Business Mid-Term MCQs

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Midterm Exam: Please review each question carefully before selecting an answer. Each
question is worth 2 points. The exam consists of series of multiple choice and short answer
questions.
Chapter one
1. Define and briefly describe any five components of the strategic management model? Please
refer to the discussion on "Components of the Strategic management Model" on pages 11-15.
2. Social responsibility is a critical consideration for a company’s strategic decision makers since
A. Stockholders demand it
B. The mission statement must express how the company intends to contribute to the societies
that sustain it
C. It increases a company’s profits
D. It helps make decisions
3. Analysis of the quantity and quality of the company’s financial, human and physical resources
is a part of
A. Internal analysis
B. Mission statement
C. External environment analysis
D. Corporate goals
4. The external environment consists of:
A. The operating environment
B. Managers
C. Employees
D. Owners
5. Which one of the following is NOT an interactive segment of a firm’s external environment?
A. Functional
B. Remote
C. Industry
D. Operating
6. Which of these is NOT true about the behavioral effect of strategic management?
A. Strategy formulation activities enhance the firm’s ability to prevent problems
B. Resistance to change is reduced
C. Gaps and overlaps in activities among individuals and groups are increased to ensure the
checks and balance
D. The employee involvement is strategy formulation improves their understanding of the
productivity reward relationship in every strategy plan
7. The behavioral consequences of strategic management are similar to those of
A. authoritative decision making
B. centralized
decision making
C. autocratic decision making
D. participative decision making

8. Which of the following is a major function of the strategic management model?
A. It helps make profits for the firm
B. It helps in identifying key issues faced by the firm
C. It helps in deciding which products to sell
D. It depicts the sequence and relationships of the major components of the strategic
management process
9. Strategic management compromises nine critical tasks. Which of the following is NOT one of
the tasks?
A. Development of annual objectives compatible with grand strategies
B. Assessment of the company’s external environment
C. Selection of a particular set of long-term objectives and grand strategies
D. Evaluate the success of the strategic process
10. Strategic management involves the _____, directing, _____ and controlling of a company’s
strategy-related decisions and actions.
A. Financing; marketing
B. Planning; financing
C. Marketing; planning
D. Planning; organizing
11. When the dominance of the CEO approaches autocracy, the effectiveness of the form’s
strategic planning and management processes are likely to:
A. Enhance strategic planning but diminish its processes
B. Be greatly enhanced
C. Have no effect
D. Be diminished
Chapter 2
12. Differentiate between company philosophy and public image. Why should organizations care
to have either or both of these in its mission?
13. What is meant by company self-concept? Why is it an important mission statement
component?
14. Which one of the following is NOT an outcome designed to be accomplished by a company
mission?
A. To provide a unifying purpose for the organization
B. To provide a basis for strategic objective setting
C. To provide a basis for decision making
D. To reward stockholders
15. In general terms, the mission statement addresses all of the following questions EXCEPT
A. What are our economic goals?
B. What is our operating philosophy in terms of quality, company image and self-concept?
C. What customers do and can we serve?
D. Who are our competitors and how can we collaborate with them?
16. In general terms, which of the following questions is addressed by the mission statement?
A. How should we price our products?
B. What are our economic goals?
C. Which employees should we hire?
D. What leverage structure should we follow?

17. The process of defining the company mission for a specific business can be best understood
by
A. Thinking about the business at its inception
B. Looking at the industry attributes
C. Analyzing the regulatory requirements of what to include in a mission
D. Analyzing the most successful competitors in the marketplace
18. In deriving a mission statement, which of the following should be included?
A. Tax advantages
B. Secondary markets to be served
C. Concern for survival through growth
D. Employee rules and policies
19. When should a company redefine its mission?
A. When the competition have failed
B. When the board meets with top management annually
C. When the business is forced by competitive pressures to alter its products of market
D. When the government requires the business to redefine it
20. A mission statement should include all of these components EXCEPT
A. Basic types of products or services to be offered
B. The firm’s managerial philosophy
C. The public image the firm seeks
D. The government regulations the firm must meet
21. Three indispensable components of the mission statements are:
A. Basic product or service, primary markets and principal technology
B. Self-concept, managerial philosophy and public image
C. Concern for survival through growth, self-concept and primary markets
D. Economic goals, core competencies and primary and secondary customers
22. Growth means:
A. Change
B. Stability
C. Effectiveness
D. Efficiency
23. Growth means change, and _____ change is required in a _____ business environment.
A. proactive, dynamic
B. reactive, dynamic
C. proactive, stable
D. reactive, uncertain
24. In a dynamic business environment, ______ is essential.
A. Status quo
B. Compromising ethics in decision making
C. Proactive change
D. Adverse selection
25. The company’s philosophy is sometimes also called the:
A. Company creed
B. Corporate profile
C. Corporate motto
D. Corporate symbol

Chapter 3
26. Individuals and groups who are stockholders or employees of firms are called:
A. Outsiders
B. Insiders
C. Internal stakeholders
D. A special interest group
27. Which of these are NOT outside stakeholders?
A. Customers
B. Stockholders
C. Creditors
D. Union
28. Which of these represent a pollution prevention strategy in an organization?
A. Automation of manufacturing facility
B. Transforming business from manufacturing to service operations
C. Changing the materials used or redesigning how operations are bid out
D. Creating a pollution pit and putting all waste in it monthly

29. Each firm regardless of ____ must decide how to meet its perceived social responsibility.
A. Industry
B. National origin
C. Profitability
D. Size
30. Which of the following is NOT a type of social commitment that strategic managers need to
consider?
A. Economic
B. Political
C. Legal
D. Ethical
31. Which of these represents the most basic responsibilities of business?
A. Economic
B. Political
C. Legal
D. Ethical
32. The duty of managers, as agents of the company owners, to maximize stockholder wealth is
referred to as ________ responsibilities.
A. Legal
B. Discretionary
C. Economic
D. Ethical
33. Public relations activities and good citizenship are examples of which responsibilities of a
business organization?
A. Legal
B. Ethical
C. Discretionary
D. Economic
34. Brand identity is a determinant of which of these forces driving industry competition?
A. Entry
B. Rivalry
C. Buyer power
D. Supplier power
35. Differentiation of inputs represents a determinant of
A. Entry
B. Rivalry
C. Buyer power
D. Supplier power

36. In the economists’ "perfectly competitive" industry jockeying for position is unbridled and
entry to the industry is
A. Very easy
B. Prohibited by regulations
C. Moderated due to national security concerns
D. Very hard
37. Access to distribution channels is a major source of which competitive force?
A. Bargaining power of buyers
B. Threat of entry
C. Threat of substitute products
D. Bargaining power of suppliers
38. New entrants to an industry bring:
A. New capacity
B. New customers
C. Few resources
D. Bigger margins
39. Economies of scale in an industry refers to:
A. Savings that companies within the industry achieve due to increased volume
B. Declining average short run costs per unit
C. Improved contractual agreements with suppliers in the near term
D. Decreased barriers to entry to new firms attempting to enter the industry
40. Which of the following is a factor that does NOT foster brand identification?
A. Advertising
B. Customer service
C. Product differences
D. Price
41. Identify and briefly describe the different factors comprising the remote environment.
42. Discuss the three profound social changes in the recent years that affect the performance of a
firm.
Chapter 5

43. Repatriation of profits to home country represents which orientation of a global firm?
A. Ethnocentric
B. Regiocentric
C. Geocentric
D. Polycentric
44. Host country culture is a dominant factor in which orientation of a global firm?
A. Ethnocentric
B. Regiocentric
C. Geocentric
D. Polycentric
45. Global personnel development and placement occurs in which orientation of a global firm?
A. Ethnocentric
B. Regiocentric
C. Geocentric
D. Polycentric
46. Top-down governance structure is evident in which orientation of a global firm?
A. Ethnocentric
B. Regiocentric
C. Geocentric
D. Polycentric
Chapter 6
47. What is the product life cycle? What are its different stages?
48. Patents and trademarks are examples of
A. Tangible assets
B. Intangible assets
C. Capabilities
D. Competencies
49. Which of the following is NOT an example of an intangible asset?
A. Financial resources
B. Brand names
C. Company reputation
D. Organizational morale
Chapter 7
50. Few innovative ideas prove to be profitable because of:
A. Low development costs
B. Low pre-marketing costs
C. High research costs
D. High post-marketing costs
Bonus Questions
51. The acquisition of one or more businesses operating at the same stage of the productionmarketing chain is an example of:
A. Market development

B. Product development
C. Innovation
D. Horizontal acquisition
52. When the long-term strategy of a firm is based on growth through the acquisition of one or
more similar businesses operating at the same stage of the production-marketing chain, this is
called:
A. Vertical integration
B. Conglomeration
C. Horizontal acquisition
D. Liquidation
53. If a donut corporation acquires a flour company, this strategy would be called:
A. Vertical acquisition
B. Diversification
C. Conglomeration
D. Joint venture

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