Chapter No1.

The Nature of Strategic Management

The term _________ is used to refer to strategy formulation, implementation, and evaluation, with _________referring only to strategy formulation. strategic planning; strategic management assessment; planning strategic management; strategic planning management cycle; brainstorming Which of these requires a firm to establish annual objectives, devise policies, and allocate resources? Strategy formulation Strategy implementation Strategy manipulation Strategy evaluation The rationale for periodically conducting strategic-management meetings away from the work site is to encourage more _____________ and ____________ among participants. feedback; rigidity creativity; candor confidence; self-interest strategy evaluation; candor Anything that a firm does especially well compared to rival firms is referred to as: competitive advantage. comparative advantage. an external opportunity. opportunity cost. Both military and business organizations do all of the following except: use of the element of surprise. aim "to gain competitive advantage." use the assumption of conflict to develop strategies. use their own strengths to exploit competitors' weaknesses. __________ help an organization gather, analyze, and organize information. Ethics officers Operatives Lobbyists Strategists A disadvantage of international operations is:

foreign operations can allow firms to establish low-cost production facilities in locations close to raw materials and/or cheap labor. economies of scale can be achieved from operation in global rather than solely domestic markets. competitors in foreign markets may not exist. language, culture, and value systems differ among countries, causing communication barriers and problems managing people. _________ are especially critical for successful strategy implementation. Interpersonal skills Technical plans Long-range plans Short-range plans 9. All of these are pitfalls an organization should avoid in strategic planning except: using strategic planning to gain control over decisions and resources. failing to involve key employees in all phases of planning. hastily moving from mission development to strategy formulation. using plans as a standard for measuring performance. ____________ and __________ refer to economic, social, cultural, demographic, environmental, political, legal, governmental, technological, and competitive trends and events that could significantly benefit or harm an organization in the future. Internal strengths; external threats External opportunities; external threats Internal weaknesses; external opportunities Internal strengths; internal weaknesses Strategic management can be defined as the art and science of formulating, implementing, and evaluating cross-functional decisions that enable an organization to achieve its objectives. True False The action stage of strategic management is called strategy formulation. True False Three fundamental strategy evaluation activities are reviewing external and internal factors, measuring performance, and taking corrective actions. True False Strategies can be defined as specific results that an organization seeks to achieve in pursuing its basic mission. True

False Strategies are the means by which long-term objectives will be achieved. Reasons for poor or no strategic planning on part of firms include overconfidence, too expensive, suspicion, and laziness. True False Objectives are an organization's statements that answer the question "what do we want to become?" True False An organization can pursue any and/or all strategies that potentially could benefit the firm. True False No organization can pursue all the strategies that potentially could benefit the firm. Communication is an act of strengthening employees' sense of effectiveness by encouraging them to participate in decision making and to exercise initiative and imagination, and rewarding them for doing so. True False Empowerment is the act of strengthening employees' sense of effectiveness by encouraging and rewarding them to participate in decision making and exercise initiative and imagination. Strategic management must be a self-reflective learning process. True False One pitfall to avoid in strategic planning is top management making many intuitive decisions that conflict with formal planning. True False

Virtual University MCQs BANK

MGT603 Solved MCQs from Book by Fred (chap 2)

Chapter No2.
The Nature of Strategic Management Most practitioners and academicians of strategic management feel that an effective mission statement exhibits ______ characteristics or components. twelve

three five nine

Carefully prepared _____________ and ____________ are widely recognized by both practitioners and academicians as the first step in strategic management. short-term objectives; long-term objectives long-term objectives; goals creeds; long-term objectives vision statements; mission statements The vision and mission statement can often be found: in the SEC report. in a competitive market analysis. on the front of annual reports. on supplier invoices. It is important to involve ______________ in the process of developing a mission statement. only those managers who will use the mission very few people to ease consensus-building as wide a variety of upper-level managers as possible as many managers as possible An article by Campbell and Yueng emphasizes that the process of developing a mission statement should create a(n) ________ and ________ between the organization and its employees. cultural bond; sense of accomplishment emotional bond; sense of mission

physical bond; profitable purpose short-term plan; sense of direction During strategy _________, corporate social policy should be set and administered. implementation control formulation evaluation What is the recommended length of an effective mission statement? There is no recommendation. It can be as long as the management wants. One sentence of 10 to 20 words. One page. Less than 250 words. 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. twice one quarter half five times A major reason for developing a business mission statement is to attract ________ who give meaning to an organization. stockholders lobbyists competitors customers

Which of the following is a question that an effective mission statement answers? What is our profitability? Is the firm technologically current? What is our net worth? What is the company we want to be in the long-range future? The vision statement should be short, preferably one sentence. True False The vision statement should be short, preferably one sentence. Commitment to a company's strategy and intellectual agreement on the strategies to be pursued do not necessarily translate into an emotional bond. True False This does not necessarily translate into an emotional bond; hence, strategies that have been formulated may not be implemented. The vision statement should be a paragraph and developed by the CEO or President of the company. True False The vision statement should be short, preferably one sentence, and as many managers as possible should have input into developing the statement. Drucker says that asking the question "What is our business?" is synonymous with asking the question "what is our mission?" True False Drucker says that asking the question "What is our business?" is synonymous with asking the question "what is our mission?" Stakeholders of an organization include stockholders, customers and creditors, but not the competitors. True False Stakeholders include stockholders, customers, creditors, as well as competitors. Developing a comprehensive mission statement is important because divergent views can be revealed and resolved through the process. True False Resolving divergent views is one result of developing a comprehensive mission statement.

An effective mission statement should include five components. True False An effective mission statement should include nine components. During strategy formulation, social policy should be reaffirmed and changed. True False It should be changed during strategy evaluation. A mission statement should be longer than 250 words describing the ten components. True False A good mission statement should not be more than 250 words describing nine components. The term social policy embraces managerial philosophy and thinking at the highest levels of an organization. True False CHAPTER 3 The External Assessment True/False Introduction Industry analysis is also referred to as external strategic management audit. 1. Ans: T Page: 82 2. An external audit focuses on identifying and evaluating trends and events within the control of management. Ans: F Page: 82

The Nature of an External Audit 3. The aim of an external audit is to develop an exhaustive list of every possible factor that could influence the business. Ans: F 4. Ans: T Page: External audits attempt to identify key variables that offer actionable responses. Page 83

5. Five major categories of external variables are: (1) economic forces, (2) social and cultural forces, (3) political, governmental and legal forces, (4) technological forces and (5) demographic forces. Ans: F Page: 83

6. As many managers and employees as possible should be involved in the process of performing an external audit. Ans: T Page: 83

7. To perform an external audit, a company first must gather competitive intelligence and information about social, cultural, demographic, environmental, economic, political, legal, governmental and technological trends. Ans: T 8. Ans: F Page: 84 Freund argues that key external factors must not be hierarchical. Page: 84

The Industrial Organization (I/O) View 9. Research findings suggest that a greater percentage of a firms profitability can be explained by the industry than can be explained by the firms internal factors. Ans: F Economic Forces 10. Ans: T 11. Ans: F An economic trend in America is the increasing numbers of two-income households. Page: 85 Economic factors do not have much impact on the attractiveness of strategies. Page: 85 Page: 85

12. An increase in interest rates is directly related to an increase in discretionary income and an increase in the demand for discretionary goods. Ans: F 13. falls. Ans: F 14. Ans: F 15. Ans: T 16. Page: 85 Motor vehicle firms in the United States are vulnerable when the value of the dollar Page: 86 A low value of the dollar means lower exports and higher imports. Page: 86 In 2005, the Yen rose to a five-year high against the dollar. Page 86 The economic standard of living varies little between cities and countries.

Ans: F 17. Ans: T 18. Ans: F

Page 86 The cost of living in London is greater than the cost of living in New York City. Page 87 The cost of living in Boston is greater than the cost of living in New York City. Page 87

19. According to the Wall Street Journal, the political bureaucracy in Russia has been able to stimulate economic progress, free enterprise, and entrepreneurship. Ans: F Page 87 20. Russian businesses are more likely to fall victim to illegal actions by officials and policemen than by criminals. Ans: T Page 87 Social, Cultural, Demographic and Environmental Forces 21. The United States is getting older and less Caucasian.

Ans: T Page: 88 22. It is predicted that, by 2025, over 18% of the population in the United States will be over 65 years old. Ans: T Page 88 23. Recent consumption trends in the United States indicate that wine consumption is increasing at 5% while beer consumption is increasing at 10%. Ans: F Page 88 24. Hispanics are expected to become a larger minority group in the United States than African Americans by 2021. Ans: T Page: 88

25. In the United States, the population has been moving from the south and west to the Northeast and Midwest. Ans: F 26. In 2003, Page: 89

China replaced Mexico as the largest exporter to the United States. Ans: T Page 89

Political, Governmental and Legal Forces 27. Political, governmental, and legal factors are considered key threats for most small and large organizations. Ans: F Page 90

28. Political forecasts can be the most important part of an external audit for firms that depend heavily on government contracts. Ans: T Page: 83

29. Within the European Union (EU), tax rates have been standardized to end competitive tax breaks among member countries. Ans: F Technological Forces 30. The Internet is changing the very nature of many industries by altering product life cycles and changing the historical trade-off between production standardization and flexibility. Ans: T Page: 93 page 90

31. In practice, critical technology decisions are too often delegated to lower organizational levels or are made without an understanding of their strategic implications. Ans: T Competitive Forces 32. A characteristic that describes the most competitive companies in America is whether its broke or not, fix itmake it better; not just products, but the whole company if necessary. Ans: T Page: 96 Page: 94

33. Innovate or evaporate; particularly in technology-driven businesses, nothing quite recedes like success, is a characteristic given that describes the most competitive companies in America. Ans: T Page: 96

34. Corporate intelligence can be defined as a systematic and ethical process for gathering and analyzing information about the competitions activities and general business trends to further a businesss own goals. Ans: F 35. Ans: F Page 96 Internal opportunities can be represented by major competitors weaknesses. Page: 96

36. According to Business Week, there are less than 500 corporate spies now actively engaged in intelligence activities. Ans F: Page 96

37. According to Business Week, and 9 out of 10 large companies have employees dedicated solely to gathering competitive intelligence. Ans: T Page: 96

38. An effective CI program allows all areas of a firm to access consistent and verifiable information in making decisions. Ans: T Page: 97

39. Competitive intelligence is not considered corporate espionage because 95 percent of the information a company needs to make strategic decisions is available and accessible to the public. Ans: T Page: 97

40. Because companies are fearful of corporate espionage, cooperative agreements between competitors are becoming less popular. Ans: F Page 98

41. Learning from the partner is a major reason whyU.S. firms enter into cooperative agreements. Ans: F Page: 99

42. Market commonality is the extent to which the type and amount of a firms internal resources are comparable to a rival. Ans: F page 99

Competitive Analysis: Porters Five-Forces Model 43. According to Michael Porter, five competitive forces create vital opportunities and threats to organizations: (1) new entrants, (2) substitute products or services, (3) bargaining power of suppliers, (4) bargaining power of buyers, and (5) rivalry among existing firms. Ans: T Page: 100

44. The first step for using Porters Five-Forces Model is to evaluate the relative strength of each competitive force. Ans: F Page 101

45. Bargaining power of consumers is usually the most powerful of Porters five competitive forces. Ans: F Page: 101

46. Significant barriers to entry are not always sufficient to keep some new firms from entering industries with higher-quality products, lower prices and substantial marketing resources. Ans: T 47. lenses. Ans: T 48. Ans: F Page: 102 Laser eye surgery would be considered a substitute product for eyeglasses and contact Page 102 Forward integration is used by firms to gain control or ownership of suppliers. Page: 102

49. The bargaining power of consumers can be the most important force impacting competitive advantage. Ans: T page 103

Forecasting Tools and Techniques 50. Ans: T Forecasts are educated assumptions about future trends and events. Page: 104

51. Qualitative forecasts are most appropriate when historical data are available and when the relationships among key variables are expected to remain the same in the future. Ans: F 52. stable. Ans: T 53. past. Ans: F 54. Ans: F page 104

Quantitative forecasts become less accurate as historical relationships become less Page: 104 Linear regression is based on the assumption that the future will be different from the Page: 104 Linear regression is a popular technique for qualitative forecasts. Page 10

55. Without reasonable assumptions, the strategy-formulation process could not proceed effectively. a. Ans: T Page: 104

The Global Challenge

56. Globalization is a process of worldwide integration of strategy formulation, implementation and evaluation activities. Ans: T Page: 106 57. A global strategy seeks to meet the needs of customers worldwide with the lowest cost at the highest value. Ans: T Page: 106

58. Rampant corruption and the absence of a legal system are risks that still restrain firms from initiating business withChina. Ans: T 59. Page: 106

China is the worlds fastest-growing economy. Ans: T Page 107 60. Hong Kong serves as the gateway toChina. Ans: T Page: 108 Industry Analysis: The EFE Matrix 61. In an EFE Matrix, opportunities often receive higher weights than threats, but threats too can receive high weights if they are especially severe or threatening. Ans: T Page: 109

62. Regardless of the number of key opportunities and threats included in an External Factor Evaluation Matrix, the highest possible total weighted score for an organization is 4.0, and the lowest possible total weighted score is 0.0. Ans: F Page: 109

The Competitive Profile Matrix (CPM) 63. Both a Competitive Profile Matrix and an EFE Matrix have the same meaning in the weights, ratings and total weighted scores. a. Ans: T Page: 111

64. The critical success factors in a Competitive Profile Matrix are often the same as those in an EFE Matrix. a. Ans: F Page: 111

Multiple Choice The Nature of an External Audit 65. a. b. c. d. e. Ans: b __________ is not part of an external audit. Analyzing competitors Analyzing financial ratios Analyzing available technologies Studying the political environment Analyzing social, cultural, demographic and geographic forces Page: 83

66. Identifying and evaluating key social, political, economic, technological and competitive trends and events comprise a. b. c. d. e. Ans: c 67. a. b. c. d. e. 68. a. b. c. d. e. Ans: c 69. a. b. c. d. developing an effective mission statement. conducting an internal audit. performing an external audit. formulating strategy. implementing strategy. Page: 83 The process of performing an external audit needs to include: only top level managers, as its a planning function. as many managers and employees as possible. primarily front-line supervisors between 15 to 20 managers for it to be valid stockholders and external government agencies Ans: b Page: 83 To perform an external audit, a company first must: get an approval from the Securities and Exchange Commission perform an internal audit gather competitive intelligence and information about external trends hire a consultant to develop a comprehensive strategic plan. all of these Page: 84 Freund emphasizes that key external factors should be all of these except: important to achieving long-term and annual objectives. measurable. relatively few in number. applicable to all competing firms.

e. hierarchical in the sense that some will pertain to the overall company while others will be more narrowly focused. Ans: c Page: 84 CHAPTER 4 The Internal Assessment True/False The Nature of an Internal Audit 1. Opportunities are a firms distinctive competencies that cannot be easily matched or imitated by competitors. Ans: F Page: 123

The process of performing an internal audit, compared to the external audit, provides more opportunity for participants to understand how their jobs, departments and divisions fit into the whole organization. 1.2. Ans: T Page: 123

3. An internal audit task force of managers could be charged with determining a specific number (usually 10 to 20) of the most important strengths and weaknesses. Ans: T Page: 124

The Resource-Based View 4 Proponents of the resource-based view argue that external factors are more important than internal factors for a firm in achieving and sustaining competitive advantage Ans: F Page: 125

5. The basic premise of the research-based view is that the mix, type, amount and nature of a firms internal resources should be considered first and foremost in devising strategies that can lead to sustainable competitive advantage. Ans: T Page: 125

Integrating Strategy and Culture 6 The subtle, elusive and largely unconscious forces that shape the workplace are captured by the organizational culture. Ans: T Page: 126

7.

Cultural products include values, beliefs, stories, and language. Page: 126

Ans: T

8. Metaphors are handed-down narratives of some wonderful event that is based on history but has been embellished with fictional detail. Ans: F Page 127

9. A ritual is a standardized, detailed set of techniques and behaviors that manage anxieties but seldom produce intended, technical consequences of practical importance. Ans: T 10. Ans: T 11. Ans: T 12. The U.S. understanding of Far Eastern cultures is a strength its firms have in competing with Pacific Rim firms. Ans: F 13. Ans: F Page: 129 In China, to show that you enjoyed your meal, you should completely finish your food. Page 129 Page 127 In China, business behaviors revolve around guanxi, or personal relations. Page: 128 Linkages between a firms culture and strategies often determine succe

14. The smile is one form of communication that works the same worldwide. Ans: T Page 129

15 In the U.S., personal achievement and accomplishments are more important than time spent with the family and the quality of relationships espoused by some cultures. Ans: T Page: 130

16. Punctuality, in general, is revered in all cultures of the world. Ans: F Page: 130

17. In the United States, an amicable relationship is often mandatory before conducting business. Ans: F Management 18. Allocating resources is one of the five basic activities (functions) performed by managers. Page: 131

Ans: F 19. Ans: T 20. Ans: F

Page: 131 The only certain thing about the future of any organization is change. Page: 131 Organizing is the cornerstone of effective strategy formulation. Page: 132

21. Planning should be performed mostly by middle management and then presented to top management for analysis and approval. Ans: F Page: 132

22. Controlling is the management function that is most important for the evaluation stage of the strategic management process. Ans: T Page 132

23. The purpose of organizing is to achieve coordinated effort by defining task and authority relations. Ans: T 24. Ans: T 25. Ans: F 26. Ans: F Marketing 27. There are seven basic functions of marketing: customer analysis, selling, product and service planning, pricing, distribution, marketing research and opportunity analysis. Ans: T 28. Ans: T Page: 136 A form of customer analysis is administering customer surveys. Page: 136 Page: 133 Motivation is one explanation why some people work hard and others do not. Page: 134 The management function of organizing is included in human resource management. Page: 135 The controlling function of management is synonymous to strategy formulation. Page: 127

29. Successful strategy formulation generally rests upon the ability of an organization to sell some product or service.

Ans: F

Page: 137

30. A new trend is to base advertising rates solely on sales rates with regard to advertising products or services on the Internet. Ans: T Page: 137

31. The Internet was the fastest-growing segment of U.S. advertising spending in 2004 compared to 2003. Ans: T Page 137

32 Pfizer, which has the worlds largest drug sales force, was planning on increasing their sales force by 15% in Ans: F Page 137

33. Test marketing is used more frequently by industrial companies than consumer goods companies.Ans: F Page: 137 34. Five major stakeholders that affect pricing decisions are consumers, governments, suppliers, distributors and competitors. Ans: T Page: 138

35. Distribution involves warehousing, marketing research, distribution channels, wholesaling and retailing. Ans: F Page: 138

36. Distribution becomes especially important when a firm is striving to implement a product development or backward integration strategy. Ans: F Page: 138

37. Marketing research is the systematic gathering, recording and analyzing of data about problems relating to the marketing of goods and services. Ans: T Page: 139

38. An opportunity analysis is an appraisal of the costs, benefits and risks associated with marketing decisions. Ans: T Finance/Accounting 39. Three areas, according to James Van Horne, comprise the functions or basic decision areas of finance: the investment decision, the financing decision and the earnings decision. Page: 139

Ans: F 40. Ans: F

Page: 141 Financial ratios are not applicable to nonprofit organizations. Page: 141

41. Dividend decisions concern issues such as the percentage of earnings paid to stockholders, the stability of dividends paid over time and the repurchase or issuance of stock. Ans: T 42. Ans: T 43. T 44. F 45. F Page: 141 The idea that paying dividends results in a higher stock price is a myth. Page: 141 Activity ratios measure how effectively a firm is using its resources.Ans: Page: 143 Leverage ratios measure a firms ability to meet maturing short-term obligations. Ans: Page: 143 Total assets turnover ratio is calculated by dividing sales by fixed assets. Ans: Page 144

46. Financial ratio analysis rarely has to go beyond the actual calculation and interpretation of ratios Ans: F 47. Ans: T Page 145 A limitation of financial ratios is the fact that they are based on accounting data. Page: 145

Production/Operations 48. Ans: F Capacity decisions concern the design of the physical production system. Page: 147

49. In most industries, only minor costs of producing a product or service are incurred within operations, so production/operations does not have great value as a competitive weapon in a companys overall strategy. Ans: F Page: 148

50.Increased efficiency, quality, productivity and job satisfaction can come from cross-training workers.Ans: T Page: 149 Research and Development

51. Four common approaches to determine R&D budget allocations used successfully are: (1) finance as many project proposals as possible; (2) use a percentage-of-sales method; (3) budget for R&D about what competitors spend; or (4) decide how many successful new products are needed and work backwards to estimate the required R&D investment. Ans: T 52. Ans: T 53. Ans: F Page: 151 Internal R&D and contract R&D are the two basic forms of R&D in organizations. Page: 151 Spending on research and development is steadily decreasing in the United States. Page: 152

Management Information Systems

54. The functions of information systems are growing in importance because organizations are becoming more complex, decentralized and globally dispersed.Ans: T Page: 153 Value Chain Analysis (VCA) 55. Value Chain Analysis can enable a firm to better identify its own strengths and weaknesses especially as compared to competitors Value Chain Analyses. Ans: T Page: 154

56. Although a useful step in the strategic management process, value chain analysis can rarely help a firm monitor whether its prices and costs are competitive. Ans: F Page 155

57. Benchmarking is an analytical tool used to determine whether a firms value chain activities are competitive compared to rivals. Ans: T Page 157

The IFE Matrix 58. Internal Factor Evaluation Matrix is a summary step when conducting an internal strategic-management audit. Ans: T 59. Page: 157 The Internal Factor Evaluation Matrix should include from 10 to 20 key factors

Ans: T Multiple Choice

Page: 158

The Nature of an Internal Audit 60. A firms strengths that cannot be easily matched or imitated by competitors are called

a. b. c. d. e.

internal audits. distinctive competencies. external audits. special properties. internal properties.

Ans: b 61. a. b. c. d. e. Ans: c 62. business. a. b. c. d. e.

Page: 115 Who should perform an internal audit? A private auditing firm The organizations accounting department Managers from different units of the organization A team of top-level managers and lower-level employees The chief executive officer Page: 116 _______ exemplifies the complexity of relationships among the functional areas of Government audit External audit Financial ratio analysis Environmental scanning Distribution strategy

Ans: c

Page: 116

The Resource Based Web 63. The internal resource categories used in the resource-based approach are physical resources, human resources and a. b. c. d. e. Ans: c 64. a. b. c. d. e. Ans: a 65. a. b. c. d. e. Ans: d financial resources. shareholder resources. organizational resources. natural resources. technological resources. Page: 117 Organizational resources include all of the following except: employee training. firm structure. planning processes. information systems. copyrights. Page: 117 Empirical indicators are resources that are either rare, hard to imitate, or expensive. inexpensive. easily substitutable. not easily substitutable. inefficient. Page: 117

Integrating Strategy and Culture

66. 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 called a. b. c. d. e. Ans: d 67. a. b. c. d. e. Ans: b dysfunctional behavior. groupthink. behavior modification. organizational culture. internal audit effect. Page: 118 Which of the following is not a cultural product? Rites Emotions Rituals Sagas Symbol Page: 118

68. A standardized, detailed set of techniques and behaviors that manage anxieties, but seldom produce intended, technical consequences of practical results are called

a. b. c. d. e. Ans: d

folktales. rites metaphors rituals values Page: 119

69. What are historical narratives describing the unique accomplishments of a group and its leaders, usually in heroic terms.

a. b. c. d. e. Ans: b 70. a. b. c. d. e. Ans: a

rites sagas stories myths folktales Page: 119 Life-directing attitudes that serve as behavioral guidelines are called values. rites. beliefs metaphors legend Page: 119

71. In Europe, it is generally true that the farther __________ on the continent, the more participatory the management style. a. b. c. d. e. Ans: d south east west north southeast Page: 120

72. Americans place an exceptionally high priority on __________ whereas many foreigners place more worth on __________. a. b. c. d. time; relationships relationships; time silence; time silence; relationships

e. Ans: a Management

close personal distance; ample personal distance Page: 122

73. What is the essential bridge between the present and the future that increases the likelihood of achieving desired results? a. b. c. d. e. Ans: b 74. a. b. c. d. e. Ans: c 75. a. b. c. d. e. Ans: a Motivating Planning Controlling Staffing Organizing Page: 123 All of the following are basic duties of a manager except: staffing. planning. consolidating. organizing. motivating. Page: 123 What is an up-front investment in success? Planning Organizing Motivating Staffing Controlling Page: 123

76. Which function of management includes areas such as job design, job specification, job analysis and unity of command?

a. b. c. d. e. Ans: b 77. a. b. c. d. e. Ans: a 78. a. b. c. d. e. Ans: b

planning organizing motivating staffing controlling Page: 124 Who does a planning horizon of two to five years applies to? top management general management middle management lower management all levels of management Page: 124 Synergy is synthetic energy. when a team effort is used to achieve desired results. when individuals work separately to achieve desired results. when financial expectations of the firm are decided upon. employee energy. Page: 125

79. Which management function includes breaking tasks into jobs, combining jobs to form departments and delegating authority? a. b. c. d. motivating staffing organizing controlling

e. Ans: c

planning Page: 125

80. Which function of management is concerned with span of control and chain of command? a. b. c. d. e. Ans: b planning organizing controlling directing evaluating Page: 125

81. Which of the following is the process of influencing people to accomplish specific objectives? a. b. c. d. e. Ans: b Staffing Motivating Planning Controlling Organizing Page: 126

82. a. b. c. d. e. Ans: e 83.

_______ is a major component in motivation. Forecasting Organizational structure Recruiting Management development Communication Page: 126 Staffing involves all of these activities except:

a.
b. c. d. e. Ans: c

recruiting
transferring. customer analysis. managing union relations. training and developing. Page: 127

CHAPTER 6
Strategy Analysis and Choice

True/False
The Nature of Strategy Analysis and Choice

1. An organizations present strategies, objectives and mission provide a basis for generating and evaluating feasible alternative strategies, coupled with the external and internal audit information.Ans: T Page: 196-197
2. Strategic analysis and choice largely involves making objective decisions based on subjective information.

Ans: F

Page: 197

3. Identifying and evaluating alternative strategies shouldnt involve the managers and employees who earlier assembled the organizational vision and mission statements, performed the external audit and conducted the internal aud . Ans: F Page: 198 A Comprehensive Strategy-Formulation Framework 4. The first stage of the strategy-formulation framework is the input stage, followed by the matching stage. Ans: T Page: 198 5. Stage 2 in the strategy-formulation framework involves a single technique, the Quantitative Strategic Planning Matrix.Ans: F Page: 198 6. The Internal Factor Evaluation Matrix and the External Factor Evaluation Matrix are part of the final stage of the strategy formulation framework.Ans: F Page: 198 7. The Threats-Opportunities-Weaknesses-Strengths (TOWS) Matrix, the Strategic Position and Action Evaluation (SPACE) Matrix, the Boston Consulting Group (BCG) Business Portfolio Matrix, the InternalExternal (IE) Business Portfolio Matrix and the Grand Strategy Matrix are included in stage two of the strategy-formulation framework.Ans: T Page: 198 The Input Stage
8. Basic input information for the matching and decision stage matrices is provided by the information derived from SPACE, TOWS and BCG matrices.Ans: F Page: 198

9. Strategists themselves, not analytical tools, are always responsible and accountable for strategic decisions.Ans: T Page: 199

10. The divisions of an organization should utilize strategy-formulation analytical tools to develop their own strategies and objectives. Ans: T Page: 199 11. Good intuitive judgment is always needed to determine appropriate weights and ratings in the input stage matrices.Ans: T Page: 199 The Matching Stage 12. The number of internal factors and external factors in the matching stage is reduced to generate feasible strategies.Ans: F Page: 199 13. Ans: T The purpose of matching key factors is to generate feasible alternative strategies. Page: 199

14. To effectively formulate competitive strategies, an organization should match its external opportunities and threats.Ans: F Page: 199 15. SO strategies are based on using a firms internal strengths to take advantage of external opportunities and threats.Ans: F Page: 200 16. Ans: F 17. Ans: F Matching strengths with weaknesses is how SW strategies are created. Page: 200 A TOWS Matrix is composed of four cells for four types of strategies it creates. Page: 200

18. The purpose of each stage 2 matching tool is to generate feasible alternative strategies, not to select or determine which strategies are best.Ans: T Page: 200 19. Only to get into a situation where they can work from strengths to take advantage of opportunities, organizations generally will pursue the other three types of strategies (WO, ST, or WT).Ans: T Page: 200-202 20. From matching an internal weakness with an external threat, a WT strategy in the TOWS Matrix could result.Ans: F Page: 201 21. Ans: T 22. Ans: T WT strategies are defensive tactics. Page: 201 Matching techniques include both the SPACE Matrix and the TOWS Matrix. Page: 203

23. The ES and CA dimension variables in a SPACE Matrix are assigned a numerical value ranging from 1 (best) to 6 (worst).Ans: T Page: 204 24. The most important determinants of an organizations overall strategic position are considered to be the two internal dimensions, financial strength (FS) and competitive advantage (CA), and the two external dimensions, industry strength (IS) and environmental stability (ES). Ans: T Page: 204

25. Ans: F

The SPACE Matrix axes are labeled aggressive, conservative, defensive and competitive. Page: 204

26. The four strategies of the SPACE Matrix are aggressive, conservative, offensive and defensive.Ans: F Page: 204 27. The appropriate strategies are intensive, integration, defensive and diversification when a firms directional vector is located in the aggressive quadrant of the SPACE Matrix. Ans: F Page: 205

28. Conservative strategies in a SPACE Matrix most often include intensive strategies and concentric diversification.Ans: T Page: 205 29. Integration and diversification strategies are most often included in competitive strategies in a SPACE Matrix.Ans: F Page: 205 30. T Relative market share position is given on the x-axis of the BCG Matrix.Ans: Page: 206

31. The midpoint on the x-axis of a BCG Matrix, which corresponds to a division that has half the market share of the leading firm in the industry, is typically set at 0.05. Ans: F Page: 206

32. In performing SPACE analysis, barriers to entry into market are best categorized as a competitive advantage (CA) variable.Ans: F Page: 206 33. In the SPACE Matrix, growth potential, profit potential and financial stability could all fall under the category of industry strength.Ans: T Page: 206 34. By examining the relative market share and industry growth rate of each division relative to all other divisions with the BCG matrix, a multidivisional organization is allowed to manage its portfolio of businesses.Ans: T Page: 206 35. Ans: F Product quality is an important consideration in the BCG Matrix. Page: 206

36. Technical know-how, market share and product life cycle are some examples of areas to consider when evaluating a companys competitive advantage.Ans: T 37. Ans: T The Boston Consulting Group Matrix is good for firms with many profit centers. Page: 206

38. The companys total sales and number of employees are key considerations in the Boston Consulting Group Matrix.Ans: F Page: 206 39. The firm should pursue conservative strategies if the coordinates of a SPACE directional vector are (1,4).Ans: F Page: 207 40. A firm should pursue defensive strategies if the coordinates of a SPACE directional vector are (2,3).Ans: F Page: 207

41. The firm should pursue aggressive strategies if the coordinates of a SPACE directional vector are (5,4)Ans: T Page: 207 42. A firm should pursue competitive strategies if the coordinates of a SPACE directional vector are (4,6). Ans: F Page: 207

43. Star, question mark, cash cow and dogs are the four quadrants exhibited by the SPACE Matrix.Ans: F Page: 208 44. The size of the circle in a BCG Matrix corresponds to the proportion of corporate revenue generated by that business unit. The pie slice indicates the proportion of corporate profits generated by that division.Ans: T Page: 208 45. Divisions with a low relative market share position and a high industry growth are called question marks in the BCG Matrix.Ans: T Page: 208 46. Cash cows represent the organizations best long-run opportunities for growth and profitability. Ans: F Page: 209 47. Divisions in Quadrant IV are called dogs because the organization must decide whether to strengthen them by pursuing intensive strategies or engaging in joint venture. Ans: F 48. The major overall benefit of the BCG Matrix is that it draws attention to the cash flow, investment characteristics and needs of an organizations various divisions.Ans: T Page: 210 49. Ans: F Dogs on the BCG Matrix usually become stars after market penetration. Page: 210

50. Generally, the BCG Matrix and the IE Matrix are used only in formulating strategies in multidivisional firms.Ans: T Page: 211 51. Ans: T Viewing businesses as star, cash cow, dog, or question mark is an oversimplification. Page: 211

52. The BCG Matrix does not reflect whether or not various divisions or their industries are growing over time. Ans: T Page: 211 53. Having no temporal qualities, the BCG Matrix is a snapshot of an organization at a given point in time.Ans: T Page: 211 54. Ans: T Both IE and BCG Matrices are called portfolio matrices. Page: 211

55. On the x-axis of the IE Matrix, an internal factor evaluation score of 2.5 represents a weak internal position.Ans: F Page: 212 56. Ans: F BCG Matrix requires more information about the divisions than the IE Matrix. Page: 212

57. The IE Matrix can be divided into three major regions that have different strategy implications: grow and build, hold and maintain and harvest or divest. Ans:t 58. The Grand Strategy Matrix is based on two evaluative dimensions, market share and market growth.Ans: F Page: 213 59. Positioned in or around cell IX in the IE Matrix, successful organizations are able to achieve a portfolio of businesses.Ans: F Page: 213
60. According to the Grand Strategy Matrix, when a Quadrant I firm is too heavily committed to a single product, then concentric diversification may reduce the risks associated with a narrow product Ans: T 61. Quadrant III organizations compete in rapid-growth industries and have weak competitive positions, according to the Grand Strategy Matrix. Ans: F Page: 214

The Decision Stage

62. The Quantitative Strategic Planning Matrix is an excellent decision stage analytical tool.\

Ans: T

Page: 215

63. Small companies could skip Stages 1 and 2 of the strategy-formulation framework and develop a QSPM.Ans: F Page: 216 64. To objectively evaluate feasible alternative strategies identified in Stage 2, the QSPM uses input information derived from Stage 1.Ans: T Page: 216 65. The left column of a QSPM consists of information taken directly from the Internal Factor Evaluation Matrix and the External Factor Evaluation Matrix. Ans: T Page: 216 66. Alternative strategies derived from the TOWS Matrix, SPACE Matrix, BCG Matrix, IE Matrix and Competitive Profile Matrix are included in the QSPMs top row.Ans: F Page: 216 67. Any number of sets of alternative strategies can be included in the QSPM, and any number of strategies can comprise a given set. Ans: T Page: 216 68. Step 1 of a QSPM assigns weights to each key external and internal factor. Page: 217

Ans: F

69. The Sum Total Attractiveness Scores are defined by the product of multiplying the weights (step 2) by the attractiveness scores (step 4) in each row of the QSPM.Ans: F 70. Total attractiveness scores are defined as the sum of the attractiveness scores in a given column of the QSPM.Ans: F Page: 218 71. The relative desirability of one strategy over another is indicated by the magnitude of the difference between the total attractiveness scores in a given set of strategic alternatives. Ans: F 72. Ans: F Page: 218 Two limitations of the Quantitative Strategic Planning Matrix are weights and ratings.\ Page: 219

73. A positive feature of OSPM is that sets of strategies can be examined sequentially or simultaneously. Ans: T Page: 219 74. One positive feature of OSPM is that it does not require intuitive judgments and educated assumptions. Ans: F

Multiple Choice
The Nature of Strategy Analysis and Choice 95. a. b. c. d. e. Strategy analysis and choice largely involves making __________ decisions based on __________ information. long-term; short-term subjective; objective short-term; long-term subjective; short-term objective; subjective

Ans: b Page: 196 A Comprehensive Strategy-Formulation Framework 96. Stage 1 consists of IFE, EFE and CPM. What stage is this in the strategy formulation framework?

a. Output b. Decision c. Input d. Matching e. Functional Ans: c Page: 198 97. Which stage in the strategy-formulation framework focuses on generating feasible alternative strategies? a. Input b. Output c. Decision d. Stage 3 e. Matching Ans: e Page: 198 98. The ________ stage involves a single technique, QSPM. a. Stage 2 b. Decision c. Input d. Matching e. Stage 1 Ans: b Page: 198
99. A(n) __________ reveals the relative attractiveness of alternative strategies and thus provides an objective basis for selecting specific strategies.

a. TOWS b. SPACE c. QSPM d. IFE e. CPM Ans: c Page: 198

100. Each of the nine techniques included in the strategy formulation framework rely on the use of a. strictly factual data. b. luck. c. financial formulas and statistics. d. intuition and analysis. e. synergy. Ans: d The Input Stage
101.

Page: 198

The __________ stage includes an Internal Factor Evaluation Matrix and a Competitive Profile Matrix.

a. b. c. d. e.
Ans: a

input matching decision penetration research

Page: 198

102. b. c. d.

__________ is not an input stage matrix. a. IFE IE CPM EFE

Ans: b Page: 198 The Matching Stage 103. __________ is not a Stage 2 matching technique. a. The SPACE Matrix b. The Grand Strategy Matrix c. The Competitive Profile Matrix d. The Business Portfolio Matrix e. The TOWS Matrix
Ans: c Page: 198

104. The __________ of the strategy formulation framework contains the TOWS Matrix, the SPACE Matrix, the Grand Strategy Matrix and the Competitive Profile Matrix. a. input stage b. matching stage c. decision stage d. output stage e. None of the above
Ans: e Page: 199

105.

__________ is not a TOWS strategy. a. SO b. WO c. SW

d. ST

e.

WT

106.

d.
Ans: b 107.

Ans: c Page: 200 Poor product quality, coupled with reliable suppliers, would suggest a. WT strategies. b. WO strategies. c. ST strategies. SO strategies.
Page: 200 Matching internal strengths with external opportunities is part of which section of the TOWS Matrix?

a. The WT cell b. The WO cell c. The ST cell d. The SO cell e. The center four cells Ans: d Page: 200 108. The most ideal situation for a company to be in on the TOWS Matrix would be if they had all a. SO strategies. b. WO strategies. c. ST strategies. d. WT strategies.
Ans: a Page: 200

109. Which strategies aim at improving internal weaknesses by taking advantage of external opportunities? a. SO
b. WO

c. SW d. ST e. WT Ans: b Page: 200 110. The purpose of each Stage 2 matching tool is to a. identify the strengths, weaknesses, opportunities and threats of the firm. b. generate the feasible alternative strategies for the firm. c. pick the best strategy for the firm to carry out. d. decide who the companys major competitors are.
Ans: b Page: 200

111. If an organization were to match high employee turnover with increased local competition, what type of strategies would be appropriate? a. SO strategies b. WO strategies c. ST strategies d. WT strategies
Ans: d 112. a. b. c. SW WO SW Page: 201 Which strategies use a firms strengths to avoid or reduce the impact of external threats?

d. e.

ST WT

Ans: d Page: 201 113. __________ strategies are defensive tactics directed at reducing internal weaknesses and avoiding environmental threats. a. SO b. WO c. SW d. ST e. WT
Ans: e Page: 201

114.

e.
Ans: c

A TOWS Matrix is composed of __________ cells. a. four b. six c. nine d. eight two
Page: 201

115. Which of the following is not a step of a TOWS Matrix? a. List the firms key external threats b. Match strengths with external opportunities and record the resultant SO strategies in the appropriate cell c. Match internal weaknesses with external threats and record the resultant WT strategies d. List the firms external weaknesses e. List the firms external threats
Ans: d Page: 202

116.

c. d. e.
Ans: d

Which of these is not a SPACE Matrix quadrant? a. Aggressive b. Defensive Competitive Offensive Conservative
Page: 204

117. __________ reveals whether aggressive, conservative, defensive, or competitive strategies are most appropriate. a. Grand Strategy Matrix b. SPACE Matrix c. Competitive Profile Matrix d. TOWS Matrix e. QSPM
Ans: b Page: 204

118.

c. d.

The two positive-rated dimensions on SPACE Matrix are a. FS and CA. b. CA and ES. FS and IS. IS and ES.

e.
Ans: c

FS and ES.
Page: 204

119. A firm located in the aggressive quadrant of the SPACE Matrix should use its internal strengths to a. take advantage of external opportunities. b. overcome internal weaknesses. c. avoid external threats. d. do all of the above. Ans: d Page: 205 120. Financial strengths are measured on the SPACE Matrix by variables such as investment, leverage, liquidity, working capital and a. ease of entry into the market. b. product quality. c. operations and facilities. d. working capital. Ans: d Page: 206
121. What is the BCG Matrix ideal for analyzing?

a. b. c. d. c. Ans: a 122. a. b. c.

Companies with more than one division All companies

Companies with annual sales greater than $1 million Companies with annual sales of less than $1 million Large companies Page: 206 The BCG measures relative market share position as a divisions sales compared to the sales of similar companies. a divisions market share divided by the market share of the largest rival in that industry. the number of products a division has on the market compared to the competitors.

d. the number of employees in a division compared to the number of employees in the largest rival in the industry. Ans: b Page: 206

123. __________ should not be included as a factor in the Environmental Stability (ES) computation. a. b. c. d. Technological changes Competitive pressure Rate of inflation Liquidity

e. Ans: d 124.

Seasonal effects Page: 206 What are two external dimensions of SPACE Matrix? a. b. Environmental stability and industry strength. Environmental stability and competitive advantage.

c. d. e. Ans: a
125.

Industry strength and competitive advantage Competitive advantage and financial strength. Financial strength and industry strength. Page: 206

If the SPACE Matrix directional vector falls in the aggressive quadrant, which of these strategies are not appropriate?

a. b. c. d. e. Ans: d

Intensive Integrative

Diversification Defensive Combination Page: 206

126. Which of these quadrants in SPACE Matrix implies staying close to the firms basic competencies and not taking excessive risks?

a. b. c. d. e. Ans: a
127.

Conservative Competitive

Defensive Aggressive None of these Page: 206

______________ is common to the defensive and conservative quadrants of a SPACE Matrix.

a. b. c. d.

Product development Concentric diversification

Divestiture Market penetration

e. Ans: b

Retrenchment Page: 206

128. What type of strategies would you recommend when a firms SPACE Matrix directional vector has the coordinates (-2, +3)? a. b. c. d. e. Ans: b 129. Aggressive Conservative

Competitive Defensive Integrative Page: 207 In the SPACE analysis what does a (+6, +3) strategy profile portray? a. b. c. d.
e.

A strong industry An unstable environment A stable environment A weak industry

A weak financial position Page: 207

Ans: a 130.

How would a division with a low relative market share position in a high growth industry be described?

a. b. c. d. e. Ans: a Star

Question mark Cash cow

Stuck-in-the-middle Dog Page: 208

131. When a division of an organization has a high relative market share and is in a fastgrowing industry, it is called a a. b. c. star. cash cow.

question mark.

d.

dog. Page: 209

Ans: a

132. A division with a high relative market share position in a low-growth industry can be described as a a. b. c. d. e. Ans: b 133. star. cash cow.

question mark. dog. failure. Page: 210 Which of these is an attractive strategy for a cash cow division? a. b. Concentric diversification Horizontal integration

c. d. e. Ans: a 134.

Conglomerate diversification Backward integration Forward integration Page: 210 Most likely, a cash cow was what in the past? a. b. dog question mark

c. d. e. Ans: d 135.

calf star failure Page: 210 The BCG Matrix limitations include a. b. being a time-consuming and costly analysis. requiring at least three years worth of data.

c. d.

not reflecting divisional or industry growth over time. not allowing a company to be classified as somewhere in between two categories.

e. Ans: e 136. a. b. c. d.
Ans: b

both c & d. Page: 211 The BCG Matrix and the IE Matrix are different in all of the following aspects except their axes. the IE requires more information about the divisions than the BCG Matrix. the way they plot organizational divisions. their strategic implications.
Page: 212

137. What has four quadrants based on two dimensions: competitive position and market growth? a. b. c. d. e. Ans: d
138.

Competitive Profile Matrix TOWS Matrix

SPACE Matrix Grand Strategy Matrix QSPM Page: 213

Firms located in which quadrant of the Grand Strategy Matrix are in an excellent strategic position?

a. b. c. d. Ans: a III IV

I II

Page: 213

139. __________ in the Grand Strategy Matrix is recommended for a firm with rapid market growth and a strong competitive position. a. b. c. d. e. Market penetration Conglomerate diversification

Joint venture Retrenchment Liquidation

Ans: a

Page: 213

140. The Grand Strategy Matrix can be used to evaluate competitive position and market growth for a. b. c. d. Ans: c individual products. company divisions and individual products.

whole companies and company divisions. just whole companies. Page: 213

141. For companies located in Quadrant III of the Grand Strategy Matrix, the first strategy recommended is a. b. c. d. Ans: a extensive cost and asset reduction. asset expansion.

employee expansion. immediate liquidation of assets. Page: 214

142. Although Quadrant _____ companies are growing, according to the Grand Strategy Matrix, they are unable to compete effectively, and they need to determine why the firms current approach is ineffective and how the company can best change to improve its competitiveness. a. b. c. d. Ans: b I II III IV Page: 214

143. Quadrant _____ organizations have a strong competitive position but are in a slow-growth industry, according to the Grand Strategy Matrix. a. b. c. d. Ans: d I II III IV Page: 214

144. A(n) __________ strategy could be most effective when a firm has excess production capacity and its basic industry is experiencing declining sales and profits. a. b. c. d. e. Ans: c The Decision Stage 145. __________ is included in the decision stage of the strategy formulation framework. a. b. c. d. e. Ans: b
146.

backward integration forward integration concentric diversification joint venture integration Page: 215

Internal Factor Evaluation Matrix Quantitative Strategic Planning Matrix

BCG Business Portfolio Matrix Grand Strategy Matrix SPACE Matrix Page: 215

The top row of a QSPM consists of alternative strategies derived from all of these except

a. b. c. d. e. Ans: d

TOWS Matrix. BCG Matrix.

Space Matrix. CPM Matrix. IE Matrix. Page: 216

147. The __________ determines the relative attractiveness of various strategies based on the extent to which key external and internal critical success factors are capitalized. a. b. c. d. BCG Matrix SPACE Matrix TOWS Matrix IE Matrix

e.
Ans: e 148.

QSPM
Page: 216 In the QSPM, a minimum of _______ internal and ______ external critical success factors should be included.

a. b. c. d. e. Ans: c 149. a. 10; 10 40; 40 20; 20

2; 2 4; 4

Page: 217 Which of the following is the first step in developing QSPM? Compute the Total Attractiveness Scores

b. Examine the Stage 2 matrices and identify alternative strategies the organization should consider implementing c. d. Assign weights to each key external and internal factor Determine the Attractiveness Scores

e. Make a list of the firms key external opportunities/threats and internal strengths/weaknesses in the left column of the QSPM Ans: e Page: 217-218

150. What term is defined as the product of multiplying ratings by attractiveness scores in each row of the QSPM? a. b. c. d. e. Ans: a 151. a. b. b. Total attractiveness scores Sum total attractiveness scores Weighted scores Total weighted scores Factors Page: 218 What should be included in strategies in the QSPM? all strategies suggested by Stage 2 matrices. only the best or most promising strategies suggested by Stage 2 matrices. strategies that will assure organizational success.

c.
Ans: b 152.

strategies that encourage corporate expansion.

Page: 218 What is the highest number of strategies that can be examined at one time with the QSPM?

a. b. c. d. e. Ans: e 153. a. b. c.

5 2 1 10 There is no limit. Page: 219 Which of these do QSPM limitations include? Only a few strategies can be evaluated simultaneously The cost of doing the analysis Subjective judgments and educated guesses are required

d. It is only as good as the prerequisite input information and matching analyses upon which it is based e. Ans: e Both c & d Page: 219

Cultural Aspects of Strategy Choice

154. What includes the set of shared values, beliefs, attitudes, customs, norms, personalities, heroes and heroines that describe a firm?

a. b. c. d. e.

Strategy Culture Mission Objectives QSPM Page: 219

Ans: b 155.
a. b. c.

The culture of a firm is important when considering strategies because

cultural products can support strategies so managers can often implement changes swiftly and easily. everyone in the firm should have a vote as to which strategies to implement. culture can dictate the choice of strategies.

d.

Employees always welcome cultural change.

Ans: a

Page: 219-220

The Politics of Strategy Choice 156. ones. a. b. c. d. e. Ans: c

157.

__________ is known as the tactic of shifting focus from specific issues to more general Equifinality Focus on higher-order issues Generalization Satisficing None of the above Page: 221

__________ means it is possible to achieve similar results using different means or paths

a. b. c. d. e. Ans: d

Generalization Satisficing Focus on higher-order issues Equifinality Specialization Page: 221

The Role of a Board of Directors

158. Today, boards of directors are composed mostly of __________.

a. b. c. d. e. Ans: a
159.

outsiders management union employees stockholders Page: 222

Except for ________________, the roles and duties of a board of directors include all of these broad categories.

a. b.

control and oversight over management adhering to legal prescriptions

c. d. e.

consideration of stakeholders interests advancement of stockholders rights expansion of management stock options Page: 223

Ans: e
160.

According to Business Week, a good board of directors performs all of these responsibilities except

a. b. c. d. e.

link the CEOs pay to specific goals. place the entire board up for election every five years. require directors to retire at age 70. require each director to own a large amount of company stock. compensate board members only in company stock. Page: 223-224 What did Business Week conclude a board of directors should do? Ensure no more than two board members are insiders Limit the number of other boards a member can serve on Ban interlocking directorships All of the above
Page: 223-224

Ans: b 161. a. b. c. d.
Ans: d