STRATEGIC MANAGEMENT

FINAL EXAM

1-25. True or False

26-50. Identification

1. Planning is considered in designing of organizational structure.

2. Characteristics of a Mission Statement Broad in scope; does include monetary amounts, numbers,
percentages, ratios, or objectives.

3. Easy to communicate: The vision must be worded in such a way that it can be communicated easily
to the stakeholders, especially the shareholders, employees, and
customers.

4. Governance is the process conducted by the board of directors to authorize, direct, and oversee
management toward the achievement of the organization's objectives.

5. Matrix Structure is the structural form divides the entire organization’s work according to
specialization of functions so that individuals can develop expertise to perform work efficiently and
effectively.

6. Increase of income is one of the benefits of market segmentation.

7. Staffing is the next important management function after organizing.

8. Importance (Benefits) of Vision and Mission Statements to provide a basis for organizing work,
departments, activities, and segments around a common purpose.

9. Outsourcing is selling a division or part of an organization. It is often used to raise capital for further
strategic acquisitions or investments.

10. Organizational structure is the most important part of strategy implementation?

11. The internal audit function is generally considered independent when it can carry out its work freely
and Objectively.

12. Income is an example of behavioral segmentation.

13. Staffing show the management how to the organization to be built.

14. Characteristics of a Mission Statement Includes nine components: customers, products or services,
markets, technology, concern for survival/growth/profits, philosophy, self-concept, concern for public
image,
15. Merger and acquisition are two commonly used ways to pursue strategies. A merger
occurs when two organizations of about equal size unite to form one enterprise. An acquisition occurs
when a smaller organization purchases (acquires) a smaller firm or vice versa.

16. Independent Audit Department It is an independent appraisal function established within the
organization to carry out the role and responsibility defined in the Internal Audit Charter.

17. Strategy implementation is the process of setting things in order by organizing structure and systems
for the implementation of strategic plans.

18. Organizational cohesiveness is one of the important of organizing.

19. One of the process of staffing is grouping the activities.

20. Retrenchment occurs when an organization regroups through cost and asset reduction
to reverse declining sales and profits. Sometimes called a turnaround or reorganizational strategy.
Retrenchment can involve 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.

21. Divestiture involves companies hiring other companies to take over various parts of their
functional operations, such as human resources, information systems, payroll, accounting, customer
service, and even marketing.

22. Internal Factor Evaluation (IFE) Matrix is included in the decision stage for the strategy formulation
framework.

23. Internal Audit Plan It is a formal written statement that defines the approved purpose, authority,
and responsibility of the internal audit activity.

24. Life style is an example of psychographic segmentation.

25. Product grouping is called markets.

26. Implementation of a strategic plan in an effort to reach organizational goals.

27. A function within financial planning that, as the name implies, bridges the domains
of Strategy and Finance; as well as Marketing and Corporate Development.

28. Includes activities that companies undertake to innovate and introduce new products and services.

29. The process by which an organization chooses the most. appropriate courses of action to achieve its
defined goals.

30. Is calculated as a company's profit divided by the outstanding shares of its common stock.
31. Information system used for decision-making, and for the coordination, control, analysis, and
visualization of information in an organization.

32. Refer to specific guidelines, methods, procedures, rules, forms, and administrative
Practices established to support and encourage work toward stated goals.

33. The complete process of delivering a new product or improving an existing one for customers.

34. Analysis is a technique that allows an organization to examine the expected results of strategies
being implemented.

35. The earnings of a business before interest and tax.

36. Evaluating the worth of a business is central to strategy implementation because numerous
strategies are often implemented by acquiring other firms.

37. Serve as guidelines for action, directing and channeling efforts and activities of organization
members.

38. _____________ that both affect consumer and industrial products and services shorten product life
cycles.

39. ______________ are motivated more by perceived self-interests than by organizational interests,
unless the two coincide.

40. It is when a company initially offers shares of stocks to the public.

41. Means selling off a percentage of a company to others to raise capital; consequently, it dilutes the
owners’ control of the firm.

42. Involves the securing of assets in financial institutions in foreign countries, which may be limited by
the laws of the customer’s home nation, can be used to avoid certain unfavorable circumstances should
the funds be kept in a financial institution in the home nation.

43. The process of ______________is facilitated immensely in firms that have an effective information
system.

44. Having an effective ______________________may be the most important factor in differentiating

successful from unsuccessful firms.

45. Affects an organization from top to bottom, including all the functional and divisional areas of a
business.

46._______________are expected to take a more focused oversight role in respect of risk management
and internal control.
47. ____________________ is an appraisal activity established or provided as a service to the entity.
functions include, amongst other things, examining, evaluating and monitoring the adequacy and
effectiveness of internal control.

48. Formal line of authority which begin in supervisor to lowest rank.

49. Occasion is an example of which type of segmentation variable?

50. The vision should draw a picture that can reveal where the company is heading and can also indicate
clearly the market position.