CHAPTER 4The Internal Assessment

Multiple Choice

The Nature of an Internal Audit

1. A firm’s strengths that cannot be easily matched or imitated by competitors are calleda. internal audits.b. distinctive competencies.c. external audits.d. special properties.e. internal properties.

Ans: b Page: 115

2. Who should perform an internal audit?a. A private auditing firmb. The organization’s accounting departmentc. Managers from different units of the organizationd. A team of top-level managers and lower-level employeese. The chief executive officer

Ans: c Page: 116

3. _______ exemplifies the complexity of relationships among the functional areas of business.a. Government auditb. External auditc. Financial ratio analysisd. Environmental scanninge. Distribution strategy

Ans: c Page: 116

The Resource Based Web

4. The internal resource categories used in the resource-based approach are physical resources, human resources anda. financial resources.b. shareholder resources.c. organizational resources.

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d. natural resources.e. technological resources.

Ans: c Page: 117

5. Organizational resources include all of the following except:a. employee training.b. firm structure.c. planning processes.d. information systems.e. copyrights.

Ans: a Page: 117

6. Empirical indicators are resources that are either rare, hard to imitate, ora. expensive.b. inexpensive.c. easily substitutable.d. not easily substitutable.e. inefficient.

Ans: d Page: 117

Integrating Strategy and Culture

7. A pattern of behavior developed by an organization as it learns to cope with its problems of external adaptation and internal integration that has worked well enough to be considered valid and to be taught to new members as the correct way to perceive, think and feel is calleda. dysfunctional behavior.b. groupthink.c. behavior modification.d. organizational culture.e. internal audit effect.

Ans: d Page: 118

8. Which of the following is not a cultural product?a. Ritesb. Emotionsc. Ritualsd. Sagase. Symbols

Ans: b Page: 118

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9. A standardized, detailed set of techniques and behaviors that manage anxieties, but seldom produce intended, technical consequences of practical results are calleda. folktales.b. ritesc. metaphorsd. ritualse. valuesAns: d Page: 119

10. What are historical narratives describing the unique accomplishments of a group and its leaders, usually in heroic terms. a. ritesb. sagasc. storiesd. mythse. folktales

Ans: b Page: 119

11. Life-directing attitudes that serve as behavioral guidelines are calleda. values.b. rites.c. beliefsd. metaphorse. legend

Ans: a Page: 119

12. In Europe, it is generally true that the farther __________ on the continent, the more participatory the management style.a. southb. eastc. westd. northe. southeast

Ans: d Page: 120

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13. Americans place an exceptionally high priority on __________ whereas many foreigners place more worth on __________.a. time; relationshipsb. relationships; timec. silence; timed. silence; relationshipse. close personal distance; ample personal distance

Ans: a Page: 122

Management

14. What is the essential bridge between the present and the future that increases the likelihood of achieving desired results?a. Motivatingb. Planningc. Controllingd. Staffinge. Organizing

Ans: b Page: 123

15. All of the following are basic duties of a manager except:a. staffing.b. planning.c. consolidating.d. organizing.e. motivating.

Ans: c Page: 123

16. What is an up-front investment in success?a. Planningb. Organizingc. Motivatingd. Staffinge. Controlling

Ans: a Page: 123

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17. Which function of management includes areas such as job design, job specification, job analysis and unity of command?a. planningb. organizingc. motivatingd. staffinge. controlling

Ans: b Page: 124

18. Who does a planning horizon of two to five years applies to?a. top managementb. general managementc. middle managementd. lower managemente. all levels of management

Ans: a Page: 124

19. Synergy isa. synthetic energy.b. when a team effort is used to achieve desired results.c. when individuals work separately to achieve desired results.d. when financial expectations of the firm are decided upon.e. employee energy.

Ans: b Page: 125

20. Which management function includes breaking tasks into jobs, combining jobs to form departments and delegating authority?a. motivatingb. staffingc. organizingd. controllinge. planning

Ans: c Page: 125

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21. Which function of management is concerned with span of control and chain of command?a. planningb. organizingc. controllingd. directinge. evaluating

Ans: b Page: 125

22. Which of the following is the process of influencing people to accomplish specific objectives?a. Staffingb. Motivatingc. Planningd. Controllinge. Organizing

Ans: b Page: 126

23. _______ is a major component in motivation.a. Forecastingb. Organizational structurec. Recruitingd. Management developmente. Communication

Ans: e Page: 126

24. Staffing involves all of these activities except:a. recruiting.b. transferring.c. customer analysis.d. managing union relations.e. training and developing.

Ans: c Page: 127

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25. Which function of management includes all of those activities undertaken to ensure actual operations conform to planned operations?a. Planningb. Organizingc. Motivatingd. Staffinge. Controlling

Ans: e Page: 127

26. The first step in the controlling function of management is toa. take corrective actions.b. restrict breaks employees take.c. evaluate expense reports.d. establish performance standards.e. measure individual and organizational performance.

Ans: d Page: 127

27. All of the following are key questions that can reveal internal strengths and weaknesses in the management department except:a. Is the organization’s structure appropriate?b. Are reward and control mechanisms effective?c. Are the organization’s products positioned well among competing products?d. Does the firm use strategic management concepts?e. Do managers delegate authority well?

Ans: c Page: 128

Marketing

28. Opportunity analysis is one of the basic functions ofa. marketing.b. management.c. computer information systems.d. production/operations.e. research and development.

Ans: a Page: 128

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29. _______ can reveal the demographic characteristics of an organization’s customers.a. Customer profilingb. Test marketingc. Market developmentd. The vision statemente. Telemarketing

Ans: a Page: 128

30. ________ is not considered to be a function of marketing.a. Market segmentationb. Marketing researchc. Customer analysisd. Opportunity analysise. Distribution

Ans: a Page: 128

31. Selling includes all of these marketing activities except:a. advertising.b. dealer relations.c. customer analysis.d. publicity.e. sales promotion.

Ans: c Page: 129

32. What marketing function includes test marketing?a. selling products/servicesb. pricingc. customer analysisd. product/service planninge. distributing

Ans: d Page: 129

33. The Robinson-Patman Act affects a company’sa. pricing methods.b. trucking methods.c. cost of products.d. employee costs.e. culture.

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Ans: a Page: 129

34. Distribution includesa. customer analysis.b. pricing.c. warehousing.d. advertising.e. test marketing.

Ans: c Page: 130

Opportunity Analysis

35. Which of the following is not a key question that can reveal internal strengths and weaknesses of the marketing department?a. Does the firm have an effective sales organization?b. Is our product quality good?c. Are markets segmented effectively?d. Are the firm’s products and services priced appropriately?e. Does the firm have good liquidity?

Ans: e Page: 132

Finance/Accounting

36. Which of these is the allocation and reallocation of capital and resources to projects, products, assets and divisions of an organization?a. Investment decisionb. Dividend decisionsc. Financing decisionsd. Restructuring decisionse. Strategic decision

Ans: a Page: 133

37. Which decision concerns determining the best capital structure for the firm and includes examining various methods by which the firm can raise capital.a. investmentb. dividendsc. financingd. capital budgetinge. implementation

Ans: c Page: 133

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38. What category of ratios measures a firm’s ability to meet maturing short-term obligations?a. Profitabilityb. Liquidityc. Leveraged. Activitye. Growth

Ans: b Page: 135

39. What category of ratios includes return on total assets and return on stockholders’ equity?a. leverageb. activityc. profitabilityd. growthe. liquidity

Ans: c Page: 135

40. What category of ratios measures how effectively a firm can maintain its economic position in the growth of the economy and industry?a. profitabilityb. liquidityc. leveraged. activitye. growth

Ans: e Page: 135

Production/Operations

41. According to Roger Schroeder, which of the following is not a basic function of production management?a. Capacityb. Inventoryc. Workforced. Transportatione. Quality

Ans: d Page: 139

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42. _______ management deals with inputs, transformations and outputs that vary across industries and markets.a. Marketingb. Financial c. Research and Developmentd. Production/operationse. Distribution

Ans: d Page: 139

Research and Development

43. ______ has been successful in determining R&D budget allocations. a. Financing as many project proposals as possibleb. Using the percentage of sales methodc. Budgeting for R&D about what competitors spendd. Deciding how many successful new products are needede. All of the above have been used

Ans: e Page: 143

Management Information Systems

44. Which of the following ties all business functions together and provides the basis for all managerial decisions?a. Managementb. Marketingc. Informationd. Technologye. Workforce

Ans: c Page: 144

45. A management __________ receives raw material from both the external and internal evaluation of an organization.a. advisorb. information systemc. consultantd. strategic systeme. accountant

Ans: b Page: 144

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46. __________ become(s) __________ only when they are evaluated, filtered, condensed, analyzed and organized for a specific purpose, problem, individual, or time.a. Information; datab. Information; materialc. Data; informationd. Data; competitive advantagese. competitive advantages; material

Ans: c Page: 144-145

The Value Chain

47. The process whereby a firm determines the costs associated with organizational activities from purchasing raw materials to manufacturing products to marketing those products is calleda. the resource-based approach.b. value chain analysis.c. strategic cost analysis.d. the internal factor evaluation matrix.e. cost-benefit analysis.

Ans: b Page: 146

48. The initial step to implementing value chain analysis isa. attaching a cost to each discrete activity.b. establishing costs in terms of time. c. establishing costs in terms of money.d. converting the cost data into information by looking for competitive cost

strengths and weaknesses.e. dividing a firm’s operations into specific activities or business processes.

Ans: e Page: 146-147

The IFE Matrix

49. Which of the following is the first step in developing an IFE Matrix?a. Determining the organization’s structureb. Summing the weighted scores for each variablec. Identifying the organization’s strengths and weaknessesd. Identifying the organization’s functions of businesse. Determining the lead strategist

Ans: c Page: 147

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50. The IFE Matrix should be _____________ in multidivisional firms.a. constructed for each divisionb. all-inclusivec. constructed only for the major divisionsd. developed before the EFE Matrixe. revised monthly

Ans: a Page: 148

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