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MGT603 Strategic Management Solved MCQs from Book by David (chap 2) b



1. A firms concern for employees in a mission addresses the question, “Is the firm responsive to social, community, and environmental concerns?”

Ans: T Page: 70

Conclusion
2. According to Peter Drucker, developing a clear business vision and mission is the first responsibility of strategists.
Ans: T Page: 73

3. Environmental changes should not change a mission statement.
Ans: F Page: 73

4. A well-conceived mission statement is the cornerstone of effective strategic management.
Ans: T Page: 73

Multiple Choice

5. The vision and mission statement can often be found
a. in the SEC report.
b. in annual reports.
c. on customer receipts.
d. on supplier invoices.
e. on community news bulletins.
Ans: b   Page: 56

6. According to recent studies, what percent of companies have used a mission statement sometime in the past five years?
a. 15%
b. 30%
c. 60%
d. 75%
e. 90%
Ans: e   Page: 56

What Do We Want To Become?
7. Which of these basic questions should a vision statement answer?
a. What is our business?
b. Who are our employees?
c. Why do we exist?
d. What do we want to become?
e. Who are our competitors?
Ans: d   Page: 56

8. Which statement should be created first and foremost?
a. Strategic
b. Vision
c. Objectives
d.  Mission
e. Competitive advantage
Ans: b   Page: 56

9. The ideal length of a vision statement is:
a. one page.
b. several paragraphs.
c. one sentence.
d. as long as necessary to convey the message.
e. several sentences.
Ans: c   Page: 56

What Is Our Business?
60. Who is referred to as “the father of modern management?”
a. Deming
b. Peters
c. Drucker
d. McGinnis
e. Smith
Ans: c   Page: 59

61. What is the first step in the comprehensive strategic-management model?
a. Developing vision and mission statements
b. Performing external audits
c. Performing internal audits
d. Measuring and evaluating performance
e. Establishing long-term objectives
Ans: a   Page 59

62. According to the comprehensive strategic-management model, which step needs to be completed immediately following the establishment of long-term objectives?
a. Developing vision and mission statements
b. Performing external audits
c. Performing internal audits
d. Generating, evaluating, and selecting strategies
e. Measuring and evaluating performance
Ans: d Page 59

63. The purpose of a mission statement is to declare all of these except:
a. a reason for being.
b. an annual financial plan.
c. a statement of purpose.
d. a statement of beliefs.
e. whom it wants to serve.
Ans: b   Page: 59

64. As indicated in the strategic-management model, a clear _______ is needed before alternate strategies can be formulated and implemented.
a. long-term objective
b. short-term objective
c.  policy
d. mission statement
e. evaluation strategy
Ans: d   Page: 59

65. A mission statement is sometimes called all of the following except:
a. a statement of intent.
b. a statement of purpose.
c. a statement of beliefs.
d. a creed statement.
e. a statement of business principles.
Ans: a   Page: 59

66. A businesses mission is the foundation for all of the following except:
a. priorities.
b. strategies.
c. plans.
d. employee wage rates.
e. work assignments.
Ans: d   Page: 60

67. The mission statement answers which question?
a. What is our business?
b. How can we improve ourselves?
c. What do we want to become?
d. Who are our stakeholders?
e. How can we increase profitability?
Ans: a   Page: 60

68. The vision statement answers which question?
a. What is our business?
b. How can we improve ourselves?
c. What do we want to become?
d. Who are our stakeholders?
e. How can we increase profitability?
Ans: c   Page 60

69. In the process of developing a mission statement, it is important to involve
a. as few managers as possible.
b. as many managers as possible.
c. upper-level management only.
d. lower-level management only.
e. the board of directors only.
Ans: b   age: 61

70. The process of developing a vision and mission statement includes which of these as the first activity?
a. A request to modify the current document
b. Ask managers to read selected articles about mission statements.
c. Ask managers to prepare a mission statement for the organization.
d. Have a brainstorming session on whether the organization should have a mission statement.
e. A merging of several mission statements into one document
Ans: b   Page: 61

71. After a draft mission statement has been developed, it is important to:
a. ask managers to read several articles about mission statements as background information.
b. vote on the mission statement.
c. ask managers to prepare a mission statement for the organization.
d. ask managers to seek support for the mission statement from their subordinates.
e. provide a request for modifications, additions and deletions to the mission statement.
Ans: e   Page: 61

72. What can be used to promote unbiased views and to manage the development of the mission statement more effectively?
a. an internal group
b. a committee of managers
c. command-and-control
d. surveys
e. a facilitator
Ans: e   Page: 61

73. According to Campbell and Yeung, what is/are most likely associated with behavior and the present.
a. Mission
b. Values
c. Long-term objectives
d. Vision
e. Short-term objectives
Ans: a   Page: 61

Importance of Vision and Mission Statements

74. A study by Rarick and Vitton found that firms with a formalized mission statement have the average return on shareholders’ equity compared to those firms without a formalized mission statement.
a. one quarter
b. half
c. twice
d. three times
e. five times
Ans: c   Page: 61

75. Business Week reports that firms using mission statements have __________ percent higher return on certain financial measures than those without such statements.
a. 10
b. 15
c. 30
d. 57
e. 86
Ans: c   Page: 61-62

76. King and Cleland recommend organizations carefully develop a written mission statement for all of the following reasons except:
a. to provide a basis for allocating organizational resources.
b. to establish a general tone or organizational climate.
c. to ensure unanimity of purpose within the organization.
d. to ensure a command-and-control structure.
e. to facilitate the translation of objectives into a work structure involving the assignment of tasks to responsible elements within the organization.
 Ans: d   Page: 62

77. What is needed before people can focus on specific strategy formulation activities when developing a mission statement?
a. Negotiation
b. Compromise
c. Eventual agreement
d. a and b
e. All of the above
 Ans: e   Page: 62

78. What is the best time to develop a mission statement?
a. before a business is opened
b. when the firm is successful
c. when the firm is in financial trouble
d. when the firm is in legal trouble
e. when the firm encounters competition
 Ans: b   Page: 63

79. What is likely to happen if a mission or vision statement is implemented during troubled times for a firm?
a. Employees will ignore the new mission or vision statement.
b. Profitability will decline.
c. The firm will experience a reverse in the decline of profitability.
d. No change
e. Managers will be unable to resolve divergent views.
 Ans: c   Page: 63

Characteristics of a Mission Statement
80. Which group would be classified as a stakeholder?
a. Communities
b. Banks
c. Suppliers
d. Employees
e. All of these
 Ans: e   Page: 64

81. All stakeholders:
a. have claims and concerns about an organization, but these claims and concerns vary.
b. have the same claims and concerns about an organization.
c. have ownership rights in an organization.
d. have the same voting rights in an organization.
e. have environmental concerns as their top priority.  
 Ans: a   Page: 64

82. The three characteristics of a mission statement are a declaration of attitude, a declaration of social policy and:
a. an employee orientation.
b. a customer orientation.
c.  a shareholder orientation.
d. an environmental orientation.
e. a profit orientation.
 Ans: b   Page: 64-68

83. The potential for creative growth for the organization can be limited by
a. an overemphasis on stakeholders.
b. not enough emphasis on stakeholders.
c. a mission statement that is too general.
d. a mission statement that is too specific.
e. a mission statement that is too dynamic.
    Ans: d   Page: 64

84. A proactive environmental policy is likely to lead to:
a. higher cleanup costs
b. conservation of energy
c. reduced customer loyalty
d. numerous liability suits
e. higher medical costs
 Ans: b   Page: 65

85. The general public is especially interested in , whereas stockholders are more interested in .
a. environmental concerns; social responsibility
b. social responsibility; the treatment of employees
c. the treatment of employees; environmental concerns
d. profitability; social responsibility
e. social responsibility; profitability
 Ans: e   Page: 65

86. In developing a mission statement, arousing emotion
a. is not a benefit.
b. is the most important goal.
c. is important.
d. should be avoided if possible.
e. is counterproductive.
 Ans: c   Page: 66

87. According to McGinnis, a mission statement should be all of the following except:
a. it should be specific enough to control creative growth.
b. it should be stated in clear terms.
c.  it should distinguish an organization from all others.
d. it should define what an organization is.
e. it should serve as a framework for evaluating both current and prospective activities.
 Ans: a   Page: 66

88. An effective mission statement is all of the following except:
a. It reflects judgments about future growth directions that are based upon forward-looking external and internal analyses.
b. It provides useful criteria for selecting among alternative strategies.
c.  It provides a basis for generating and screening strategic options.
d. It is static in orientation.
e. It should include options that are considered less promising.
 Ans: d   Page: 66

89. Good mission statements identify the ______ of a firm’s products to its customers.
a. utility
b. price
c. profit margin
d. demand
e. popularity
 Ans: a   Page: 66

90. Which of these examples of a mission statement’s focus area is not effective?
a. AT&T focuses on communication rather than telephones.
b. Exxon/Mobil focuses on oil and gas rather than energy.
c. Union Pacific focuses on transportation rather than railroads.
d. Universal Studios focuses on entertainment rather than movies.
e. Starbucks focuses on the café experience rather than coffee.
 Ans: b   Page: 66

91. Which European country has the highest growth rate in consumer purchases over the internet?
a. Germany
b. United Kingdom
c. Sweden
d. Greece
e. Ireland
Ans: d   Page 67

92. The largest category for online sales in the United States is:
a. books
b. travel
c. computers
d. jewelry
e. music
Ans: b   Page 67

93. Corporate social policy should be designed and articulated during which phase of strategy development?
a. implementation
b. formulation
c. evaluation
d. control
e. management
 Ans: b  Page: 68

94. The corporate social policy should be reaffirmed or changed during which phase of strategy development?
a. strategy implementation
b. strategic mission
c. strategy formulation
d. strategy evaluation
e. strategy control
 Ans: d   Page: 68 

95. In 2005, which of the following companies was rated highest for social responsibility?
a. IBM
b. Hewlett-Packard Company
c. Fannie Mae
d. Green Mountain Coffee Roasters
e. Intel Corporation
Ans: c   Page: 68

Components of a Mission Statement
96. In regard to its elderly workforce, Japan varies from the United States in that:
a. A smaller percentage of Japan’s senior citizens work
b. Japan does not have laws banning discrimination based on age
c. Most Japanese workers retire before 60
d. Japanese citizens are required to retire at 60
e. Japan is phasing in a shift from ages 65 to 60 as the date when a pension can be received
Ans: b   Page 69

97. Effective mission statements can vary in
a. length.
b. content.
c. format.
d. specificity
e. all of the above
Ans: e   Page: 70

98. Which component of a mission statement addresses the firm’s distinctive competence or major competitive advantage?
a. Technology
b. Philosophy
c. Concern for public image
d. Customers
e. Self-concept
Ans: e   Page: 70

99. Which component of a mission statement addresses the basic beliefs, values, aspirations, and ethical priorities of the firm?
a.  Technology
b. Philosophy
c. Concern for public image
d. Customers
e. Self-concept
Ans: b   Page: 70

100.   Which question(s) are answered in an effective mission statement?
a. What is the purpose of our organization?
b. What is our company philosophy or self-concept?
c. What technology will we employ to achieve our objectives?
d. Who are the firm’s customers?
e. All of the above
Ans: e   Page: 70

101.   Which of the following dimensions are not recommended aspects of a mission statement?
a. Strategies
b. Self-concept
c. Concern for employees
d. Markets
e. Customers
Ans: a   Page: 70


102.   Effective mission statements
a. are usually changed every few months.
b. are usually changed every few years.
c. never require revision.
d. become ineffective in the first year.
e. stand the test of time and require little revision.
Ans: e Page: 73

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