Basic Corporate Strategy MCQ

3. Which of the following scenarios would NOT encourage a company to re-position itself within its market?

Significant change in economic climate

Entry into the market of a large new competitor

Sustained fall in sales

Reduced production costs

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4. Organizations often use a PEST analysis to identify the external factors by which they are affected.What does the 'S' of PEST stand for?

Systems

Social

Strengths

Services

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5. Which of the following refers to something that a particular organization does well?

Top Rank Objective

Key Performance Indicator

Core Competence

Critical Success Factor

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6. Which of the following outcomes is NOT typically associated with adopting 'Just-In-Time' principles?

Lower storage costs.

Lower employee motivation.

Heightened exposure to supplier reliability.

Enhanced cash flow.

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7. Which of the following is the correct expansion of the acronym 'KPI'?

Keeping People Interested

Key Performance Indicator

Keen Productivity Implementation

Kinds of Product Information

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8.

In which of the following issues might a labor union (trade union) be an important stakeholder?

i)Proposed changes to workers

i only

ii only

iii only

i and ii only

i and iii only 

ii and iii only

None of the above

All of the above 

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9. Which of the following best defines 'Market Segmentation'?

Deciding and preparing the marketing program for the target market.

Segregating people by the level of consumption.

Grouping people on the basis of similar needs.

Deciding the target market.

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10. Gleicher's 'Formula for Change' is written: D x V x F > R. What does the 'D' stand for?

Delay

Dissatisfaction

Difference

Denial

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11.

Which of the following statements is/are true?

i)Increased diversity amongst an organization's employees helps minimize the risk of 'groupthink'.

ii)Staff development activities may reduce retention rates.

Both (i) and (ii) are true.

Only (i) is true.

Only (ii) is true.

Neither is true.

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12. Dividing an organization's objectives into short-term, medium-term and long-term ones and tackling them in that order is known as:

staged planning

goal sequencing

layered tasking

target grouping

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13. Because the availability of some types of resources is limited, unit costs may, in the long run, rise as output increases. What is this phenomenon known as?

Diseconomy of scale

Disparity of costs

Inverse pricing

Elastic pricing

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14.

Which of the following statements is/are true?

i)Fluctuations in a company's share price do not necessarily mirror its overall performance.

ii)Introducing more KPIs will make an organization's performance monitoring more effective 

Both (i) and (ii) are true.  

Only (i) is true. 

Only (ii) is true. 

Neither is true.

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15. Demand curves are not typically smooth. Points on the curve that optimize demand and price are known as:

sales peaks

price points

zeniths

optima

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16. Under which of the following parameters would a company be most likely to adopt a "differentiation" strategy?

Low sales volume, strong brand identity

Low sales volume, weak brand identity

High sales volume, strong brand identity

High sales volume, weak brand identity

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17. Which of the following describes the term 'purchasing economies of scale'?

Customers benefitting from lower prices.

Outside expertise being brought in to enhance productivity.

Improved equipment being purchased to improve efficiency.

Costs being cut by bulk buying.

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18. A visual means of presenting a suite of performance measures is referred to as a:

Read-out

Balanced Scorecard

Dashboard

Graphical User Interface

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19. What is meant by the term 'zero-profit condition'?

The condition in which a company's income and overheads are exactly matched.

The criterion that decides whether an organization can be awarded charitable status.

The condition in which a company structures its income so that it avoids tax by making it appear that it does not make a profit.

Preventing the companies already in the market from making high profits where it is easy for new companies to enter a market,.

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20. A situation where a smaller company takes over a larger one and retains its brand is known as a:

hostile takeover

inverted takeover

obverse takeover

reverse takeover

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21. Which of the following is NOT a stage in the Kubler-Ross model, which describes the stages of people

Denial

Anger

Bargaining

Compromise

Acceptance

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22. A company's duty to consider the wider impact of its operations is known as:

Customer Relationship Management

Stakeholder Mapping

Strategic Planning

Corporate Social Responsibility

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23.

Which of the following statements is/are true?

i)'Process' change is best implemented independently of 'people' change.

ii)Introducing a change will tend to have a negative short-term impact.

Both (i) and (ii) are true.

Only (i) is true.

Only (ii) is true. 

Neither is true.

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24.

In which TWO of the following organizations would a 'Theory Y' approach to managing staff be most appropriate?

i)Customer service call centre

ii)Legal partnership

iii)Design studio

iv)Construction firm

i and ii only 

i and iii only

i and iv only

ii and iii only  

ii and iv only

iii and iv only

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25. Which apply to a market that is "price inelastic"?

A price cut causes the number of units sold to increase.

A price increase causes the number of units sold to increase.

A price increase causes total revenue to decrease.

A price cut causes total revenue to increase.

A price cut has no effect on the number of units sold.

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26. Which of the following is the best definition of the term 'stakeholder'?

Someone who owns shares in a business.

A person who has a right to say how an organization should be run.

A person or body affecting, or affected by, the organization.

Someone who is part of the supply chain of a business.

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27. Which of the following is NOT a typical benefit of high staff retention rates?

Reduced recruitment costs

Lower staff training costs

Increased innovation

Less disruption to operations

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28.

Which of the following is a / are reason/s to make use of external consultants?

i)The necessary expertise is not available within the organization.

ii)Buying consultant time is usually cheaper than making use of in-house staff.

iii)Consultants can make use of their experience with other organizations.

i only

ii only 

iii only

i and ii only 

i and iii only

ii and iii only

None of the above

All of the above 

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29. Which of the following is a disadvantage of maintaining a high Cash Asset Ratio (Liquidity Ratio)?

Inability to respond rapidly to new opportunities.

Lack of flexibility to meet unforeseen expenses.

Tendency for share price to decrease.

Having to incur opportunity cost of holding cash.

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30. What specifically is the purpose of a 'balanced scorecard'?

To assess the positives and negatives of a company's position.

To assign quantitative values to qualitative performance data.

To evaluate performance by incorporating the views of multiple stakeholders.

To measure performance across the full range of criteria.

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31.

Which of the following is an/are example/s of an 'input' measure?

i)Salary costs

ii)Cost of raw materials

iii)Sales

i only 

ii only

iii only

i and ii only  

i and iii only

ii and iii only 

None of the above

All of the above 

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32. Which document encapsulates the desired future state of an organization?

Strategic plan

Business plan

Mission statement

Vision statement

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33. What is meant by the term 'ideal vector' in relation to market positioning?

The set of attributes which consumers prefer to have in a product.

The fastest rate at which a company can grow without overreaching itself.

The size of a company that can be most efficient within a market.

The optimal margin that maximizes sales volume and profits.

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34. Which of the following describes the practice of of "short selling"?

Selling half of the shares owned in a company whose share-price is falling to reduce losses.

Selling shares owned in other companies to cover a fall in one company's share price.

Selling shares in a company that are not actually owned in the expectation that the price will decrease.

Selling shares in companies whose price has recently risen in order to realize the profits.

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35. The process of identifying the full range of an organization's stakeholders and their respective interests is known as stakeholder _______.

grouping

mapping

planning

engagement

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36. How is a company's 'Economic Value Added' (EVA) calculated?

By calculating percentage share price change over the year.

By dividing total revenue by fixed costs.

By calculating the annual change in the total assets of a company.

By deducting the opportunity cost of the capital invested from the net operating profit.

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37.

Which of the following statements is/are true?

i)Businesses should focus only on stockholderss' (shareholders') interests.

ii)As its owners, stockholders (shareholders) are responsible for the running of a company.

Both (i) and (ii) are true. 

Only (i) is true. 

Only (ii) is true. 

Neither is true. 

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38. Which of the following is not a potential problem associated with cost-benefit analysis?

Benefits may be intangible.

It may not incorporate the time value of money.

Costs cannot be quantified

It is often difficult to calculate the probability of a risk materializing.

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39.

One means of measuring the performance of an organization is to calculate its exposure to risk. Which TWO of the following factors should be multiplied to quantify risk?

i)Probability

ii)Scale

iii)Cost

iv)Impact

i and ii only  

i and iii only

i and iv only

ii and iii only

ii and iv only 

ii and iv only 

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40. What is meant by the term 'horizontal merger'?

Merger of two companies operating within the same sector.

Merger of two companies of similar size.

A merger where the board of the resultant company will comprise equal number of members from each of the original companies.

Merger of two companies which previously operated at different stages in the manufacture of the same product.

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41.

Which of the following statements is/are true?

i)Organizations should seek to keep staff turnover as low as possible.

ii)Employing staff on fixed-term contracts enables an organization to respond more dynamically to changing requirements.

Both (i) and (ii) are true.

Only (i) is true.

Only (ii) is true.  

Neither is true.

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42. Which of the following is the most appropriate level for the 'Quick' ('Acid-test') Ratio?

At least 10:1

Less than 10:1

At least 1:1

Less than 1:1

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43. Preparing for senior staff retirements so that suitably-skilled replacements are ready to take over their roles is known as:

Succession planning

Headhunting

Contingency planning

Backfilling

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44. Which of the following is NOT a reason for a company to outsource some of its functions to a spin-out company it has created?

The potential for cost reduction.

Encouraging entrepreneurship in that area.

Focusing on core competences.

Reducing risk in that area.

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45. What is meant by the term 'learning organization'?

One that has an effective internal staff training programme and takes a close interest in the development of its workforce.

One that is primarily involved in the education sector.

One that has recently been created and which has to become excellent by learning from its mistakes.

One that recognizes the fluidity of its business and adapts accordingly, continuously tracking its performance.

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46. A set of a company's stakeholders (e.g. its creditors) is known as a:

constituency

conglomerate

corporation

collocation

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47. Due to the time value of money, organizations may seek to cut costs by developing different elements of a new product at the same time rather than consecutively. Which of the following describes this approach?

'Concurrent development'

'Lean production'

'Simultaneous engineering'

'Just-in-time' production

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48.

Which of the following statements is/are  true?

i)Manufacturing-based companies generally hold more stock than service-based ones.

ii)Companies should always aim at maintaining a large volume of unused stock to avoid interruptions in production.

Both (i) and (ii) are true. 

Only (i) is true. 

Only (ii) is true.

Neither is true.

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49. An acquisition is described as a 'leveraged buyout' when:

the target's board opposes the acquisition.

the target's shareholders are offered a higher price to persuade them to sell.

the purchaser raises part of the capital through borrowing.

the purchase is being made by two or more collaborating companies.

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50.

Which of the following statements is/are true?

i)Recruiters should focus on selecting applicants with the skill set currently required by the employees.

ii)A person who has the requisite skills for a position but has not applied is known as a

Both (i) and (ii) are true. 

Only (i) is true. 

Only (ii) is true.   

Neither is true.

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51. According to the BCG matrix for portfolio analysis, what should a company do where a product has low market share and low growth rate?

Invest

Liquidate

Ignore

Exploit

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52. Which of the following relationships between two companies correspond to the 'symbiosis' model of takeover?

Low strategic interdependence, low need for autonomy

Low strategic interdependence, high need for autonomy

High strategic interdependence, low need for autonomy

High strategic interdependence, high need for autonomy

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53.

Which of the following are benefits of monitoring performance?

i)Lower administrative costs.

ii)Making the identification of problems easier.

iii)More accurate evaluation of the impact of new initiatives.

i only

ii only

iii only

i and ii only  

i and iii only 

ii and iii only

None of the above

All of the above 

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54.

Which of the following statements is/are true?

i)Regulatory bodies may block a merger to prevent the creation of a monopoly.

ii)Mergers may not involve a cash payment to the target

Both (i) and (ii) are true.

Only (i) is true.

Only (ii) is true.

Neither is true.

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55. What is meant by the term 'lobster trap'?

A provision to hinder hostile takeovers.

A means of artificially inflating the price of a share.

A takeover target that is not as good value as it might appear.

A clause that prevents a partner from pulling out of a merger.

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56.

Which of the following statements is/are true?

i)All measures should be reported to the senior management.

ii)Decisions should be made on the basis of quantitative data alone.

Both (i) and (ii) are true.

Only (i) is true.

Only (ii) is true.

Neither is true.

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57.

Which of the following statements is/are true?

i)A Private Finance Initiative (PFI) involves a public-sector organization purchasing services from a private-sector company.

ii)PFI contracts tend to be of less than ten years

Both (i) and (ii) are true. 

Only (i) is true.

Only (ii) is true.

Neither is true. 

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58. It is difficult for new companies to break into some markets due to factors like expensive infrastructure being required. What are these termed?

Starting overheads

Set-up costs

Barriers to entry

Initial outlay

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59. Which of the following best describes "scenario planning" as a planning tool?

Considering multiple possible outcomes so that the organization can respond to a range of eventualities.

Focusing efforts on the most likely outcome so that the organization is ready to respond.

Using comparisons with past examples to predict likely outcomes.

Preparing a detailed plan that addresses each stage of a particular scenario.

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60.

The 'Peter Principle' states that employees are promoted to their 'level of incompetence'. 

Which of the following are valid approaches to avoiding this conundrum?

i)Never promoting staff, but simply paying them gradually more for their current position.

ii)Assessing employees' suitability for the new post rather than their competence in the existing one.

iii)Introducing more flexible pay structures.

i only

ii only

iii only

i and ii only

i and iii only

ii and iii only 

None of the above

All of the above

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61.

Which of the following statements is/are true?

i)A change 'programme' comprises multiple independent projects.

ii)A change 'programme' should incorporate additional elements such as marketing and training.

Both (i) and (ii) are true.

Only (i) is true. 

Only (ii) is true.

Neither is true.

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62. People can react very differently to change in an organization. Which of the following best describes a 'change evangelist'?

Someone who strongly opposes the change.

Someone who believes other things are more important.

Someone who tries to persuade others that the change is positive.

Someone who understands the true implications of the change.

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63.

Which of the following is an/are 'exit barrier/s'?

i)Redundancy costs

ii)Non-transferable fIxed assets

iii)Ongoing contracts

i only

ii only

iii only

i and ii only

i and iii only

ii and iii only

None of the above

All of the above 

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64. Which of the following is the ADKAR model for individual change management?

Reinforcement

Rules

Realization

Respect

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65. Which of the following is NOT a means of valuing a company?

Historical earnings valuation

Sales valuation

Discounted cash flow valuation

Asset valuation

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66.

Which of the following is a / are reason/s for effecting a merger?

i)Synergies between the companies

ii)Potential for cross-selling

iii)Economies of scale

ii only

iii only

i and ii only

i and iii only

ii and iii only

None of the above

All of the above

Answer

Correct Answer:

All of the above

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67.

Which of the following would be regarded as stakeholders in a steel mill?

i)Stockholders (shareholders)

ii)Customers

iii)Employees

i only

ii only

iii only

i and ii only

i and iii only

ii and iii only

None of the above

All of the above 

Answer

Correct Answer:

All of the above 

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68. Which of the following would NOT be a sensible course of action if a company found that demand was exceeding supply?

Increasing production capacity.

Setting up a waiting list.

Outsourcing some production.

Increasing the marketing budget.

Answer

Correct Answer: Increasing the marketing budget.

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69. Organizations may adopt 'time-based management' to improve efficiency. What does this approach involve?

Reducing focus on cost and quality to prioritize schedule.

Decreasing the time taken to develop, launch and manufacture a product.

Timing staff productivity to identify potential process improvements.

The use of IT-based tools to manage schedules.

Answer

Correct Answer: Decreasing the time taken to develop, launch and manufacture a product.

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70.

Which of the following statements is/are true?

i)The local community is relevant as a stakeholder only for public-sector organizations.

ii)Investing resources in addressing local environmental concerns need not have an adverse effect on bottom-line performance.

Both (i) and (ii) are true. 

Only (i) is true.

Only (ii) is true.

Neither is true.

Answer

Correct Answer:

Only (ii) is true.

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71. Which of the following is NOT a reason for a production manager to benchmark output volumes?

Comparing productivity with that of the rivals.

Improving product specification.

Motivating employees involved in production.

Increasing productivity.

Answer

Correct Answer: Improving product specification.

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72. What style of change is referred to by the Japanese term 'Kaizen'?

Transformational change

Continuous improvement

People-focused change

Technology-driven change

Answer

Correct Answer: Continuous improvement

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73. In which of the following planning situations is applying 'game theory' likely to be of least value?

Planning a marketing campaign.

Preparing for contract negotiations.

Undertaking a future market analysis.

Assessing the viability of a new business model.

Answer

Correct Answer: Planning a marketing campaign.

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74. Which of the following is NOT an element in Porter'five forces analysis'?

Bargaining power of suppliers

Threat of economic climate

Threat of new entrants

Bargaining power of customers

Answer

Correct Answer: Threat of economic climate

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75. Organizations typically monitor the 'defect rate' of their production processes. What type of measure is this?

Input

Output

Outcome

None of the above

Answer

Correct Answer: Output

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76. What is meant by the practice of 'triangulation' in relation to currency trading?

Hedging by converting one currency into two different ones rather than just a simple one-to-one exchange.

Trading between three currencies to exploit situations where relative values do not change proportionally.

Minimizing risk by never trading more than a third of the capital available at a time.

Always seeking external corroboration of factors that may cause currency fluctuation.

Answer

Correct Answer: Trading between three currencies to exploit situations where relative values do not change proportionally.

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77. Speed-based strategies focus on allowing the business to meet customer needs more quickly than competitors. Which of the following is an important activity to implementing a speed-based strategy?

Decreasing product development cycles.

Using automation to perform certain tasks.

Increasing customer responsiveness.

Working closely with suppliers and even requesting suppliers to locate near distribution centers.

Answer

Correct Answer: Decreasing product development cycles.

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78. What duration should a firm undertake to achieve organizational stability?

A long duration at first, followed by a short duration.

A long duration.

A very limited duration.

A company should never achieve organizational stability.

Answer

Correct Answer: A very limited duration.

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79. When a firm engages in product-market exploration strategies, how is its focus shifting?

The firm is focusing on hostile takeovers

The firm is expanding internationally

The firm is focusing primarily on its current products and their current markets

The firm is focusing on developing new products and entering new markets

Answer

Correct Answer: The firm is focusing primarily on its current products and their current markets

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80. What are the two traits of corporate strategy?

Diversification and Vertical Integration

Vertical Integration and Horizontal Integration

Diversification and Horizontal Integration

Answer

Correct Answer: Diversification and Vertical Integration

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81. Which of the following is not a social factor of the PEST analysis?

Career Attitudes

Safety

Population growth rate

Economic growth

Answer

Correct Answer: Economic growth

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82. What type of strategy attempts to answer the question: "How should we compete against a particular organization?"

industry level strategy

positioning strategy

corporate strategy

firm level strategy

Answer

Correct Answer: firm level strategy

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83. What is a competitive advantage?

Something that allows an organization to differentiate itself from others.

Something that allows an organization to achieve sales revenues that are greater than the industry average.

Something that allows an organization acess to greater market share.

Something that allows an organization to achieve profitability that is greater than the industry average.

Answer

Correct Answer: Something that allows an organization to achieve profitability that is greater than the industry average.

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84. How many steps are there in the business process improvement analysis?

5

7

8

6

Answer

Correct Answer: 6

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85. Which of the following barriers to change can be overcome by involving affects parties in the change process as closely as possible?

fear of loss

excessive focus on costs

failure to perceive benefits

organizational politics

Answer

Correct Answer: fear of loss

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86. What does the M stand for in the MOST Business Analysis?

Market

Matrix

Margin

Mission

Answer

Correct Answer: Mission

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87. Allocating capital throughout a diverse portfolio allows corporations to achieve what objective?

Corporate synergy

Corporate synthesis

Corporate diversification

Corporate advantage

Answer

Correct Answer: Corporate synergy

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88. Which of the following is part of John Kay's value chain concept?

Cost minimization

Innovation

Market focus

Product differentiation

Answer

Correct Answer: Innovation

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89. Which of the following is not a major perspective of the balanced scorecard?

employee performance indicators

financial

business process indicators

customer service indicators

Answer

Correct Answer: employee performance indicators

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90. As a consequence of majority accounting scandals in the early 2000's, U.S. corporations have been forced to modify their existing governance structure. Which of the following represents the most significant change to the governance structure of U.S. corporations?

The increased role of the corporate internal auditor.

Chief executive officers must now sign off financial results.

Internal corporate auditors must now review all financial reports generates by corporate accountants.

Chief financial officers now report directly to the board of directors.

Answer

Correct Answer: The increased role of the corporate internal auditor.

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91. Of the following, which would benefit most from corporate strategy?

Coca-Cola

Wrigley

New Belgium Brewing

Kraft General Foods

Answer

Correct Answer: Kraft General Foods

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92. What is the term for a strategy where a business seeks to establish a long-term competitive advantage by improving value chain activities that substantially lower costs?

market penetration strategy

loss leader strategy

low-cost strategy

value chain strategy

Answer

Correct Answer: low-cost strategy

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93. What is an example of horizontal integration?

Walmart buying the excess of an overproduced competitor product and selling it as a Great Value brand

Walmart creating and outselling a competitors product

Walmart recognizing a competitor has overproduced and producing more than their competitor

K-Mart buying a competing company and rebranding the competitors products as their own

Answer

Correct Answer: Walmart buying the excess of an overproduced competitor product and selling it as a Great Value brand

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94. True or False? NACIS is a measurement of diversification.

True

False

Answer

Correct Answer: True

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95. What does it mean to integrate horizontally?

A corporation buys its competition

A corporation collaborates with its competition

A corporation defeats its competition

A corporation competes with its competition

Answer

Correct Answer: A corporation collaborates with its competition

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96. Which of the following is a economic value trait?

Success rate

GNP

Income

Sustainability

Answer

Correct Answer: GNP

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97. When a firm engages in unrelated diversification, what kind of market are they expanding into?

A market that is failing

A market with a different business core, but similar products

A market with a similar business core and similar products

A market without a strategic fit or theme

Answer

Correct Answer: A market without a strategic fit or theme

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98. What method of operation the production of standardized products that can be produced prior to receiving customer orders?

assemble-to-order operations

continuious-flow operations

make-to-stock operations

make-to-order operations

Answer

Correct Answer: make-to-stock operations

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99. A firm replacing suppliers is vertically integrating ________________.

Balanced

Downstream

Upstream

Horizontal

Answer

Correct Answer: Upstream

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100. What does the L stand for in the PESTLE Analysis?

Legal

Liability

Law

Loss

Answer

Correct Answer: Legal

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101. The Heptalysis Analysis is an early stage business/venture analysis using how many categories?

8

7

4

5

Answer

Correct Answer: 7

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102. Can a business strategy be interchangeable with a corporate strategy?

Yes. It is directly interchangeable.

No. A corporate strategy has to focus globally, while business strategy focuses on individual units.

Yes. One can be scaled into the other.

Yes. The main difference is that business strategy aspires to be corporate strategy.

Answer

Correct Answer: No. A corporate strategy has to focus globally, while business strategy focuses on individual units.

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103. Which of the following is not a component to managing performance through management by objectives (MBO)?

Establishing specific, difficult, and objectives goals.

Managers and employees working together to set mutually agreeable goals.

Agreeing on rewards that are likely to increase employee motivation.

Managers monitor progress and provide feedback during the assessment period.

Answer

Correct Answer: Agreeing on rewards that are likely to increase employee motivation.

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104. What BCG Matrix strategy calls for reducing investment in a product to maximize profits and produce positive cash flows?

Harvest strategy

Hold strategy

Build market share strategy

Divestiture strategy

Answer

Correct Answer: Harvest strategy

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105. There are two major types of diversification. What are they?

Related and unrelated

Static and dynamic

National and international

Strategic and non-strategic

Answer

Correct Answer: Related and unrelated

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106. Which error in decision-making typically results when managers have already devoted significant resources to a project but have yet to see financial results?

recency bias

illusions of control

escalation of commitment

prior hypothesis bias

Answer

Correct Answer: escalation of commitment

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107. Which of the following is true regarding the impact of diversification on an organization's performance?

An organization's performance generally increases as it shifts from a related diversification strategy to a single-product strategy.

An organization's performance generally decreases as it shifts from a single-product strategy to related diversification strategy.

An organization's performance generally decreases as it shifts from a related diversification strategy to an unrelated diversification strategy.

An organization's performance generally increases as it shifts from a related diversification strategy to an unrelated diversification strategy.

Answer

Correct Answer: An organization's performance generally decreases as it shifts from a related diversification strategy to an unrelated diversification strategy.

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108. Which of the following is a potential detriment to concentration strategies?

The price of their stock plummeting.

A firm may lose its competitive advantage by expanding into unknown markets and developing unfamiliar products.

A firm may generate unexpected competition from other businesses.

International expansion.

Answer

Correct Answer: A firm may lose its competitive advantage by expanding into unknown markets and developing unfamiliar products.

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109. Which of the following is not considered to be a level of strategy in an organization?

operational strategy

functional strategy

corporate stategy

strategic business unit strategy

Answer

Correct Answer: functional strategy

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110. What is inventory turnover?

The number of times annually that a company sells its average inventory.

Inventory that is stolen, damaged, or returned as defective.

The dollar value of the inventory sold within 30 days.

The number of days required to sell through a company's average inventory.

Answer

Correct Answer: The number of times annually that a company sells its average inventory.

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111. Which of the following is generally considered the first step to implementing results-driven change?

Eliminating those impediments or forces that prevent change and ecourage the status quo.

Stressing the importance of change in the organization.

Soliciting input from employees on how to increase performance.

Setting measurable short-term goals to improve performance

Answer

Correct Answer: Setting measurable short-term goals to improve performance

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112. Why is performing a gap analysis helpful in the change process?

Because it forces an organization to identify both its current and desired state of being.

Because it helps to convince employees that the change is positive.

Because doing so outlines the necessary steps to implement the change.

Because it forces an organization to identify those forces that need to be overcome to implement the change.

Answer

Correct Answer: Because it forces an organization to identify both its current and desired state of being.

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113. When growth is vertical, what does this mean for a corporation?

It means that they're developing new products

It means that the products the company sells are from a single product line

It means that the corporation has expanded beyond primary business

It means that the corporation has expanded abroad

Answer

Correct Answer: It means that the corporation has expanded beyond primary business

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114. What is corporate governance framework?

Corporate governance framework dictates the rules and practices necessary for environmental compliance.

Corporate governance framework defines the rules and practices necessary for strategic advancement.

Corporate governance framework defines the federal regulations and practices necessary for ethical compliance.

Corporate governance framework defines the rules and practices necessary for ethical compliance.

Answer

Correct Answer: Corporate governance framework defines the rules and practices necessary for ethical compliance.

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115. Which of the following statements best describes corporate strategy?

How a company allocates resoures across different businesses.

How a company organizes itself.

How a company manages a diversified portfolio of products.

How a company creates value across different businesses.

Answer

Correct Answer: How a company creates value across different businesses.

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116. According to Michael Porter's five forces, what is the impact of increased buyer power?

Increased number of new entrants into the market.

Reduced business profitability as buyers exert downward pressure on prices.

Consolidation among established organizations as they look to increase control over prices.

Increased product differentiation as organizations look to other ways to maintain control over prices.

Answer

Correct Answer: Reduced business profitability as buyers exert downward pressure on prices.

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117. What are products that occupy the low market share and low growth quadrant of the BCG Matrix called?

Cash cows

Dogs

Question marks

Stars

Answer

Correct Answer: Dogs

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118. Why are products identified as 'question marks' in the BCG Matrix challenging for management?

They possess low market growth and thus have limited potential.

They possess significicant market share and management may not have the resources to leverage them.

They are unprofitable.

They could develop into 'stars', but they can also turn into 'dogs'.

Answer

Correct Answer: They could develop into 'stars', but they can also turn into 'dogs'.

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119. Developed by Kurt Lewin, the force field analysis helps managers identify the forces that encourage and prevent change in their organizations. According to the force field analysis, how should managers implement change?

By increasing or holding constant driving forces and decreasing restraining forces.

By increasing restraining forces and holding driving forces constant.

By increasing restraining forces and decreasing driving forces.

By increasing driving forces and restraining forces.

Answer

Correct Answer: By increasing or holding constant driving forces and decreasing restraining forces.

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120. What is the difference between earnings per share and diluted earnings per share?

Diluted earnings per share includes outstanding common stock and all convertible securities.

Diluted earnings per share does not assume all convertible securities are exercised.

Earnings per share includes warrants and convertible securites.

Earnings per share includes the stock options of employees.

Answer

Correct Answer: Diluted earnings per share includes outstanding common stock and all convertible securities.

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121. Why would a corporation choose to focus on related diversification?

Related diversification allows a company to diversify and share facilities and resources to reduce costs

Related diversification poses no benefit because the company has already dominated the market it is in

Related diversification allows a company to expand into exactly the same market it is in

A company cannot utilize related diversification as a strategy because it is redundant to use similar facilities to produce their products

Answer

Correct Answer: Related diversification allows a company to diversify and share facilities and resources to reduce costs

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122. What is a characteristic of a firm that is ideal for diversification?

A firm that is deeply in debt

A firm that has the excess resources and capabilities to expand profitability

A firm that is earning enough to break even

A firm who recently began selling public stock

Answer

Correct Answer: A firm that has the excess resources and capabilities to expand profitability

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123. What is the purpose of the poison pill?

To prevent a hostile takeover.

To provide instant profits to investors.

To make the corporation appear more attractive to a prospective buyer.

To increase long-term profitability.

Answer

Correct Answer: To prevent a hostile takeover.

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124. Which one of the following are Porter's generic strategies

Segmentation Strategy

(All of these)

Cost Leadership

Differentiation Strategy

Answer

Correct Answer: (All of these)

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125. True or False? The Business Process Improvement system is an approach to help a company achieve efficient results.

True

False

Answer

Correct Answer: True

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126. What is the process where one company purchases another and absorbs it into its existing operations?

divestiture

merger

liquidation

acquisition

Answer

Correct Answer: acquisition

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127. Which of the following is a business function of the value chain?

(All of these)

Production

Marketing and Sales

Research and Development

Answer

Correct Answer: (All of these)

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128. What is an example of a benefit gained from corporate governance framework?

A decrease in environmental concerns that allows companies to earn more profits

Increased revenues and stock options

Ethical operations and good relationships with stakeholders ensure that all interested parties work towards a collective strategy

A relaxing of ethical concerns which allows corporations to earn more profits

Answer

Correct Answer: Ethical operations and good relationships with stakeholders ensure that all interested parties work towards a collective strategy

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129. True or False? Benchmarking is comparing a firm's business metrics to the industry's bests.

False

True

Answer

Correct Answer: True

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130. What company-wide message is delivered to describe a corporation's reason to exist?

Marketing strategy

Motto

Slogan

Mission Statement

Answer

Correct Answer: Mission Statement

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131. What is an example of a long-term consideration of a strategic corporation?

Future market entry, and mergers and acquisitions

Quarterly sales objectives

Annual performance

Quarterly earnings

Answer

Correct Answer: Future market entry, and mergers and acquisitions

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132. What is organizational stability?

Organizational stability is when a firm maintains its current size

Organizational stability is when a firm expands its size

Organizational stability is when a firm acquires another business

Organizational stability is when a firm diversifies its market

Answer

Correct Answer: Organizational stability is when a firm maintains its current size

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133. Why would a firm use diversification as a strategy?

Diversification allows a company to focus more on its core business functions

undervalued assets or is in financial distress

Diversification offers a company the opportunity to expand beyond its core business

Diversification offers a firm the opportunity to compete in unknown markets

Answer

Correct Answer: Diversification offers a company the opportunity to expand beyond its core business

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134. Which of the following best describes the stakeholder approach to social responsibility?

Organizations should consider the intersts of only employees, investors, and customers when making decisions.

Organizations should consider solely the impact their decision will have on profits.

Organizations should consider the interests of all parties who have the potential of being affected by a decision.

Organizations should consider primarily the interests of their shareholders.

Answer

Correct Answer: Organizations should consider the interests of all parties who have the potential of being affected by a decision.

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135. When diversifying, what must be kept in tact to maintain the survival of the firm?

The integrity of the staff

The retention rate of the staff

The retention rate of customers

A companies sustainable competitive advantage

Answer

Correct Answer: A companies sustainable competitive advantage

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136. Concentration strategy is when a corporation does what?

Focuses on its primary line of business

Focuses on strategies to expand internationally

Concentrates on a diverse portfolio

Focuses on acquiring other businesses

Answer

Correct Answer: Focuses on its primary line of business

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137. True or False? Corporate strategy deals with industries the firm seeks to compete in.

False

True

Answer

Correct Answer: True

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138. What is the term used to describe a broad vision that outlines where a company wants to go?

Tactical plan

Core value statement

Stategic plan

Operational plan

Answer

Correct Answer: Stategic plan

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139. How can corporations use executive compensation to focus management decision making on goals that are important to shareholders?

Include a golden parachute provision.

Include a non-compete provision.

Include a golden handcuff provision.

Include a stock option grant provision.

Answer

Correct Answer: Include a stock option grant provision.

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140. What role does corporate governance framework play in corporate strategy?

Corporate governance framework plays no role in corporate strategy

Corporate governance framework ensures that corporate strategies are leveraged purely for self interest

Corporate governance framework ensures that corporate strategies are pursued with financial gain as their only objective

Corporate governance framework ensures that corporate strategies are pursued ethically

Answer

Correct Answer: Corporate governance framework ensures that corporate strategies are pursued ethically

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141. Performance benchmarking let's a firm:

compare its efficiency.

compare its overall productivity.

assess its competitive position compared to target/peer firms.

Answer

Correct Answer: assess its competitive position compared to target/peer firms.

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142. Which of the following costs of inventory production is associated with storing products until they are to used or sold?

stockout cost

holding cost

setup cost

ordering cost

Answer

Correct Answer: holding cost

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143. Which of the following is NOT an example of a corporate social responsibility activity?

Donating unsold or obsolte prodcuts to local non-profit organizations.

Offering employees flexible working arrangements to balance work and family responsibilities.

Increasing short-term profitability by extending the life cycle of equipment past the recommended period.

Using recylced paper cups as opposed to cups composed of polystyrene.

Answer

Correct Answer: Increasing short-term profitability by extending the life cycle of equipment past the recommended period.

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144. Of the following, which is a potential course of action in the event of a catastrophic failure in growth strategies?

Diversification

Corporate restructuring

Concentration

Expansion

Answer

Correct Answer: Corporate restructuring

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145. What is the term used to describe a statement that oulines what a company does and its reason for existing?

Vision statement

Core value statement

Operating statement

Mission statement

Answer

Correct Answer: Mission statement

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146. Which of the following best categorizes individuals or groups who have an interest in the actions of an organizations?

Investors

Stockholders

Shareholders

Stakeholders

Answer

Correct Answer: Stakeholders

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147. What is the main difference between corporate and business strategy?

There is no difference in the two

Business strategy focuses on business as a global unit, while corporate strategy focuses on the overall direction of individual business units

Business strategy focuses on business as a global unit, while corporate strategy focuses on the overall direction a corporation must take

Business strategy focuses on individual business units, while corporate strategy focuses on the overall direction a corporation must take

Answer

Correct Answer: Business strategy focuses on individual business units, while corporate strategy focuses on the overall direction a corporation must take

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148. What growth strategy is implemented with the combination of equity and significant amounts of debt, while utilizing the target's assets to pay off said debt?

A merger

A hostile takeover

An acquisition

A leveraged buyout

Answer

Correct Answer: A leveraged buyout

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149. True or False? Operational Management focuses on the responses of external market issues.

True

False

Answer

Correct Answer: False

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150. What is total quality management (TQM)?

A strategy focused on decreasing the number of defective products.

A technique used to increase the rate or production.

A management approach focused on customer focus, continuous improvement, and teamwork.

A philosophy for decreasing the number of one-the-job accidents.

Answer

Correct Answer: A management approach focused on customer focus, continuous improvement, and teamwork.

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151. Which of the following is not a step to the performance management cycle?

setting performance expectations

establishing incentives

providing feedback

evaluating performance

Answer

Correct Answer: establishing incentives

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152. What legal issue could potentially arise as a result of horizontal integration strategies?

Antitrust violations

Patent violations

Trademark infringement

Copyright violations

Answer

Correct Answer: Antitrust violations

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153. Which of the following is a potential detriment that vertical integration causes?

Increase in globalization and a reduction in flexibility

Increase in centralization and an increase in flexibility

Increase in expansion and an increase in flexibility

Increase in centralization and a reduction in flexibility

Answer

Correct Answer: Increase in centralization and a reduction in flexibility

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154. Which of the following positioning strategies requires an organization to produce a specialized product or service that is targeted towards a small segment of customers?

cost leadership strategy

firm level strategy

focus strategy

differentiation strategy

Answer

Correct Answer: focus strategy

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155. What is financing derived from the sale of common stock or from retained earnings?

debt financing

equity financing

leverage financing

stock financing

Answer

Correct Answer: equity financing

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156. What major disadvantage can a firm encounter with related diversification?

Difficulty in managing single business units

Difficulty in managing different, but related businesses

Difficulty in managing new personnel

Difficulty in managing new products

Answer

Correct Answer: Difficulty in managing different, but related businesses

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157. In 2014, Google announced that it was selling Motorola Mobility to Lenovo for roughly $2.91 billion. What is this an example of?

spin-off

retrenchment

divestiture

carve-out

Answer

Correct Answer: divestiture

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158. Vertical integration provides what benefit to a firm?

Increase in personnel

Reduced purchasing and selling costs

Decrease in waste

Increase in expansion capabilities

Answer

Correct Answer: Reduced purchasing and selling costs

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159. What are two methods of implementing growth strategies?

Diversification and concentration

Concentration and liquidation

Mergers and acquisitions

Insolvency and synergy

Answer

Correct Answer: Mergers and acquisitions

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160. What is an example of a growth strategy a firm may pursue?

National growth

International expansion

Internal growth

Restructuring

Answer

Correct Answer: International expansion

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161. What benefit would diversification pose for a company such as BP?

It allows a secondary profit channel in the case its main product becomes undesirable

It allows them to sell their primary product in a different market

It allows them to sell different products within their core market

It allows them the opportunity to restructure their core

Answer

Correct Answer: It allows a secondary profit channel in the case its main product becomes undesirable

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162. According to the product life cycle, which stage do products occupy if they are characterized by slowing growth and lower profits caused by increased competition?

Maturity

Growth

Decline

Introduction

Answer

Correct Answer: Maturity

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163. How should a corporation structure itself in order to maximize its abilities to execute a strategy?

Centralized and flexible

Static and flexible

Static and dynamic

A corporation should be decentralized and flexible

Answer

Correct Answer: A corporation should be decentralized and flexible

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164. Which of the following is not considered a corporate growth strategy?

Analytical expansion

International expansion

Diversification

Concentration

Answer

Correct Answer: Analytical expansion

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165. What activity must come first in the performance management process?

Specifying the relevant aspects of performance.

Providing performance feedback.

Identifying behaviors that lead to increased performance

Appraising performance.

Answer

Correct Answer: Specifying the relevant aspects of performance.

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166. What kind of outlook would make organizational stability a prudent action?

A strong future

A future anticipating a series of buyouts

An uncertain future

A future with diversification planned

Answer

Correct Answer: An uncertain future

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167. What are the three varieties of Vertical Integration?

Forward, Balanced, Horizontal

Backward, Forward, Balanced

Backward, Forward, Horizontal

Backward, Balanced, Horizontal

Answer

Correct Answer: Backward, Forward, Balanced

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168. With the inherent risk involved, why would a company choose unrelated diversification as a strategy?

A firm targeted for acquisition has undervalued assets, or is in financial distress

A firm targeted for acquisition has more personnel than the acquiring firm

A firm targeted for acquisition has valuable assets

A firm targeted for acquisition is more stable than the acquiring firm

Answer

Correct Answer: A firm targeted for acquisition has undervalued assets, or is in financial distress

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169. Which of the following is an example of a retrenchment strategy?

Delta airlines reducing flights to several areas of the United States.

Facebook purchasing popular photo-sharing service Instagram.

Google investing in the expansion of fiber networks to build its broadboard services offerings.

Amazon redesigning its website to better accomodate mobile users.

Answer

Correct Answer: Delta airlines reducing flights to several areas of the United States.

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170. Which of the following is a Visit Cost of benchmarking?

(All of these)

travel costs

hotel rooms

lost labor time

Answer

Correct Answer: (All of these)

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Corporate Strategy MCQs | Topic-wise

MCQ on Futures of Strategic Management	MCQ on Going Global strategy
MCQ on Innovation strategy	MCQ on Introduction to Strategy
MCQ on Making or Buying Strategy	MCQ on Resources and Capabilities Strategy
MCQ on Strategic Change	MCQ on Strategic Cooperation and Alliances
MCQ on Strategy Processes	MCQ on Strategy and Organizational Politics
General Corporate Strategy MCQs