MGT603 Final Term Past Paper 8 by Adnan Awan

MGT603- Strategic Management · Final term examination · Spring 2010 · BY ADNAN AWAN · Time: 90 min Marks: 69

Q1. Concentric Diversification involves heading towards which of the following? (1 marks)

1. Adding new, but related, products or services P 80
2. Adding new, unrelated products or services
3. Regrouping through cost and asset reduction
4. Adding unrelated products or services for new customers

Correct answer: Adding new, but related, products or services P 80

Q1. Which of the following is often considered the first step in strategic planning? (1 marks)

1. Devising a mission statement
2. Developing a vision statement
3. Setting annual objectives
4. Formulating set of strategies

Correct answer: Developing a vision statement

First step in strategic planning

Developing a vision statement is often considered the first step in strategic planning

Q3. Which of the following can be considered as a factor of internal strengths and weaknesses of an organization? (1 marks)

1. Technological changes
2. Production/operations
3. Demographics
4. Competitive trends

Correct answer: Production/operations

Q4. Long -term objectives includes all of the following EXCEPT: (1 marks)

1. Measurable
2. Reasonable
3. Varying
4. Consistent

Correct answer: Varying

The Nature of Long-Term Objectives:

Objectives should be quantitative, measurable, realistic, understandable, challenging, hierarchical, obtainable, and congruent among organizational units..

Q5. All of the following statements are true about a firm’s mission statement EXCEPT: (1 marks)

1. A mission statement directly contributes positively to financial performance
2. A mission statement does not directly contribute positively to financial performance
3. A mission statement should not provide useful criteria for selecting among alternative strategies
4. Primary reason to develop a mission statement is not to attract the customers

Correct answer: A mission statement should not provide useful criteria for selecting among alternative strategies

Q6. According to ‘Peter Drucker’, what is the prime task of strategic management? (1 marks)

1. To develop the vision of the business
2. Effectively evaluate the strategies
3. To think through the overall mission of a business
4. Develop alternative set of strategies

Correct answer: To think through the overall mission of a business

Q7. “A complex set of basic underlying assumptions and deeply held beliefs shared by all members of the group and drive in important ways the behavior of individuals in the organizational context” is known as: (1 marks)

1. Internal audit
2. Organizational culture
3. Internal assessment
4. Organizational strategy

Correct answer: Organizational culture

Q8. Which of these is the allocation and reallocation of capital and resources to projects, products, assets and divisions of an organization? (1 marks)

1. Investment decision
2. Financing decisions
3. Restructuring decisions
4. Strategic decision

Correct answer: Investment decision

Investment decision

The investment decision, also called capital budgeting, is the allocation and reallocation of capital and resources to projects, products, assets, and divisions of an organization.

Q9. Amir, a sole proprietor, uses the information system to ask the question; “What if the prices will decrease by 16% in the next year?” Which of the following functions the information system is performing for Amir? (1 marks)

1. Functional support role
2. Decisional support role P 73
3. Managerial support role
4. Analytical supporting role

Correct answer: Decisional support role P 73

Q10. Which of the following is sometimes referred as “the mystery approach to decision making, when subordinates are left to figure out what is happening and why”? (1 marks)

1. Managing by hope
2. Managing by extrapolation
3. Managing by crisis
4. Managing by subjectives P79

Correct answer: Managing by subjectives P79

Q11. The purpose of an external audit is to prepare a list of which of the following? (1 marks)

1. Opportunities and weaknesses
2. Threats and strengths
3. Opportunities and threats
4. Strengths and weaknesses

Correct answer: Opportunities and threats

Q12. Defensive strategies include all of the following EXCEPT: (1 marks)

1. Retrenchment
2. Acquisition
3. Divestiture
4. Liquidation

Correct answer: Acquisition

Q13. Smoothies Tire & Rubber Co. is selling its North American tire business to Avinza International, is an example of which type of strategy? (1 marks)

1. Related diversification
2. Retrenchment
3. Divestiture
4. Liquidation

Correct answer: Divestiture

THE Selling a division or part of an organization is called divestiture. Divestiture often is used to raise capital for further strategic acquisitions or investments. Divestiture can be part of an overall retrenchment strategy to rid an organization of businesses that are unprofitable, that require too much capita