HANDOUT#1 (PART 1)

Basic Consideration in MAS

1. It could be argued that the reason a company has succeeded in every competitive market while its rivals have failed
is because:
A. The strategies that the successful company pursues have a strong impact on its performance relative to its
rivals.
B. The successful company has adopted more steps to its formal strategic planning process.
C. The company has evolved into a multi-divisional organization.
D. The company has adopted a strategy with low propensity for risk-taking.
2. Which of the following is not a significant reason for planning in an organization?
A. Forcing managers to consider expected future trends and conditions.
B. Developing a basis for controlling operations.
C. Enabling selection of personnel for open positions.
D. Promoting coordination among operation units.
3. One of the key sources of competitive advantage is:
A. Slow adoption of more efficient business practices.
B. Responsiveness to customer needs.
C. Maintaining average quality.
D. Taking advantage of, and being a follower in, competitors’ product innovation.
4. According to the BCG Growth-Share Matrix, all of the following are included in product life-cycle strategies, except:
A. Increase investment in the product to maximize market share.
B. Aggressive pricing to increase market share quickly.
C. Superior responsiveness to customers.
D. Milking of the product.
5. Strategic managers use different business-level strategies to put the company’s business model into action.
Business level strategies include all of the following except:
A. How to improve the product attributes, the service attributes and personnel attributes associated with the
company’s product.
B. How and where to invest the company’s capital in ways that will results in competitive advantage.
C. How much to differentiate and how to price the company’s product or service.
D. What products should be offered and to which customer groups (market segments)
6. The method(s) that managers employ to attain one or more of the organization’s goals can be defined as:
A. Choosing the company’s organizational structure
B. Strategy
C. Determining the company’s business model
D. Capital investments
7. Companies group customers in order to gain a competitive advantage. This is called:
A. Market segmentation
B. Positioning
C. Customer differentiation
D. Product differentiation
8. When the organization develops a plan or plans to prepare for the future, often unpredictable events, it is called:
A. Contingency planning
B. Short-term business planning
C. Long-term business planning
D. Capital budgeting
9. The sources of a company’s distinctive competencies are:
A. Company’s resources and capabilities
B. Company’s threats and opportunities
C. Company’s prior strategic commitments
D. High probability and sustained profit growth
10. Pro forma financial statements are used within a company for various purposes. They are not used for:
A. Determining whether the company will be in compliance with required covenants on its long-term debt
B. Comparison with actual results for performance reporting in order to determine employee bonuses
C. “What if” analysis, to forecast the effect of proposed change
D. Determining the company’s future needs for external financing
11. A company’s mission statement is, above all, intended to define:
A. The weakness of the firm.
B. The specific actions that the company should take,
C. Why the company exists, or its “reason to be”.

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 D. The company’s profit objectives.
12. All of the following are characteristics of the strategic planning process except the
A. Analysis of external economic factors
B. Analysis and review of departmental budgets
C. Emphasis on the long run
D. Review of the attributes and behavior of the organization’s competition

13. Michael Porter’s Five Forces Model helps managers to analyze forces that shape competition within an industry in
order to identify opportunities and threats in their industry environments. Which of the following forces is not one for
the Five Forces?
A. Risk of entry by potential competitors
B. The bargaining power of competitors
C. The closeness of substitutes to a company’s products
D. The bargaining power of suppliers
14. Which of the following is not a characteristic of a tactical plan?
A. It is quantitative in focus
B. It covers period of time one year to five years
C. It relates to production, material requirements, inventory, cash flows and income statements
D. Top management is responsible for development and overall implementation
15. The four factors that derive from a company’s distinctive competencies and which create competitive advantage
are
A. Continuous improvement, continuous learning, prior strategic commitments and absorptive capacity
B. Superior efficiency, quality, innovation, and customer responsiveness
C. Employee productivity, capital productivity, product innovation, and process innovation
D. The value (utility) customers place on the company’s products, the price it charges for its products, the costs of
creating those products, and the profitability of the company
16. Michael Porter of Harvard University has set forth three generic strategies for companies. Which of the following is
not one of those strategies?
A. Focus, or competitive scope
B. Cost leadership
C. Differentiation
D. Innovation
17. Strategy is a broad term that usually means the selection of overall objectives. Strategic analysis ordinarily excludes
the
A. Target product mix and productions schedule to be maintained during the year.
B. Best ways to invest in research, design, production, distribution, marketing, and administrative activities.
C. Trends that will affect the entity’s market.
D. Forms of organizational structure that would best serve the entity.
18. An organization is said to have “competitive advantage” over its industry rivals when:
A. It can distribute its product more quickly than other individual competitors
B. It spends more money on advertising than its competitors do
C. Its distribution channels are wider than others in its industry
D. The profitability of the company is greater than that of the average profitability for all other organizations in its
industry
19. To avoid a failure, a company must maintain a constant focus on all of the following except:
A. The nature of the organization’s previous strategy and strategic commitments
B. Continuous improvement and learning
C. Identification and adoption of the best industrial practices
D. The foundation and practices of competitive advantage
20. The plan that describes the long-term position, goals, and objectives of an entity within its environments is the
A. Strategic plan
B. Capital budget
C. Cash management budget
D. Operating budget
21. Management accounting focuses primarily on providing data for
A. Internal uses by managers
B. External uses by stockholders and creditors
C. External uses by the Internal Revenue Service
D. External uses by the Securities and Exchange Commission
22. Managerial accounting
A. Is more future oriented that financial accounting

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 B. Tends to summarize information more than financial accounting
C. Is primarily concerned with providing information to external users
D. Is more concerned with precision than timeliness
23. Compared to financial accounting, managerial accounting places more emphasis on:
A. The flexibility of the information
B. The precision of the information
C. The verifiability of the information
D. The consistency of the information
24. The function of the management that compares planned results to actual results is known as:
A. Planning
B. Directing and motivating
C. Controlling
D. Decision making
25. Which of the functions of management involves overseeing day-to-day activities
A. Planning
B. Directing and motivating
C. Controlling
D. Decision making

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