MGT603 Solved Quizs

71. Of the following, which one is FALSE regarding a functional

organizational structure?

► The tasks, people, and technologies necessary to do the work of the business

are grouped together

► Functional structures predominate in firms with single or narrow product

lines

► Marketing, operations, and finance would be considered groups found within

this type of structure

► Functional structure is designed to achieve flexibility and better

communication

Ref: Functional structure is sometimes characterized by low employee morale,

line/staff conflicts, poor delegation of authority, and inadequate planning for

products and markets. (Page no.118)

Functional Structure

The organization is structured according to functional areas instead of product

lines. This structure is best used when creating specific, uniform products. They

are economically efficient, but lack flexibility. Communication between

functional areas can be difficult.

72. Which of these is not one of the tests used to determine whether a

performance-pay plan will benefit an organization?

► Do employees understand the plan?

► Is the plan improving communications?

► Does the plan pay out when it should?

► Does the plan reduce management layers?

73. All of the following are the managerial issues for managing natural

environment EXCEPT:

► Global warming- depletion of rain forests

► Employee understanding about environment

► Developing biodegradable products and packages

► Waste management to clean air and water

Special natural environmental issues include ozone depletion, global warming,

depletion of rain forests, destruction of animal habitats, protecting endangered

species, developing biodegradable products and packages, waste management,

clean air, clean water, erosion, destruction of natural resources, and pollution

control.

74. The methods which are used to match managers with strategies to be

implemented include all of the following EXCEPT:

► Transferring managers

► Job enlargement

► Managers’ retention

► Job enrichment

75. Which one of the following is an example of product decisions?

► Brand name

► Volume discounts

► Distribution channels

► Order processing

Ref: Product Decisions

The term "product" refers to tangible, physical products as well as services. Here

are some examples of the product decisions to be made:

• Brand name

• Functionality

• Styling

• Quality

• Safety

• Packaging

76. Which variable would be considered as a part of pricing decisions?

► Warranty

► Bundling

► Safety

► Functionality

Price Decisions

Some examples of pricing decisions to be made include:

• Pricing strategy (skim, penetration, etc.)

• Suggested retail price

• Volume discounts and wholesale pricing

• Cash and early payment discounts

• Seasonal pricing

• Bundling

• Price flexibility

• Price discrimination

77. Which one of the following is an example of place decisions?

► Safety and packaging

► Personal selling

► Public relations & publicity

► Order processing

Distribution (Place) Decisions

Distribution is about getting the products to the customer. Some examples of

distribution decisions include:

• Distribution channels

• Market coverage (inclusive, selective, or exclusive distribution)

• Specific channel members

• Inventory management

• Warehousing

• Distribution centers

• Order processing

• Transportation

• Reverse logistics

78. All of the following are the examples of promotion decision EXCEPT:

► Personal selling

► Volume discounts

► Public relations

► Advertising

Promotion Decisions

In the context of the marketing mix, promotion represents the various aspects of

marketing communication, that is, the communication of information about the

product with the goal of generating a positive customer response. Marketing

communication decisions include:

• Promotional strategy (push, pull, etc.)

• Advertising

• Personal selling & sales force

• Sales promotions

• Public relations & publicity

• Marketing communications budget

79. Which of the following is NOT a decision that may require

finance/accounting policies?

► To extend the time of accounts receivable

► To determine an appropriate dividend payout ratio

► To use LIFO, FIFO or a market-value accounting approach

► To determine the amount of product diversification

Some examples of decisions that may require finance/accounting policies are:

1. To raise the amount of capital by issuing shares or obtaining a debt from

external parties.

2. To enhance the inventory turn over level

3. To make or buy fixed assets.

4. To extend the time of accounts receivable.

5. To establish a certain percentage discount on accounts within a specified

period of time.

6. To determine the amount of cash that should be kept on hand

7. To determine an appropriate dividend payout ratio.

8. To use LIFO, FIFO

80. At least how many R & D approaches are used for the implementation of

strategy?

► Two

► Three

► Four

► Five

Ref: There are at least three major R&D approaches for implementing strategies.

1. First firm to market new technological products

2. Be an innovative imitator of successful products

3. Low-cost producer of similar but less expensive products

81. While evaluating a strategy, corrective actions are almost always

needed except:

► When external and internal factors have not significantly changed

► When the firm is not progressing satisfactorily toward objectives

► When the firm has not achieved the stated organizational goals

► When there are differences between desired results and achieved results

Notice that corrective actions are almost always needed except when (1) external

and internal factors have not significantly changed and (2) The firm is

progressing satisfactorily toward achieving stated objectives.

82. Which one of the following statements best describes the activity

‘marketing and sales’ of Porter’s supply chain model?

► Machining, packaging, assembly, equipment maintenance & testing

► Activities linked with getting buyers to purchase the product

► Activities that maintain and enhance the product's value

► receiving, storing, inventory control & transportation planning

The activities of the Value Chain

• Primary activities (line functions)

Inbound Logistics Includes receiving, storing, inventory control, transportation

planning.

Operations Includes machining, packaging, assembly, equipment maintenance,

testing and all other value-creating activities that transform the inputs into the

final product

Outbound Logistics The activities required to get the finished product at the

customers: warehousing, order fulfillment, transportation, distribution

management.

Marketing and Sales The activities associated with getting buyers to purchase

the product, including: channel selection, advertising, promotion, selling,

pricing, retail management, etc.

Service The activities that maintain and enhance the product's value, including:

customer support, repair services, installation, training, spare parts management,

upgrading, etc.

83. Outbound logistics includes which one of the following?

► Receiving, storing, inventory control, transportation planning

► Machining, packaging, assembly, equipment maintenance, testing

► Activities required to get the finished product at the customers

► Activities that maintain and enhance the product's value

Ref: Outbound Logistics. The activities required to get the finished product at

the customers: warehousing, order fulfillment, transportation, distribution

management.

84. Which of the following is NOT a key financial ratio?

► Earnings per share

► Production growth

► Asset growth

► Profit margin

Some key financial ratios that are particularly useful as criteria for strategy

evaluation are as follows:

1. Return on investment

2. Return on equity

3. Profit margin

4. Market share

5. Debt to equity

6. Earnings per share

7. Sales growth

8. Asset growth

85. Which of the following statement is TRUE about ‘Controls’ which are used

in strategy evaluation stage?

► They are strategy-oriented

► They are action-oriented

► They are control-oriented

► They are information-oriented

Ref: Controls need to be action-oriented rather than information-oriented.(Page

no.154)

86. In BCG matrix, the size of circle corresponding to a division represents

what?

► Relative market share of that division

► Financial strength of that division

► Revenue generated by that division

► Relative market growth of that division

Ref: Practical Use of the Boston Matrix

For each product or service the 'area' of the circle represents the value of its sales.

(Page No.104)

87. If the capital and human resources of a firm are necessary to manage

expanded operations and it also has excess production capacity, which would

be an effective strategy for the firm to pursue?

► Market Penetration

► Market Development

► Divestiture

► Retrenchment

Guidelines for Market Development

1-Six guidelines when market development may be an especially effective

strategy are:

2-New channels of distribution that are reliable, inexpensive, and good quality

3-Firm is very successful at what it does

4-Untapped or unsaturated markets

5-Capital and human resources necessary to manage expanded operations

6-Excess production capacity

7-Basic industry rapidly becoming global

88. If the firm is very successful at what it does, unsaturated markets are

available and the new inexpensive channels of distribution are also available,

then which of the following strategies a company should follow?

► Market Penetration

► Market Development

► Product Development

► Retrenchment

Six guidelines when market development may be an especially effective strategy

are:

ı New channels of distribution that are reliable, inexpensive, and good quality

ı Firm is very successful at what it does

ı Untapped or unsaturated markets

ı Capital and human resources necessary to manage expanded operations

ı Excess production capacity

ı Basic industry rapidly becoming global

89. Which strategies are defensive tactics directed at reducing internal

weaknesses and avoiding environmental threats?

► SO

► WO

► SW

► WT

Ref: WT Strategies

Every firm has a desire to overcome its weakness and reducing threats. This

type of strategy helpful when weaknesses are removed to overcome external

threats

90. Which of these is TRUE about strategy implementation?

► It refers to positioning forces before the action

► It focuses on effectiveness

► It is primarily an operational process

► It is primarily an intellectual process

Strategy formulation is positioning forces before the action.

Strategy implementation is managing forces during the action.

Strategy formulation focuses on effectiveness.

Strategy implementation focuses on efficiency.

Strategy formulation is primarily an intellectual process.

Strategy implementation is primarily an operational process.

Strategy formulation requires good intuitive and analytical skills.

Strategy implementation requires special motivation and leadership skills.

Strategy formulation requires coordination among a few individuals.

Strategy implementation requires coordination among many persons