance to planned performance standards

4. Taking corrective actions

Question No: 17    ( Marks: 1 )    – Please choose one

 The steps required to perform cost/benefit analysis include all BUT:

► Comparing the total costs with the total benefits

► Figure out the total costs associated with a decision

       ► Approximation of the total benefits from the decision

► Adding the total cost and total benefit

Page 63: Three steps are required to perform a cost/benefit analysis:

• Compute the total costs associated with a decision,
• Estimate the total benefits from the decision, and
• Compare the total costs with the total benefits.

Question No: 18    ( Marks: 1 )    – Please choose one

Which of the following ratios is least likely to be helpful in evaluating a firm’s decision regarding dividend?

► Earnings-per-share ratio

       ► Long-Term Debt-to-Equity Ratio

► Dividends-per-share ratio

► Price-earnings ratio

Question No: 19    ( Marks: 1 )    – Please choose one

 Which of the following is the first step in developing an IFE Matrix?

► Summing the weighted scores for each variable

       ► Identifying the organization’s strengths and weaknesses

► Identifying the organization’s functions of business

► Determining the lead strategist

 

Page75: Internal Factor Evaluation (IFE) Matrix. This strategy-formulation tool summarizes and evaluates the major strengths and weaknesses in the functional areas of a business, and it also provides a basis for identifying and evaluating relationships among those areas.

Question No: 20    ( Marks: 1 )    – Please choose one

 The business strategy decided upon by ABC Corporation is one that engages it in production of goods that are low in cost as compared to its competitors. ABC Company is perusing which one of the following strategy?

► Differentiation strategy

► Focus strategy

► Niche strategy

       ► Cost leadership strategy

Question No: 21    ( Marks: 1 )    – Please choose one

 The strategy embraced by Ahmad Bros. is to address the needs of a very selected and specialized market segment. Ahmad Bros. is most likely to engage in which one of the following types of strategy?

► Differentiation strategy

► Best value strategy

       ► Focus strategy

► Low cost strategy

Page87: Focus Strategy – Cost Focus

In this strategy the firm concentrates on a select few target markets. It is also called a focus strategy or niche strategy. It is hoped that by focusing your marketing efforts on one or two narrow market segments and tailoring your marketing mix to these specialized markets, you can better meet the needs of that target market.

 

Question No: 22    ( Marks: 1 )    – Please choose one

 Which of the following is NOT a situation when an organization should use an unrelated diversification strategy?

► When an organization’s present channels of distribution can be used to market the new products to current customers

       ► Revenues from current products/services would increase significantly by adding the new related products

► When an organization competes in a highly competitive and/or a no-growth industry

► When the new products have counter-cyclical sales patterns compared to an organization’s present products 

Question No: 23    ( Marks: 1 )    – Please choose one

 Smoothies Tire & Rubber Co. is selling its North American tire business to Avinza International, is an example of which type of strategy?

► Related diversification

► Retrenchment

       ► Divestiture

► Liquidation

Page 94: Divestiture

Selling a division or part of an organization is called divestiture. Divestiture often is used to raise capital for further strategic acquisitions or investments.

Question No: 24    ( Marks: 1 )    – Please choose one

 A joining of two companies through one company buying more than one half of the other company’s stocks is known as:

► Monopolization

       ► A spin-off

  ► An acquisition

► A merger

Question No: 25    ( Marks: 1 )    – Please choose one

 Which of the following environment includes all those factors which affect the organization and is itself affected by the organization?

       ► Task environment

► Social environment

► External environment

► Internal environment

Page 9: Task Environment:

Task environment includes all those factors which affect the organization and itself affected by the organization. These factor effects the specific related organizations. These factors are shareholders community, labor unions, creditor, customers, competitors, trade associations.

Question No: 26    ( Marks: 1 )    – Please choose one

 Which of the following is a key merit of strategic management?

       ► Strategic management enables an organization to be proactive

► Strategic management enables an organization to avoid the threats

► Strategic management enables an organization to defeat their competitors

► Strategic management enables an organization to foresee into the future

 

Page 11: Following are the major benefits of Strategic management:

• Proactive in shaping firm’s future
• Initiate and influence actions
• Formulate better strategies (Systematic, logical, rational approach)

 

Question No: 27    ( Marks: 1 )    – Please choose one

 Developing vision and mission statements is important because of the following reasons EXCEPT:

► They are the basis for allocating resources

       ► They are useful for large firms only

► They establish organizational culture

► They translate objectives into work structure

Question No: 28    ( Marks: 1 )    – Please choose one

 All of the following are the circumstances when forward integration strategies are beneficial to be practiced EXCEPT:

       ► Availability of quality distributors is limited

       ► Existing markets for present products are saturated

► Advantages of stable production are high

► Present distributors have high profit margins

(zh,vuzs,08dec10)

Page 82: Guidelines for the use of integration strategies:

Six guidelines when forward integration may be an especially effective strategy are:

• Present distributors are expensive, unreliable, or incapable of meeting firm’s needs
• Availability of quality distributors is limited
• When firm competes in an industry that is expected to grow markedly
• Organization has both capital and human resources needed to manage new business of distribution
• Advantages of stable production are high
• Present distributors have high profit margins

 

Question No: 29    ( Marks: 3 )

 What are the two basic types of R & D that can take place in an organization?

 

 

Question No: 30    ( Marks: 3 )

 Vertical integration is the degree to which the firm owns its upstream and its downstream buyers. What can be the possible benefits if the firm goes for vertical integration?

Question No: 31    ( Marks: 5 )

 Mr. Mansoor is a finance manager of a firm. He is asked to prepare a financial ratio analysis. What can be the possible limitations of his analysis?

Question No: 32    ( Marks: 5 )

 Mergers or acquisitions are the methods by which two companies combine to form a larger company. What can be the reasons for acheiving mergers or acquisitions?

Question No: 1   ( Marks: 1 ) – Please choose one

Various job titles of a strategist may include all of the following EXCEPT:

1. Owner
2. Foreman P6
3. Chancellor
4. Chief executive officer

Question No: 2   ( Marks: 1 ) – Please choose one

According to ‘Peter Drucker’, what is the prime task of strategic management?

1. To develop the vision of the business
2. Effectively evaluate the strategies
3. To think through the overall mission of a business P4
4. Develop alternative set of strategies

Question No: 3   ( Marks: 1 ) – Please choose one

Strategist is an individual who is involved in the strategic management process, thusmay be known as:

1. Member board of director
2. President P6
3. Division manager
4. All of the given options

Question No: 4   ( Marks: 1 ) – Please choose one

External opportunities and threats that can significantly benefit or harm an

organization may include all of the following EXCEPT:

1. Demographics
2. Competitive trends
3. Technological changes
4. Research and development P7

Question No: 5   ( Marks: 1 ) – Please choose one

the S & T Organization has an established “game plan” for its business operations. This  game  plan  reflects  the  company’s  awareness  of  how  and  where  it  should compete and against whom the competition should take place. It can be stated that this organization has an established

 

1. Goal    
2. Formality
3. Policy
4. Strategy

 

Question No: 6   ( Marks: 1 ) – Please choose one

Identify  the  term  that  is  known  as  a  “mean  of  providing  guidance  to  actions  and procedures, including how resources are to be allocated and how tasks assigned to the organization might be accomplished”.

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

Question No: 7   ( Marks: 1 ) – Please choose one

All of the following statements are true about a firm’s mission statement EXCEPT:

1. A mission statement directly contributes positively to financial performance
2. A mission statement does not directly contribute positively to financial performance
3. A mission statement should not provide useful criteria for selecting among alternative strategies
4. Primary reason to develop a mission statement is not to attract the customers

Question No: 8   ( Marks: 1 ) – Please choose one

All of the following external forces directly affect an organization EXCEPT:

1. Market segmentation strategies
2. Types of products/services offered
3. Management structure of an organization P28
4. Choice of businesses to acquire or sell

Question No: 9   ( Marks: 1 ) – Please choose one

“If a strategist has identified that the market growth rate is 8 %, the number of sellers in industry are 52 and the industry’s products are differentiated.” Which of the following industry’s success factor he is exploring?

1. Social forces
2. Competitive forces
3. Social forces
4. Economic forces

http://highered.mcgraw-hill.com/sites/0073530425/student_view0/chapter3/chapter_test.html

 

Question No: 10   ( Marks: 1 ) – Please choose one

Suppose, the value of the currency of a certain country falls, what can be the effecton companies in Different Industries and in Different Locations in that country respectively?

1. Significant and equal
2. Marginal and equal
3. Significant and unequal
4. Insignificant and unequal

Question No: 11   ( Marks: 1 ) – Please choose one

Which one variable falls under the category of the Social, Cultural, Demographic, and Environmental Variable?

1. Propensity of people to spend
2. Buying habits P34
3. Level of disposable income
4. Income differences by region

Question No: 12   ( Marks: 1 ) – Please choose one 

Local, state, and national elections, world oil, currency, and labor markets, number of patents, special tariffs are the examples of which one of the following?

1. Economic forces
2. Political, governmental, and legal forces P37
3. Social, cultural and, demographic forces
4. Competitive forces

Question No: 13   ( Marks: 1 ) – Please choose one 

Which  of  the  following  best  describes  this  statement;  “A  systematic  and  ethical process for gathering and analyzing information about the competition’s activitiesand general business trends to further a business’ own goals”?

1. External assessment
2. Industry analysis
3. Competitive intelligence program P43
4. Business ethics

Question No: 14   ( Marks: 1 ) – Please choose one 

Which of the following can be considered as barriers to entering a market or industry?

1. The lack of economies of scale and experience and low levels of brand loyalty
2. The presence of large number of rivals already in the industry
3. Relatively large capital requirements and industry have economies of scale
4. The absence of tariffs, trade restrictions, and/or government-mandated regulations

Question No: 15   ( Marks: 1 ) – Please choose one 

Supplier bargaining power is not likely to pose strong competitive pressure whenwhich of the following situation is prevailing?

1. Buying firms are looking for suppliers with superior just-in-time supply
2. capabilities and low prices   
3. The suppliers furnish a critical part or component that is in relatively short supply
4. Buying firms collaborate closely with their key suppliers to achieve mutual benefits
5. The products of alternative suppliers are highly differentiated, making the cost of switching relatively high

Question No: 16   ( Marks: 1 ) – Please choose one 

Which of the following is a collection of firms that offers similar products or services? such as IBM, Apple, and Dell?

Concentration

Industry

Corporation

Alliances

Question No: 17   ( Marks: 1 ) – Please choose one 

While preparing an External Factor Evaluation Matrix, a total score of 0.8 indicatesthat:

Firm is taking advantages of strengths and avoiding threats

Firm is taking no advantage of opportunities and is avoiding threats

Firm is not taking advantages of opportunities and is not avoiding threats P45

Firm is taking advantage of opportunities and is avoiding the threats

Question No: 18   ( Marks: 1 ) – Please choose one 

Assigning rating ‘2’ to an internal factor in IFE matrix indicates what?

Major weakness

Minor weakness P47 

Minor strength

Major strength

Question No: 19   ( Marks: 1 ) – Please choose one 

Which of the following are signs of weakness in a company’s competitive position?

(ANS Required)

A return-on-equity is below 25% and earnings per share is less than Rs. 2.00

A price set by the firm higher than the market leader

A declining market share, poor product quality and few sales in market

Lower revenues and profit margin and narrow product line than the market leader

 

Question No: 20   ( Marks: 1 ) – Please choose one 

What is the essential bridge between the present and the future that increases thelikelihood of achieving desired results

Motivating

Planning P54

Controlling

Organizing

 

Explanation:

Planning is the: Start of the process

Bridge between present and future, Increases likelihood of achieving desired results

 

Question No: 21   ( Marks: 1 ) – Please choose one 

Sana has spent a day in a session where the future of her company was discussed.

The people involved were trying to determine what the role of their company was asthe 21st century approaches. Goals were then developed based upon their vision ofthe company’s mission. Sana spent her day on which of the following process?

 

Planning

Organizing

Leading

Controlling

Question No: 22   ( Marks: 1 ) – Please choose one 

 

How Synergy can numerically be expressed?

2+2=3 (NAGATIVE)

2+2=0

2+2=4

2+2=5 POSITIVE SYNERGY

Ref: http://www.referenceforbusiness.com/management/Str-Ti/Synergy.html

Question No: 23   ( Marks: 1 ) – Please choose one 

Which of the following can reveal the demographic characteristics of an organization’s?

Customers?

Test marketing

Customer profiling  

Market development

Vision statement

Ref:

The information generated by customer analysis can be essential in developing an effective mission statement. Customer Profiles can reveal the demographic characteristics of an organization’s customers. P61

Question No: 24   ( Marks: 1 ) – Please choose one 

Test marketing is commonly applied by which of the following companies?

 

Industrial goods companies

 

Consumer goods companies P62

Public sector companies

Private sector companies

Question No: 25   ( Marks: 1 ) – Please choose one 

All of the following are the consideration for a company when conducting test

marketing EXCEPT:

What advertising channel should be used for test? P61

How many cities to include for test?

What information to collect during the test?

What action to take after the test has been completed?

Question No: 26   ( Marks: 1 ) – Please choose one 

 

Which of the following ratios is least likely to be helpful in evaluating a firm’s decision?

Regarding dividend?

Earnings-per-share ratio

Long-Term Debt-to-Equity Ratio

Dividends-per-share ratio

Price-earnings ratio

Ref:

Three financial ratios that are helpful in evaluating a firm’s dividend decisions are the earnings-per share Ratio, the dividends-per-share ratio, and the price-earnings ratio.

 

Question No: 27   ( Marks: 1 ) – Please choose one 

Debt-to-equity ratio is one of the types of which ratios?

Profitability

Leverage P65

Liquidity

Activity

Question No: 28   ( Marks: 1 ) – Please choose one 

In strategy formulation phase, what can be the problem when only financial ratios

are used to measure organizational performance?

They need to be compared with competitors’

They are only understandable by accountants

There are many different measures available

The measures are usually inconsistent

Financial measures need to be compared with competitors to have any value in a strategic sense

Question No: 29   ( Marks: 1 ) – Please choose one 

All of the following are functional support roles of Management Information System

EXCEPT:

Recording and storing accounting records

Recording and storing inventory data

Recording and storing business intelligence data

The enhanced ability to explore “what if” 

 

(See p82 Topic functional support roles)

 

Question No: 30   ( Marks: 1 ) – Please choose one 

—————— become/s information only  when it/they is/are evaluated, filtered,

condensed,  analyzed  and  organized  for  a  specific  purpose,  problem,  individual,  or

time.

Material

Data

Competitive advantages

Competitor analysis

Ref:

Data becomes information only when it is evaluated, filtered, condensed, analyzed, and organized for a specific purpose, problem, individual, or time

Question No: 31   ( Marks: 1 ) – Please choose one 

Which of the following is a drawback or limitation of Horizontal Integration?

Synergies may be more imaginary than real

It can increase suppliers’ and buyers’ bargaining power

Economies of scale are likely to be decreased

Both the first & third options are correct

Disadvantage of Horizontal integration:

Synergies maybe more imaginary than real

Substitutes market is often very different. Challenge occurs to management during acquisition.

Reduction in competition may lead to anti-trust issues.

Question No: 32   ( Marks: 1 ) – Please choose one 

The business strategy decided upon by ABC Corporation is one that engages it in

production  of  goods  that  are  low  in  cost  as  compared  to  its  competitors.  ABC

Company is perusing which one of the following strategy?

Differentiation strategy

Focus strategy

Niche strategy

Cost leadership strategy    (see topic p85)

Question No: 33   ( Marks: 1 ) – Please choose one 

Where   usage   rate   of   present   customers   of   the   company   can   be   increasedsignificantly  and  the  current  markets  are  not  saturated,  which  strategy  would  beeffective for the company to follow?

Market Penetration

Product Development

Market Development

Retrenchment

Ref:

Four guidelines when market penetration may be an especially effective strategy are:

Current markets not saturated

Usage rate of present customers can be increased significantly

Market shares of competitors declining while total industry sales increasing

Increased economies of scale provide major competitive advantages

 

Question No: 34   ( Marks: 1 ) – Please choose one 

Which of the followings involves the substantial modification of existing products orthe creation of new but related products that can be marketed to current customersthrough established channels?

 

Innovation

Differentiation

Product development

Market development

Ref:

Product development is a strategy that seeks increased sales by improving or modifying present products or services.

Question No: 35   ( Marks: 1 ) – Please choose one 

 

Rose Company markets new products or services that have no technological orcommercial synergies with current products, but which may appeal to new groupsof customers. Which strategy is being adopted by Rose Company?

Horizontal diversification

Horizontal integration

Conglomerate diversification

Backward integration

Explanation:

Conglomerate diversification means Adding new, unrelated products or services for new customer.

Question No: 36   ( Marks: 1 ) – Please choose one 

XYZ Corporation has decided to cut back on its product lines and to reduce the sizeof its operations because it can support no longer commitments needed to sustain it.

XYZ is going to pursue which of the following strategy?

Divestiture

Conglomerate diversification

Retrenchment

Liquidation

Retrenchment: Explanation

Regrouping through cost and asset reduction to reverse declining sales and Profit

Question No: 37   ( Marks: 1 ) – Please choose one 

Ahmad Textiles and Superior Textiles have come with each other in cross-manufacturing agreement, the firms are going for which of the following?

Liquidation

Acquisition

Joint venture (Not sure)

Takeover

Question No: 38   ( Marks: 1 ) – Please choose one 

Mergers and acquisitions are created for all of the following reasons EXCEPT:

For gaining new technology

For reduction of tax obligations

For gaining economies of scale

 

For increase in number of employees

 

Ref: Some of the potential advantages of mergers and acquisitions include achieving economies of scale, combining complementary resources, garnering tax advantages, and eliminating inefficiencies.

Question No: 39   ( Marks: 1 ) – Please choose one 

Which of the following enables the firm to create superior value for its customers

and superior profits for itself in comparison to its rival firms?

Competitive advantage

Comparative advantage

Differential advantage

Suitable advantage

(us,vuzs,dec10)

Question No: 40   ( Marks: 1 ) – Please choose one 

Non-financial benefits of strategic management include all of the following

EXCEPT:

Enhanced awareness of threats

Reduced resistance to change

Increase in sales P11

Better awareness of external threats

Question No: 41   ( Marks: 5 ) 

A good mission statement should include “Customer orientation”, what does it

mean? Explain it with the help of simple examples.

Question No: 42   ( Marks: 5 ) 

What  are  strengths  and  weaknesses  of  an  organization?  Explain  with  the  help  of

examples.

Question No: 1   ( Marks: 1 )   – Please choose one

Which of the following is an example of a narrow mission?

 

► We sell packaged pineapples

► The firm deals in beverages

► Stationery is our product

► Company manufactures food items

 

Question No: 2   ( Marks: 1 )   – Please choose one 

All of the following are the examples of a broad mission EXCEPT:

► The firm deals in beverages

► We sell quality skimmed milk

► Stationery is our product

► Company manufactures food items

 Question No: 3   ( Marks: 1 )   – Please choose one 

The organizations that conduct business operations across national borders are known as:

► Multinational corporations

► Domestic firms

► Strategic alliances

► Franchises

 

Question No: 4   ( Marks: 1 )   – Please choose one 

A mission statement should “reconcile interests among diverse stakeholders”. What does it mean?

► All shareholders must be satisfied

► Shareholders should be given preference over customers

► Firm will devote attention to meeting claims of various stakeholders

► Firm will devote its attention towards the maximization of shareholders value

 

Question No: 5   ( Marks: 1 )   – Please choose one 

Where an organization takes into account the effect of its strategic decisions on the society, the firm is taking care of:

► Corporate governance

► Business policy

► Business ethics

► Social policy

 

 Social issues mandate

that strategists consider not only what the organization owes its various stakeholders but also what

responsibilities the firm has to consumers, environmentalists, minorities, communities, and other groups. After decades of debate on the topic of social responsibility, many firms still struggle to determine appropriate social policies

Question No: 6   ( Marks: 1 )   – Please choose one 

External assessment is performed in which of the following strategic-management phase?

► Strategy formulation stage

► Strategy implementation stage

► Strategy evaluation stage

► All of the given options

 

Question No: 7   ( Marks: 1 )   – Please choose one 

Suppose, the value of the currency of a certain country falls, what can be the effect on companies in Different Industries and in Different Locations in that country respectively?

► Significant and equal

► Marginal and equal

► Significant and unequal

► Insignificant and unequal

 the value of the currency is fall for a certain country. It has over all  a significant effect. But it is not necessary that this effect will be  treated equally at the different industries and location of that country.

Question No: 8   ( Marks: 1 )   – Please choose one 

Which of the following is one of the Political, Governmental & Legal factors?

► Ethical concerns

► Traffic congestion

► Lobbying activities

► Average level of education

 

Political, Governmental, and Legal Forces

Government Regulation

Key opportunities & key threats

• Antitrust legislation (Microsoft)

• Tax rates

• Lobbying efforts

• Patent laws

 

Question No: 9   ( Marks: 1 )   – Please choose one 

Use of the Internet and Internet technologies can be integrated into the sales of on-line as well as off-line business and marketing portion of the value chain through which of the following?

► Through software that permits customers to specify build-to-order options

► Through online product catalogs containing rich product information and specifications

► Via online price quotes and online announcements of special sales and promotions

► All of the given options

 

Question No: 10   ( Marks: 1 )   – Please choose one 

Which of the following statement is TRUE about Internal audit?

► It is done parallel to external audit

► It is done before external audit

► It is done after external audit

► None of the given options

The process of performing an internal audit closely parallels the process of performing an external audit.

 Question No: 11   ( Marks: 1 )   – Please choose one 

All of the following are included in the five functions of the management process except:

► Planning

► Organizing

► Leading

► Delegating

 

Question No: 12   ( Marks: 1 )   – Please choose one 

Which of the following statement is correct about distinctive competence?

► Is usually tied closely to the ability of a company’s manufacturing capability and/or its proprietary technology and know-how

► Nearly always resides in the ability of the company’s assets on its balance sheet rather than in its people

► Is better suited in helping companies defend against external threats than in pursuing external market opportunities

► Is a unique thing that a firm does really well and that quality or attribute sets it aside from its competitors

 

Question No: 13   ( Marks: 1 )   – Please choose one 

Which of the following ratios is least likely to be helpful in evaluating a firm’s decision regarding dividend?

► Earnings-per-share ratio


► Long-Term Debt-to-Equity Ratio

► Dividends-per-share ratio


► Price-earnings ratio

Three financial ratios that are helpful in evaluating a firm’s dividend decisions are the earnings-per share ratio, the dividends-per-share ratio, and the price-earnings ratio.

 

Question No: 14   ( Marks: 1 )   – Please choose one 

Amir, a sole proprietor, uses the information system to ask the question; “What if the prices will decrease by 16% in the next year?” Which of the following functions the information system is performing for Amir?

► Functional support role

► Decisional support role

► Managerial support role

► Analytical supporting role

 

The decision support role

The business decision-making support function goes one step further. It becomes an integral part — even a vital part — of decision -making. It allows users to ask very powerful “What if…?” questions:

Question No: 15   ( Marks: 1 )   – Please choose one 

Assigning a rate=2 in IFE matrix indicates what?

► A major weakness

► A minor weakness

► A minor strength

► A major strength

 a minor weakness (rating  2),

Question No: 16   ( Marks: 1 )   – Please choose one 

Which of the following is sometimes referred as “the mystery approach to decision making, when subordinates are left to figure out what is happening and why”?

► Managing by hope

► Managing by extrapolation

► Managing by crisis

► Managing by subjectives

Managing by Subjective—built on the idea that there is no general plan for which way to go and what to do; just do the best you can to accomplish what you think should be done. In short, “Do your own thing, the best way you know how” (sometimes referred to as the mystery approach to decision making because subordinates are left to figure out what is happening and why).

Question No: 17   ( Marks: 1 )   – Please choose one 

The Web sites that sell products directly to the consumers are the examples of which type of strategy?

► Backward integration

► Product development

► Forward integration

► Horizontal integration

 http://vuzs.net/

Question No: 18   ( Marks: 1 )   – Please choose one

Khawar Garments, a domestic firm begins to export to India, it is an example of which of the following?

► Horizontal integration

► Market development

► Forward integration

► Concentric diversification

Market Development: Introducing present products or services into new geographic area

Question No: 19   ( Marks: 1 )   – Please choose one 

Which of the following is NOT a situation when an organization should use an unrelated diversification strategy?

► When an organization’s present channels of distribution can be used to market the new products to current customers

► Revenues from current products/services would increase significantly by adding the new related products

► When an organization competes in a highly competitive and/or a no-growth industry

► When the new products have counter-cyclical sales patterns compared to an organization’s present products

Let me explain what is unrelated diversification It is when a business adds new, or unrelated, product lines. For example, the  phone company might decide to go into the television business or into the radio business

(zh,vuzs.nov10)

 

Question No: 20   ( Marks: 1 )   – Please choose one 

Which strategy would be effective when the stockholders of a firm can minimize their losses by selling the organization’s assets?

► Liquidation

► Integration

► Differentiation

► Diversification

 

Question No: 21   ( Marks: 1 )   – Please choose one 

When both divestiture and retrenchment have been pursued unsuccessfully, which of the following strategies is effective to pursue?

► Forward integration

► Liquidation

► Merger

► Takeover

 Guidelines for Liquidation

Three guidelines when liquidation may be an especially effective strategy to pursue are:

When both retrenchment and divestiture have been pursued unsuccessfully

If the only alternative is bankruptcy, liquidation is an orderly alternative

When stockholders can minimize their losses by selling the firm’s assets

 

Question No: 22   ( Marks: 1 )   – Please choose one 

Which of the following enables the firm to create superior value for its customers and superior profits for itself in comparison to its rival firms?

► Competitive advantage

► Comparative advantage

► Differential advantage

► Suitable advantage

A competitive advantage exists when the firm is able to deliver the same benefits as competitors but at a lower cost (cost advantage), or deliver benefits that exceed those of competing products (differentiation advantage). Thus, a competitive advantage enables the firm to create superior value for its customers and superior profits for itself.

Question No: 23   ( Marks: 1 )   – Please choose one 

During which of the following periods, Strategic Management was considered to be cure for all problems?

► Mid 1960s to mid 1970s

► Mid 1970s to mid 1980s

► Mid 1980s to mid 1990s

► Mid 1950s to mid 1960s

 In 1960; s and 70 it was consider to be panacea for problems. But in 1980; s two important revolutions

Question No: 24   ( Marks: 1 )   – Please choose one 

In which of the given phases of strategic management, strategies are put into action?

► Strategy formulation

► Strategy implementation

► Strategy evaluation

► All of the given options

 

Question No: 25   ( Marks: 1 )   – Please choose one 

Which of the following is a key merit of strategic management?

► Strategic management enables an organization to be proactive

► Strategic management enables an organization to avoid the threats

► Strategic management enables an organization to defeat their competitors

► Strategic management enables an organization to foresee into the future

 Following are the major benefits of Strategic management:

Proactive in shaping firm’s future

Initiate and influence actions

Formulate better strategies (Systematic, logical, rational approach)

Question No: 26   ( Marks: 1 )   – Please choose one 

“If a strategist has identified that the market growth rate is 8 %, the number of sellers in industry are 52 and the industry’s products are differentiated.” Which of the following industry’s success factor is he exploring?

► Social forces

► Competitive forces

► Political forces

► Economic forces

Question No: 27   ( Marks: 1 )   – Please choose one

Which of the following is the decision support role of Management Information System?

► Processing marketing records into marketing plans

► Allowing users to ask “What if” questions

► Recording and storing such as human resource records

► Processing operations records into production schedules

 

Question No: 28   ( Marks: 1 )   – Please choose one

A series of ratios that measure the extent to which a firm has been financed by debt is known as:

► Activity ratios

► Leverage ratios

► Profitability ratios

► Liquidity ratios

Leverage ratios measure the extent to which a firm has been financed by debt.

Question No: 29   ( Marks: 3 )

Planning function is mostly carried out by managers in strategy formulation stage. What activities are performed under this function?

Answer:

Following functions are performed under strategy formulation stage:

1-Vision and Mission Statement (target of the organization)

2-Stregnths and Weaknesses.(Internal factors.)

3-Opportunities and Threats.(External factors)

Strategy formulation is concerned with setting long term goals and objectives , generating strategies to achieve those goals.

Question No: 30   ( Marks: 3 )

What should be the characteristics of a firm that is successfully pursuing a Cost Leadership Strategy? Enlist any six of them.

Answer:

Six characteristics of successfully persuing cost leadership strategy firm:

1-Limited perks.

2-High efficiency.

3- Low overhead.

4-Wide spans of control.

5-Intensive screening of budget.

6-Employees participation in cost control efforts.

Question No: 31   ( Marks: 5 )

List down and explain five steps that comprise an effective framework for conducting an IFE Matrix.

Steps involved in the development of IFE Matrix:

1-List any internal factors indentified in the internal audit . Only ten to twenty factors will be enough including strengths and weakness.Use percentage , ratios and comparative numbers.

2-Assign weights to each factor ranging from 0 to 1.The rates assigned indicate the relative importance of each factor to being successful.Sum of all weights must eb equal to 1.

3-Assign 1-4 rating to each factor to see whether the factor represents major weakness(rate=1) or minor weakness (rate=2) , minor strength (rate =3 ) or major strength (rate=4).

4- Multiply each factor`s weights to its ratings to determine its weighted score.

5-Sum the weighted score of each variable

 

Question No: 32   ( Marks: 5 )

Give at least two examples of multinational or local firms that are operating in Pakistan and have initiated backward integration. Justify your answer?

MGT603-Strategic  Management

Question No: 1   ( Marks: 1 )   – Please choose one 

Which of the following is the greatest advantage of international operations?

► Reduced tariffs and taxes

► Access to global business practices 

► Gaining new customers

► Less-intense competition

Question No: 2   ( Marks: 1 )   – Please choose one 

Which component of a mission statement addresses the basic beliefs, values, aspirations, and ethical priorities of the firm?

► Technology

►Philosophy 

► Customers

► Self-concept 

Question No: 3   ( Marks: 1 )   – Please choose one 

One of the important components of a mission statement is Technology, which of the following question is correct about technology as a mission component?

► Is the firm using technology for the manufacturing its products?

► Is the firm technologically current? 

► Is the firm producing technology oriented products (like electronics)?

► Is the firm using technology to deal with customer complaints?

Question No: 4   ( Marks: 1 )   – Please choose one 

The purpose of an external audit is to prepare a list of which of the following?

► Opportunities and weaknesses

► Threats and strengths

► Opportunities and threats 

► Strengths and weaknesses 

Question No: 5   ( Marks: 1 )   – Please choose one 

What will happen to the Pakistani exports in overseas markets when there is a strong value of rupee?

► Pakistani exports will be less expensive

► Pakistani exports will be more expensive 

► Pakistani exports will be more attractive

► Pakistani exports will be desirable 

Question No: 6   ( Marks: 1 )   – Please choose one 

Which of the following is TRUE about anti-trust legislation?

► The is the law intended to protect the ozone layer in the environment

► This is the law intended to regulate the tax rates in the economy

► This is the law intended to promote free competition in the market 

► This is the law intended to regulate and register the patents

 law intended to promote free competition in the market place by outlawing monopolies

Question No: 7   ( Marks: 1 )   – Please choose one 

Which of the following is one of the Political, Governmental & Legal factors?

► Ethical concerns

► Traffic congestion

► Lobbying activities 

► Average level of education 

Political, Governmental, and Legal Forces

Government Regulation

Key opportunities & key threats

• Antitrust legislation (Microsoft)

• Tax rates

• Lobbying efforts

• Patent laws

 

Question No: 8   ( Marks: 1 )   – Please choose one 

www.vuzs.net/

Which one of the following is NOT is a basic mission of a competitive intelligence program?

► To provide a general understanding of an industry

► To provide a general understanding of a company’s competitors 

► To identify industry executives who could be hired by the firm 

► To identify potential moves a competitor might make that would endanger a firm

 

Question No: 9   ( Marks: 1 )   – Please choose one 

Which one of the statements is a good example of the competitive power of substitute products?

► The competition between cellular phones and computers 

► The competition between Aspirin and joshanda

► The competition between contact lens and eyeglasses

► The competition between Amazon.com and traditional off-line bookstores

 Question No: 10   ( Marks: 1 )   – Please choose one 

In Porter’s Five Forces, the ‘threat of new entrants’ relates to which factor?

► Barriers to entry

► Substitutes

► Switching cost

► Buyer power

 

Question No: 11   ( Marks: 1 )   – Please choose one

Which one of the following best describes “a substitute product or service”?

► A competitor’s product or service

► An alternative way of meeting the same need

► A new entrant into the industry

► A less attractive way of meeting the same need

 

Question No: 12   ( Marks: 1 )   – Please choose one

Which of the following can be the strength of an organization?

► A developing market

► A new international market

► Loosening of regulation

► Strong management team

 

Question No: 13   ( Marks: 1 )   – Please choose one

What is Synergy?

► An act of formulating a program for a definite course of action

► When a team effort is used to achieve desired results

► When individuals work separately to achieve desired results

► When financial expectations of the firm are decided upon

 

Question No: 14   ( Marks: 1 )   – Please choose one

Which of the following function of management is concerned with span of control and chain of command?

► Planning

► Organizing

► Controlling

► Evaluating

 

Question No: 15   ( Marks: 1 )   – Please choose one

All of the following are the consideration for a company when conducting test marketing EXCEPT:

► What advertising channel should be used for test?

► How many cities to include for test?

► What information to collect during the test?

► What action to take after the test has been completed?

 

Question No: 16   ( Marks: 1 )   – Please choose one

The IFE matrix summarizes and evaluates which factors in the functional areas of a business?

► Opportunities and threats

► Strengths and weaknesses

► Strengths and threats

► Opportunities and weaknesses

 

Question No: 17   ( Marks: 1 )   – Please choose one

Which of the following is the first step in developing an IFE Matrix?

► Summing the weighted scores for each variable

►Identifying the organization’s strengths and weaknesses

► Identifying the organization’s functions of business

► Determining the lead strategist

 

Question No: 18   ( Marks: 1 )   – Please choose one

Which of these strategies is effective when the number of suppliers is small and the number of competitors is large?

► Conglomerate diversification

► Forward integration

► Backward integration

► Horizontal diversification

 

Guidelines for Backward Integration: 
Six guidelines when backward integration may be an especially effective strategy are:
. When present suppliers are expensive, unreliable, or incapable of meeting needs
. Number of suppliers is small and number of competitors large
. High growth in industry sector
. Firm has both capital and human resources to manage new business
. Advantages of stable prices are important
. Present supplies have high profit margins

Question No: 19   ( Marks: 1 )   – Please choose one

The strategy embraced by Ahmad Bros. is to address the needs of a very selected and specialized market segment. Ahmad Bros. is most likely to engage in which one of the following types of strategy?

► Differentiation strategy

► Best value strategy

► Focus strategy

► Low cost strategy

Question No: 20   ( Marks: 1 )   – Please choose one

Market penetration is one of the intensive strategies. Which one of the following best describes market penetration?

► Protecting and strengthening the organization’s sales by improving present products or services or developing new products

► Protecting and strengthening the organization’s position in new markets through its current products

► Protecting and strengthening the organization’s position in its current markets through its current products

► Protecting and strengthening the organization’s position by adding new, unrelated products for present customers

 

Question No: 21   ( Marks: 1 )   – Please choose one

Mostly large firms are initiating plans to acquire another unrelated business because it represents the most promising investment opportunity that is available to them. This type of strategic plan is known as:

► Conglomerate diversification

► Backward integration

► Concentric diversification

► Divestiture

Question No: 22   ( Marks: 1 )   – Please choose one

Ahmad Textiles and Superior Textiles have come with each other in cross-manufacturing agreement, the firms are going for which of the following?

► Liquidation

► Acquisition

► Joint venture

► Takeover

Question No: 23   ( Marks: 1 )   – Please choose one

When ABC Corporation makes decisions that assist it in formulating and implementing plans designed to achieve its objectives, it is most likely to engage in which one of the following?

► Strategic Management

► Strategy Utilization

► Strategic Processing

► Strategic Formality

 

Question No: 24   ( Marks: 1 )   – Please choose one

Adapting to change confronts an organization’s strategic management to which of the following issue(s):

► What kind of business we should be in?

► Are we in the right field?

► Should we reshape our business?

► All of the given options

 

Question No: 25   ( Marks: 1 )   – Please choose one

Non-financial benefits of strategic management include all of the following EXCEPT:

► Enhanced awareness of threats

► Reduced resistance to change

►Increase in sales

► Better awareness of external threats

 

Question No: 26   ( Marks: 1 )   – Please choose one

______________ is the principle of conduct that guides decision-making.

► Human rights

►Business ethics

► The constitution

► Social responsibility

 

Question No: 27   ( Marks: 1 )   – Please choose one

Which of the following should be created first and foremost by a strategist?

► Strategy

► Objectives

► Vision

► Mission

 

Question No: 28   ( Marks: 1 )   – Please choose one

Which of the following statements describes a company’s strategic vision?

 

► Gives a broad, aspiration image of the future that an organization is aiming to achieve

► Sets forth the long-range financial and strategic performance targets that organization seeks to achieve

► Indicates the boundaries of the company’s present business

► Reflects how strategic objectives are to be achieved

Question No: 29   ( Marks: 3 )

Explain test marketing and its significance for an organization.

Answer:

Test markets allow an organization to test alternative marketing plans and to forecast future sales of new products. In conducting a test market project, an organization must decide how many cities to include, which cities to include, how long to run the test, what information to collect during the test, and what action to take after the test has been completed. Test marketing is used more frequently by consumer goods companies than by industrial goods companies. Test marketing can allow an organization to avoid substantial losses by revealing weak products and ineffective marketing approaches before large-scale production begins.

Question No: 30   ( Marks: 3 )  Vertical integration is the degree to which the firm owns its upstream and its downstream buyers. What can be the possible benefits if the firm goes for vertical integration?

Answer: Benefits of vertical integration:

Allow a firm to gain control over: