Part 1 final exam STR / 581

Click on this link for answer key

https://www.coursemerit.com/solution-details/29338/Part-1-final-exam-STR--581

Part 2 final exam STR / 581

Click on this link for answer key

https://www.coursemerit.com/solution-details/41195/Part-2-final-exam-STR-581-

Part 3 final exam STR / 581

Click on this link for answer key

https://www.coursemerit.com/solution-details/41196/Part-3-final-exam-STR-581-
SCORE-2930-96.67
__________________________________________________________________________________

Part 1 final exam STR / 581

Click on this link for answer key
https://www.coursemerit.com/solution-details/29338/Part-1-final-exam-STR--581
1. Josh works as a clerical assistant in a law firm located in a small town. He is not satisfied with the
pay provided to him. His company is only one of two firms located in the town, and the other firm does not
have requirements for a similar job role. Which of the following is a constructive behavior that Josh is
likely to engage in?

Voicing his dissatisfaction on social networking sites

Quitting the job
Waiting for the management to increase his pay
Talking negatively about the firm

2. The managers at TeteTech Inc., a company that provides back-end support to multinational
technology firms, measure the company’s performance by assessing the time taken by its employees to
resolve customers’ queries. Based on the results, the managers find ways to increase the efficiency of
individual telephone operators. Which of the following tasks are the managers performing?

Organizing
Planning
Leading
Controlling

3. Lattel Inc. holds 50 percent of the market share for video games and 90 percent of the market
share for action figures. The management decides to cease investment in action figures and invest the
money generated from the sales of action figures in research and development for video games. Which of
the following is the likely reason behind the management’s decision?
The market for action figures grows at a high rate.
The company wants to increase its market share for video games.
The quality of the company’s action figures deteriorates over time.
The demand in the market for video games begins to decrease.

4. TechMark Inc. manufactures smartphones with higher RAMs to address consumers’ need to run
multiple applications without affecting the smartphone’s performance. To persuade the consumers to
purchase its products, the management runs social media campaigns targeting specific consumer needs.
Which of the following functional activities of the value chain is the management performing at this stage?

Production function
Sales function
Materials management function
Marketing function

5. Aitana Inc. produces different kinds of prescription drugs. Owing to the popularity of these drugs, the
management decides to diversify the company’s portfolio by entering into a new market segment. It
chooses to manufacture organic baby formulas. The marketing team that was successful in selling the
prescription drugs failed to attract a significant share of the new target market because it did not have the
expertise required to assess the new market. Which of the following organizational structures should the
company adapt to be successful in both the market segments?

Geographic structure
Functional structure
Product structure
Market structure

6. A manufacturing plant uses 2 kanbans to deliver inputs from its suppliers to the assembly line. When a
kanban is empty, it is sent back to the supplier for replenishment. The operations manager increases the
number of kanbans from 2 to 4 to meet a sudden rise in demand. Which of the following decisions should
the manager make to ensure that the input inventory is not overstocked when the demand subsides?

Increase the number of suppliers

Increase the quantity of inputs purchased
Decrease the quantity of goods produced
Decrease the number of kanbans

7. Max &Leaon’s, a popular hypermarket, attracts the best of salespeople with its popular commission
plans. Salespeople are paid huge incentives for every sale they make. Soon the management realizes
that salespeople are not interested in marketing the hypermarket’s services and hard-to-sell items. Which
of the following actions, if taken by the company, would motivate salespeople of Max &Leaon’s?

The company should provide additional incentives to salespeople who sell the hard-to-sell-items and
market its services.
The company should set a cap on the number of hard-to-sell items that salespeople can market.
The company should reduce the commission rates if salespeople do not sell the company’s services.
The company should replace sales-based incentives provided to salespeople with fixed wages.

8. Sara works as the marketing manager of a leading beverage producer. The company is accustomed to
promoting its products through newspapers and television. To keep up with the evolving trend of social
media marketing, Sara suggests that the company start investing in social media to promote its products.
If Sara wants to portray herself as a charismatic leader to the management, what should she do?
She should be confident when she pitches her idea to the management.
She should use coercion to encourage the management to consider her idea.
She should emphasize her personal interest in social media more than its benefits to the company.
She should recommend using only conventional methods of advertising.

9. Marreese works as a janitor in a company. She is fed up of her manager who has been verbally
abusing her. The fear of losing her job and further harassment causes her to refrain from escalating the
manager’s behavior to the senior manager. Through which of the following ways should Marreese resolve
the problem?

Quit the company and provide feedback during the exit process
Discuss the issue with an ombudsman
Take disciplinary action against the manager
Wait for the manage to realize his mistake

10. Airlines, as core service providers, provide tangible goods, such as food and beverages to the
passengers during flight. Core service providers must blend tangible goods with services. Based on the
above description, which of the following is a core service?

Hotels
Food products
Appliances
Teaching

11. Jasmine is a marketing manager. When one of her subordinates comes up with the idea to run a
social campaign to generate user awareness, Jasmine accepts without hesitation. She is used to
campaigning over traditional media, and she knows that a campaign over social media can invite quick
negative reviews. However, she is willing to take the risk. Jasmine’s actions portray her:

tendency to be low on agreeableness.

openness to experience.
conscientious nature.
tendency to feel distressed.

12. Trident Inc. operates in several industries. One of its division deals with desktop named Belwick. The
company management is planning to revamp Belwick, which produces a range of customized desktops.
Although Trident Inc. has a sizable share and is producing revenue, the market for its customized
desktops is rapidly declining. In this segment, Trident Inc.is facing reduced sales due to strong
competition in the market. Trident’s management wants Belwick’s marketing group to develop a strong
turnaround plan for the division.
Which among the following steps should be avoided by Belwick’s marketing group to survive in the
present market
Investing in customer relationship management
Developing a marketing strategy and plan
Capturing market insights
Inhibiting new product development, testing, and launching plans.

13. Andrea attends an interview in an IT company for a senior marketing manager’s position. During the
negotiation process, she mentions that the compensation offered by the company is satisfactory, but it is
not sufficient to splurge on yearly trips. Which of the following is an indirect financial payment that will
satisfy Andrea’s financial needs?

A paid vacation
A sales-based commission
A time-based pay rate
A performance-based incentive

14. X Wheels, a wheel manufacturing company, was using a single machine to produce wheels for cars,
trucks, and airplanes until 2009. Workers at X Wheels needed as much as four hours to set up the
automated equipment when they switched from one type of wheel to the other. Aiming to reduce the time
required for setting up the machine, X Wheels introduced a new machine in 2010, which could be set up
in one hour for the varying production needs. This step also reduced its operating costs by a significant
amount without limiting customer options. On the basis of the above scenario, it can be said that X
Wheels incorporated __________ to reduce their operating costs.

additive manufacturing
flexible manufacturing
service manufacturing
lean manufacturing

15. Martha was recently appointed as a senior operations manager in a leading multinational company.
However, she is not satisfied with the pay rate that the company is providing her. She thinks that the pay
is significantly less compared to industry standards. Martha’s perceived unfairness is because of the
difference in:

external equity.
procedural equity.
internal equity.
individual equity.

16. Mercel Inc., a garments manufacturing company, recruits Fredrick as a senior human resource
manager. As his first assignment, the company instructs him to take measures to portray the company as
being inclusive of minority groups. Fredrick recruits a few people from a minority group to some key
positions in the company and refrains from recruiting more people from that group. Which of the following
problems is evident in the company’s and Fredrick’s actions?

Tokenism
Ethnocentrism
Discrimination
Stereotyping

17. Managers at Widget Corp., a television manufacturer, are engaged in a planning exercise. During one
dummy activity, managers generated different future situations along with development of response
strategies. One of the assumption by them was, the demand for their 15 inch televisions will reduce by
30% in the next decade, and this demand will be replaced by tablet computers. Based on this
assumption, the managers developed a plan that included starting a manufacturing plant for tablets in the
next two years. It is evident that the managers at Widget Corp. were engaged in __________.

functional-level strategy
scenario planning
business-level planning
corporate-level strategy

18. Clara, a senior manager at MC Consultants, tells her subordinate, David, during the annual appraisal
process that his performance has been poor over the past few months. David argues that his
performance was up to the expected standards set by the company. In which of the following ways should
Clara deal with David’s claim?
She should compare David’s performance with the performance of other team members.
She should use objective work data to discuss his performance.
She should stress that his performance was poor because of his attitude.
She should force David to accept his rating and not argue further.

19. Meera works as a first line manager in an assembly plant. During an economic crisis, the company
instructs her to lay off assembly line workers with poor performance ratings. Keeping the workers’
interests in mind, Meera suggests that they be given additional training so that they become more
efficient at their work. She adds that this may improve the overall performance of the company. Which of
the following leadership styles does Meera display?

Servant leadership
Directive leadership
Transforming leadership
Spiritual leadership

20. Consider the following financial data of Eastlake Service Industries from the past year.
Gross income X
Total sales Y
Total annual credit sales Z
Net income W
Cost of goods sold V
Total assets T
Average inventory value L
Average account receivables K
Considering the data mentioned above, which of the following is the correct expression for the
receivables turnover ratio of Eastlake Service Industries?

V/L
Z/K
K/L
Y/T

21. Joshua has been working as a project manager in an information technology company for three
years. Martha is a delivery team lead in the same company. When the company receives a project that
has to be completed in a short span of time, Joshua decides to increase the daily work hours of the
delivery team to accommodate the project. Martha, however, insists that Joshua request the client for a
time extension. Not willing to reach an agreement, Joshua and Martha ignore each other’s opinions and
begin working on the project individually. Which of the following conflict-handling intentions does this
scenario portray?

Compromising
Accommodating
Avoiding
Collaborating

22. Jennifer is a manager in an upscale store selling perfumes for women. She is high on “initiating
structure” and low on “consideration.” Which of the following actions is she likely to engage in to influence
her subordinates?

She will instruct salespeople to cut down on their breaks to increase the store’s sales.
She will allow salespeople to take decisions about the ways they want to promote a product.
She will motivate salespeople by sharing business profits with them.
She will ensure that salespeople are allotted reasonable targets.
23. Mark Cavell is a senior manager in a technology firm. Two of his team members, Clara and
Rodriguez, are up for a promotion. Mark gives the promotion to Rodriguez. Which of the following criteria,
if considered by Mark for the promotion, would be viewed as illegally discriminatory?

Rodriguez’s educational qualification is more suitable to the new role than Clara’s qualification.
Rodriguez completes a given task quicker than Clara.
Rodriguez’s ability to perform under stressful situations is better than Clara.
Rodriguez, being a male, deserves the promotion more than Clara.

24. One receptionist posted an anonymous blog on the web that said, “I work in a five-star hotel, servicing
the rich and famous. That being said, the people who come to the reception are not worth servicing
sometimes. In fact, the guests can be idiots. I am often treated with no respect, and nobody listens to me
until I threaten to call the security and put them in their place.” Clearly, if a receptionist is in a bad mood, it
is going to influence her perceptions of guests, which will in turn influence her behavior. It is evident that
the receptionist exhibits __________.

ethical emotions
unethical emotions
positive affect
negative affect

25. Joshua is a project manager in an information technology company. The company receives a project
that has to be completed in a short span of time. Joshua decides to increase the daily work hours of the
delivery team to fast-track the project. However, Martha, the delivery team lead, does not want her team
to be put under pressure and insists that Joshua request the client for a deadline extension. Joshua
wants to please the client, so he is against Martha’s suggestion. Which of the following is an effective
strategy to resolve their differences without the need to compromise on each other’s stand?

Competition
Collaboration
Avoidance
Accommodation

Part 2 final exam STR 581

Click on this link for Answer Key

https://www.coursemerit.com/solution-details/41195/Part-2-final-exam-STR-581-

1. Internal reports that review the actual impact of decisions are prepared by:
• the controller
• department heads
• factory workers
• management accountants

2. Horizontal analysis is also known as:

• trend analysis
• vertical analysis
• linear analysis
• common size analysis

3. Which of the following is an advantage of corporations relative to partnerships and sole proprietorships?
• most common form of organization
• reduced legal liability for investors
• lower taxes
• harder to transfer ownership

4. Serox stock was selling for $20 two years ago. The stock sold for $25 one year ago, and it is currently selling for
$28. Serox pays a $1.10 dividend per year. What was the rate of return for owning Serox in the most recent year?
(Round to the nearest percent.)
• 32%
• 16%
• 12%
• 40%
5. External financing needed: Jockey Company has total assets worth $4,417,665. At year-end it will have net income
of $2,771,342 and pay out 60 percent as dividends. If the firm wants no external financing, what is the growth rate it
can support?
• 30.3%
• 27.3%
• 32.9%
• 25.1%

6. An unrealistic budget is more likely to result when it:

• has been developed by all levels of management.
• has been developed in a top down fashion.
• has been developed in a bottom up fashion.
• is developed with performance appraisal usages in mind.

7. Which of the following financial statements is concerned with the company at a point in time?
• balance sheet
• retained earnings statement
• statement of cash flows
• income statement

8. Next year Jenkins Traders will pay a dividend of $3.00. It expects to increase its dividend by $0.25 in each of the
following three years. If their required rate of return if 14 percent, what is the present value of their dividends over the
next four years?
• $12.50
• $11.63
• $9.72
• $13.50

9. An activity that has a direct cause-effect relationship with the resources consumed is a(n):
• product activity
• cost driver
• cost pool
• overhead rate

10. The major element in budgetary control is:

• the approval of the budget by the stockholders
• the valuation of inventories
• the preparation of long-term plans
• the comparison of actual results with planned objectives.
11. Tule Time Comics is considering a new show that will generate annual cash flows of $100,000 into the infinite
future. If the initial outlay for such a production is $1,500,000 and the appropriate discount rate is 6 percent for the
cash flows, then what is the profitability index for the project?
• 0.11
• 1.11
• 0.90
• 1.90
12. How firms estimate their cost of capital: The WACC for a firm is 13.00 percent. You know that the firm’s cost of
debt capital is 10 percent and the cost of equity capital is 20% What proportion of the firm is financed with debt?
• 70%
• 50%
• 33%
• 30%

13. The most important information needed to determine if companies can pay their current obligations is the:
• relationship between current assets and current liabilities
• relationship between short-term and long-term liabilities
• projected net income for next year
• net income for this year

14. Process costing is used when:

• dissimilar products are involved
• production is aimed at fulfilling a specific customer order.
• the production process is continuous.
• costs are to be assigned to specific jobs.

15. A cost which remains constant per unit at various levels of activity is a:
• fixed cost
• mixed cost
• manufacturing cost
• variable cost
16.The group of users of accounting information charged with achieving the goals of the business is its:
• investors
• auditors
• creditors
• managers

17. Teakap, Inc. has current assets of $1,456,312 and total assets of $4,812,369 for the year ending September 30,
2006. It also has current liabilities of $1,041,012, common equity of $1,500,000 and retained earnings of $1,468,347.
How much long-term debt does the firm have?
• $803,010
• $2,303,010
• $1,844,022
• $2,123,612

18. The cash conversion cycle?

• begins when the firm invests cash to purchase the raw materials that would be used to produce the goods
that the firm manufactures.
• estimates how long it takes on average for the firm to collect its outstanding accounts receivables
balance.
• begins when the firm uses its cash to purchase raw materials and ends when the firm collects cash
payments on its credit sales.
• shows how long the firm keeps its inventory before selling it.
19. Ajax Corp. is expecting the following cash flows - $79,000, $112,000, $164,000, $84,000, and $242,000 – over
the next five years. If the company’s opportunity cost is 15 percent, what is the present value of these cash flows?
(Round to the nearest dollar.)
• $480,906
• $429,560
• $414,322
• $477,235

20. Jack Robbins is saving for a new car. He needs to have $21,000 for the car in three years. How much will he
have to invest today in an account paying 8 percent annually to achieve his target? (Round to nearest dollar)
• $26,454
• $19,444
• $22,680
• $16,670

21. Which of the following presents a summary of changes in a firm’s balance sheet from the beginning of an
accounting period to the end of that accounting period?
• the statement of net worth
• the statement of cash flows
• the statement of working capital
• the statement of retained earnings

22. M&M Proposition 1: Dynamo Corp. produces annual cash flows of $150 and is expected to exist forever. The
company is currently financed with 75 percent equity and 25 percent debt. Your analysis tells you that the appropriate
discount rates are 10 percent for the cash flows, and 7 percent for the debt. You currently own 10 percent of the
stock.
If Dynamo wishes to change its capital structure from 75 percent equity to 60 percent equity and use the debt
proceeds to pay a special dividend to shareholders, how much debt should they use?
• $225
• $600
• $375
• $321

23. Horizontal analysis is a technique for evaluating a series of financial statement data over a period of time:
• that has been arranged from the highest number to the lowest number.
• to determine the amount and/or percentage increase or decrease that has taken place.
• to determine which items are in error.
• that has been arranged from the lowest number to the highest number.

24. Jayadev Athreya has started his first job. He will invest $5,000 at the end of each year for the next 45 years in a
fund that will earn a return of 10 percent. How much will Jayadev have at the end of 45 years?
• $2,667,904
• $5,233,442
• $1,745,600
• $3,594,524

25. Turnbull Corp. had an EBIT of $247 million in the last fiscal year. Its depreciation and amortization expenses
amounted to $84 million. The firm has 135 million shares outstanding and a share price of $12.80. A competing firm
that is very similar to Turnbull has an enterprise value/EBITDA multiple of 5.40.
What is the enterprise value of Turnbull Corp.? Round to the nearest million dollars.
• $1,344 million
• $453.6 million
• $1,315 million
• $1,787 million
26. Firms that achieve higher growth rates without seeking external financing:
• Have a low plowback ratio
• are highly leveraged
• have less equity and/or are able to generate high net income leading to a high ROE.
• None of these

27. In a process cost system, product costs are summarized:

• on job cost sheets.
• when the products are sold.
• after each unit is produced.
• on production cost reports.

28. The convention of consistency refers to consistent use of accounting principles:

• within industries
• among accounting periods
• throughout the accounting period
• among firms
29. If a company’s weighted average cost of capital is less than the required return on equity, then the firm:
• is financed with more than 50% debt
• is perceived to be safe
• partnership
• has debt in its capital structure

30. Your firm has an equity multiplier of 2.47. What is the debt-to-equity ratio?
• 0
• 1.74
• 0.60
• 1.47

31. The accumulation of accounting data on the basis of the individual manager who has the authority to make day-
to-day decisions about activities in an area is called:
• master budgeting
• static reporting
• responsibility accounting
• flexible accounting

32. Regatta, Inc., has six-year bonds outstanding that pay a 8.25 percent coupon rate. Investors buying the bond
today can expect to earn a yield to maturity of 6.875 percent. What should the company’s bonds be priced at today?
Assume annual coupon payments. (Round to the nearest dollar.)
• $1014
• $972
• $923
• $1,066

33. Variance reports are:

• internal reports for management
• SEC financial reports
• external financial reports
• all of these

34. The break-even point is where:

• contribution margin equals total fixed costs.
• total sales equal total variable costs.
• total sales equal total fixed costs.
• total variable costs equal total fixed costs.
35. When a company assigns the costs of direct materials, direct labor, and both variable and fixed manufacturing
overhead to products, that company is using:
• operations costing
• product costing
• absorption costing
• variable costing

36. Which of the following is considered a hybrid organizational form?

• sole proprietorship
• partnership
• limited liability partnership
• corporation

37. Gateway, Corp. has an inventory turnover of 5.6. What is the firm’s days’s sales in inventory?
• 57.9
• 61.7
• 65.2
• 64.3

38. The process of evaluating financial data that change under alternative courses of action is called:
• incremental analysis
• contribution margin analysis
• cost-benefit analysis
• double entry analysis

39. What decision criteria should managers use in selecting projects when there is not enough capital to invest in all
available positive NPV projects?
• the modified internal rate of return
• the profitability index
• the discounted payback
• the internal rate of return

STR 581/ CAPSTONE FINAL EXAM PART 3

SCORE: 29/30 (96.67%)\

Open this link for answer key

https://www.coursemerit.com/solution-details/41196/Part-3-final-exam-STR-581-SCORE-2930-96.67

1. Hilton Hotels customizes rooms and lobbies according to location. Northeastern hotels are
sleeker and more cosmopolitan. Southwestern hotels are more rustic. This is an example of ________
segmentation.
psychographic

geographic

behavioral

Demographic

2. The differentiation strategy can be effective in controlling the power of rivalry with existing
competitors in an industry because__________.

customers will seek out the lowest-cost product

the differentiation strategy benefits from rivalry because it forces the firm to innovate

customers of nondifferentiated products are sensitive to price increases

customers are loyal to brands that are differentiated in meaningful ways

3. Backward integration occurs when a company_________.

is concentrated in a single industry

owns its own source of distribution of outputs

is divesting unrelated businesses

produces its own inputs

4. Annual-plan control requires making sure the company isn't overspending to achieve sales goals.
The key ratio to watch is ___________.

gross margin

stock turnover

cash flow return on investment

marketing expense-to-sales

5. The first step in the social marketing planning process is ________.

selecting the target audience

setting objectives and goals

determining the focus of the program

designing the market offering

6. Many consumers are willing to pay $100 for a perfume that contains $10 worth of scent because
the perfume is from a well-known brand. What kind of pricing is the company depending on?

target pricing

market-skimming pricing

image pricing

going-rate pricing

7. The Enron employee who reported the financial manipulations at the company to her superiors
can be considered to have engaged in__________.

white-collar crime

managerial opportunism

vindictive disloyalty

an act of courage

8. AT&T's business campaign not only helped to change public perceptions of the company, it also
signaled to employees that AT&T was determined to be a leader in telecommunication services. Which
principle of internal branding does this example portray?

bringing the brand alive for employees

choosing the right moment to capture employees' attention and imagination

furnishing energizing and informative internal communication

linking internal and external marketing

9. Southwest Airlines offers a Rapid Rewards program that allows customers to count flights they
have taken toward free future flights. This is an example of a(n) ________.

value delivery system

activity-based costing program

club membership program

cross-selling program

10. A company that seeks to increase its sales and profits through backward, forward, or horizontal
integration within the industry is said to be employing a(n) ________ growth strategy.

diversification

intensive
integrative

Target

11. The typical risks of a cost leadership strategy include___________.

loss of customer loyalty

production and distribution processes becoming obsolete

the inability to balance high differentiation and low price

excessive differentiation to the point where the customer base is too small

12. The three parts of the external environment which affect a firm's strategic actions
are__________.

general, industry, and competitor

local, national, and global

economic, political, and legal

industry, business, and product

13. Moving into international markets is a particularly attractive strategy to firms whose domestic
markets__________.

are limited in opportunities for growth

have developed unfriendly business attitudes toward the industry

demand a differentiation strategy for success

have too much regulation

14. Aisha is a marketing manager with Injoos, a company that manufactures packaged fruit juices.
Knowing that several other companies exist in the market that offer similar products, Aisha decides to
build a customer base from among those who prefer to avoid mass media and other targeted
promotions. Which of the following marketing communications tools would be her best option to build a
favorable impression among the prospective customers?

public relations

personal selling

direct marketing

sales promotions

15. A group of college graduates decides to start a business. Though they are knowledgeable in
various business domains, they are unable to arrive at a valuable business idea. They decide to search
for ideas in a structured manner. They meet and start discussing everyone's ideas. Each idea is recorded
and then the thoughts that come up in relation to the ideas are written down and discussed. This
process helps them to finalize a business plan. What technique is used here?

attribute listing

mind mapping

forced relationship analysis

reverse assumption analysis

16. Successful implementation of the differentiation strategy requires a structure that___________.

is dominated by the operations function

focuses on the finance function

decentralizes decision making

has specialized jobs.

17. A well-known car manufacturing company introduces a new hatchback model by describing its
distinctive features and then stressing the speed and safety qualities of the car. Which of the following is
the company using to convey its membership in the hatchback segment?

relying on the product descriptor

comparing to exemplars

announcing category benefits

using channel differentiation

18. ________ is a form of online word of mouth, or "word of mouse," that encourages consumers to
pass along company-developed products and services or audio, video or written information to others
online.

Interstitial marketing

Guerrilla marketing

Viral marketing

Microsite marketing

19. The strategic management process is__________.

a decision-making activity concerned with a firm's internal resources, capabilities, and competencies,
independent of the conditions in its external environment

a set of activities that will assure a sustainable competitive advantage and above-average returns for the
firm
the full set of commitments, decisions, and actions required for the firm to achieve above-average
returns and strategic competitiveness

a process directed by top-management with input from other stakeholders that seeks to achieve above-
average returns for investors through effective use of the organization's resources

20. In general, compared with firms which compete in only one market, among firms which face one
another in multiple markets there is__________.

similar competitive rivalry

more competitive rivalry

no competitive rivalry

less competitive rivalry

21. The proper matching of what a firm can do with what a firm might do__________.

yields insights the firm requires to select its strategy

overcomes the rigidity and inertia resulting from a history of success

balances the internal characteristics of the firm with the characteristics of the external environment

develops core competencies based on human knowledge

22. Viewing the world through the customer's eyes and constantly seeking ways to create more
value for the company enhances__________.

the reach of the company toward the customer

affiliation with the customer

the ability to identify the customer

the richness of the relationship with the customer

23. Which of the following can a company do to reduce defection

Distinguish the causes of customer attrition and identify those that can be managed better.

Enhance the growth potential of existing customers through cross-selling and upselling.

Attract new customers to try out the company's products.

Increase customer lifetime value by increasing the non-monetary costs of products.

24. A(n) ________ market share of exactly 100 percent means that a company is tied for the market
lead. A rise in relative market share means the company is gaining on its leading competitor.

relative
overall

potential

served

25. Gordon Jones is considering purchasing a computer from Best Buy. He has created a scale for
rating eight different computers on three different characteristics. He plans to make a short list of only
those computers that score at least a 7 on his scale on all three characteristics. Which of the following
choice heuristics has he chosen?

lexicographic heuristic

conjunctive heuristic

elimination-by-aspects heuristic

anchoring and adjustment heuristic

26. The goal of the organization's ________ is to point the firm in the direction of where it would
like to be in the years to come.

culture

mission
vision

Strategy

27. The term "conglomerates" refers to firms using the diversification strategy.

related linked

unrelated

global

related constrained

28. The likelihood of entry of new competitors is affected by and ___________.

the profitability of the industry; the market share of its leading firm

barriers to entry; expected retaliation of current industry organizations

the power of existing suppliers; buyers

the demand for the product; the profitability of the competitors

29. The recent joint ventures formed by BP with Russian and Indian partners showed the
importance of the ________ segment of the general environment that BP and other integrated oil firms
have to manage when contending with scarce resources.

global

demographic

political/legal

Physical

30. Organizational structure__________.

specifies the firm's formal reporting relationships, procedures, controls, and authority and decision-
making processes

specifies the firm's informal reporting relationships, procedures, controls, and authority and decision-
making processes

specifies the firm's control mechanisms, grievance procedures, reporting relationships, procedures, and
authority over decision-making processes

specifies the firm's formal value proposition, the markets it will serve, and how the firm will provide
value in those markets