Strategic Management
Exam Answer Key
Course Introduction
Strategic Management is a comprehensive course designed to equip students with the analytical tools and conceptual frameworks necessary to formulate, implement, and evaluate effective business strategies. It examines the key initiatives taken by managers on behalf of owners, involving resource allocation, competition analysis, and the alignment of organizational objectives with the external environment. Through case studies and practical applications, students will explore topics such as competitive advantage, industry structure, business models, corporate governance, and strategic leadership, preparing them to make informed decisions that drive long-term organizational success.
Recommended Textbook
Entrepreneurship 9th Edition by Robert
D Hisrich
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15 Chapters
1225 Verified Questions
1225 Flashcards
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Page 2
Chapter 1: Entrepreneurship and the Entrepreneurial
Mind-Set
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49 Verified Questions
49 Flashcards
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Sample Questions
Q1) Entrepreneurs have stronger intentions to act when taking action is perceived to be impossible and risky.
A)True
B)False
Answer: False
Q2) Within the moral-support network,most entrepreneurs indicate that their _____ are their biggest supporters.
A)mentors
B)friends
C)parents
D)spouses
Answer: D
Q3) Which group in a professional network helps keep a new venture competitive?
A)Clients or buyers
B)Mentors
C)Trade associations
D)Suppliers
Answer: C
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Chapter 2: Entrepreneurial Intentions and Corporate
Entrepreneurship
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Sample Questions
Q1) It is important for an entrepreneur to understand all aspects of the environment.Part of this ability is reflected in the individual's level of creativity,which generally increases with age and education in most individuals.
A)True
B)False
Answer: False
Q2) When would an entrepreneur be pronounced to have recovered from the grief of a lost business?
A)On the availability of equally challenging entrepreneurial opportunities.
B)Upon a simultaneous engagement in an analysis of the failed business.
C)On having evaluated and absorbed the lessons learnt from the failed business.
D)Thoughts about the events surrounding,and leading up to the loss of the business,no longer generate a negative emotional response.
Answer: D
Q3) Entrepreneurially managed firm structure is usually flat with multiple informal networks.
A)True
B)False
Answer: True
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Chapter 3: Entrepreneurial Strategy: Generating and Exploiting New Entries
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Sample Questions
Q1) The period of time when the environment is favorable for entrepreneurs to exploit a particular new entry is called the window of opportunity.
A)True
B)False
Answer: True
Q2) Imitation of other products increases the downside loss associated with new entry.
A)True
B)False
Answer: False
Q3) A narrow-scope market strategy:
A)does not provide the entrepreneur an opportunity to build up specialized knowledge and expertise.
B)provides substantial protection against competitors.
C)is like putting all your eggs in one basket.
D)can be thought of as taking a "portfolio" approach to dealing with uncertainties.
Answer: D
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Chapter 4: Creativity and the Business Idea
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Sample Questions
Q1) The entrepreneur should always design and build his own webpage to maintain strategic control.
A)True
B)False
Q2) In the checklist method,a new idea is developed through a list of related issues or suggestions.
A)True
B)False
Q3) _____ is not desirable when brainstorming is in process.
A)"Freewheeling"
B)Idea combination and improvement
C)Generating a large quantity of ideas
D)Criticism
Q4) Trends for the next decade include all of the following except:
A)Green products
B)New age music
C)Clean energy
D)Health Maintenance
Q5) Give 5 examples of questions that could be asked using the checklist method.
Page 6
Q6) List,in order,the stages of the product planning and development process.
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Chapter 5: Identifying and Analyzing Domestic and International Opportunities
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Sample Questions
Q1) A nonequity arrangement is a method by which an entrepreneur can enter a market and obtain sales and profits without direct equity investment in the foreign market.
A)True
B)False
Q2) Primary data is:
A)data that has been collected by the private sector.
B)data collected by the government.
C)original information collected by the entrepreneur.
D)data that is hard to finD.
Q3) An opportunity assessment plan:
A)is the same thing as a business plan.
B)is longer than a business plan.
C)has a lot of computer-based spreadsheets.
D)focuses on the opportunity,not the venture.
Q4) Profits and tax benefits are common motivations for going global.
A)True B)False
Q5) Explain what the differences are between a business plan and an opportunity assessment plan.
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Chapter 6: Intellectual Property and Other Legal Issues for the Entrepreneur
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Sample Questions
Q1) A trademark is given a 50-year registration with no renewal.
A)True
B)False
Q2) A trademark is a distinguishing word,name,or symbol used to identify a product.
A)True
B)False
Q3) Trade secrets can be protected for:
A)an unlimited period of time.
B)20 years according to federal law.
C)14 years according to state law.
D)50 years if renewed to the maximum allowed,five 10 year renewable terms.
Q4) Explain what makes a contract legally enforceable
Q5) Identify and describe the three different types of patents.
Q6) To file for trademark protection only intent to use is necessary.
A)True
B)False
Q7) Licensing agreements generate revenue while minimizing risk and start-up investment costs.
A)True
B)False Page 8
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Page 9
Chapter 7: The Business Plan: Creating and Starting the Venture
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89 Verified Questions
89 Flashcards
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Sample Questions
Q1) Which of the following is not true about the operations plan portion of the business plan?
A)Only service businesses need an operations plan.
B)An operations plan describes the flow of goods and services from production to customer.
C)The role of technology in the business transaction process is discussed.
D)The shipping process and inventory control process can be discussed in this section.
Q2) If a venture is not a manufacturing firm,an operations plan is not necessary.
A)True
B)False
Q3) If the new venture is not a manufacturing operation,but a retail store or service,a new section of the business plan is required which is called the:
A)organizational plan.
B)operational plan.
C)production plan.
D)executive summary.
Q4) List three sources of Financial and Industry Operating Ratios from the text.
Q5) Draw the Upside-Down Pyramid Approach to Gathering Market Information.
Page 10
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Chapter 8: The Marketing Plan
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Sample Questions
Q1) A focus group should consist of:
A)6-8 potential customers
B)10-12 potential customers
C)14-16 potential customers
D)18-20 potential customers
Q2) Management needs to look at the marketing plan as a guide for implementing marketing decision making and not as a generalized,superficial document.
A)True
B)False
Q3) Telephone surveys have the poorest response rate.
A)True
B)False
Q4) Information that already exists is called:
A)secondary datA.
B)primary data.
C)marketing data.
D)target data.
Q5) Focus groups typically consist of 10-12 potential customers.
A)True
B)False
11
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Chapter 9: The Organizational Plan
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Sample Questions
Q1) The limited liability company is the only form of organization that allows members to share liability.
A)True
B)False
Q2) The difference between a board of directors and a board of advisors is that:
A)the board of advisors meets less frequently.
B)the board of directors lacks voting authority.
C)the board of directors is subject to less pressure of litigation.
D)the board of advisors are compensateD.
Q3) Which of the following statements is (are)true?
A)Corporations are not able to take deductions and expenses available to the proprietorship or partnership.
B)Distribution of dividends is taxed once,as income of the corporation.
C)Bonuses,incentives,and profit sharing are allowable ways to distribute income of the corporation.
D)Corporate tax may be higher than the individual rate.
Q4) The S corporation cannot have more than 75 shareholders.
A)True
B)False
Q5) Discuss the main advantages of an LLC over an S-Corp.
Page 12
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Chapter 10: The Financial Plan
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Sample Questions
Q1) ______ is the volume of sales needed to cover total variable and fixed costs.
A)Cash flow
B)Depreciation
C)Revenue
D)Breakeven
Q2) Large positive cash flows usually occur in the first months of a new venture.
A)True
B)False
Q3) What is a pro forma sources and applications of funds statement? Give examples of sources and used of funds.
Q4) In projecting the operating expenses for the second and third year,it is helpful to first look at those expenses that will likely change over time.
A)True
B)False
Q5) Profit from the business will be included on the balance sheet in the assets section. A)True
B)False
Q6) Define the contribution margin and its importance.
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Chapter 11: Sources of Capital
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Sample Questions
Q1) What type of cash flow financing loan can make funds available for up to 10 years?
A)Character loans
B)Real estate loans
C)Long-term loans
D)Installment loans
Q2) ________ financing does not require any collateral.
A)Commercial bank loan
B)Line of credit
C)Equity
D)Character loan
Q3) The SBA's Microloan program provides short-term loans of up to $100,000 to small businesses for working capital or purchase of inventory.
A)True
B)False
Q4) All owners,regardless of percentage of ownership,are required to personally guarantee SBA loans.
A)True
B)False
Q5) Explain the three major components of an R&D partnership.
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Chapter 12: Informal Risk Capital, venture Capital, and Going Public
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Sample Questions
Q1) The due diligence phase of the venture-capital process includes:
A)outlining the principle terms.
B)a detailed review of the company's history.
C)preparation of an investment memorandum.
D)a preliminary study of the business plan.
Q2) If there is a significant disparity between the offering price of the shares and the price paid for shares by officers,directors,or founding stockholders,a dilution section is necessary in the prospectus.
A)True
B)False
Q3) Which factor in valuing your company is the most important?
A)Future earnings capacity
B)Book value
C)Outlook of the economy
D)Market price of similar companies' stocks
Q4) Business angels are members of a professionally managed group of wealthy individuals who efficiently distribute risk capital.
A)True
B)False
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Chapter 13: Strategies for Growth and Managing the Implication of Growth
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Sample Questions
Q1) The principle of prioritized planning requires the entrepreneur to categorize his or her tasks by their degree of importance and then to allocate time to tasks based on this categorization.
A)True
B)False
Q2) Entrepreneurs who possess both the necessary abilities to make the transition to a more professional management approach and the aspiration to grow their businesses are the most likely to achieve firm growth.
A)True
B)False
Q3) Even if there is a belief that the pursuit of growth will improve firm performance and enhance personal wealth,some entrepreneurs will still avoid growing their business.
A)True
B)False
Q4) A product development strategy relies on taking market share from competitors.
A)True
B)False
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Chapter 14: Accessing Resources for Growth From External Sources
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Sample Questions
Q1) Often,when a business changes hands,key employees move into the acquiring company.
A)True
B)False
Q2) An acquisition is the purchase of a company,or part of a company,in which the acquired company ceases to exist independently.
A)True
B)False
Q3) Negotiating parties will often focus on the distribution task and ignore the integration task.
A)True
B)False
Q4) One method of expanding a business is the purchase of an entire company or part of it so that the entity is completely absorbed and no longer exists as a separate company.This is called:
A)a joint venture.
B)an acquisition.
C)a subsidiary.
D)take over.
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Chapter 15: Succession Planning and Strategies for
Harvesting and Ending the Venture
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Sample Questions
Q1) Which of the following is not a purpose of the Bankruptcy Act of 1978?
A)ensure a fair distribution of assets to creditors.
B)protect debtors from unfair depletion of assets.
C)protect debtors from unfair demands by creditors.
D)protect creditors from undue delay of money.
Q2) Which of the following is not an important part of a succession plan?
A)estimate the firm's value
B)evaluate potential successors based on how similar they are to you
C)provide a transition period so the successor can learn the business
D)set a date for completion of the transition and stick to it
Q3) Currently ESOPs account for ____ of the private sector workforce.
A)5%
B)10%
C)15%
D)20%
Q4) Which of the following is not an exit strategy?
A)an IPO
B)a private sale of stock
C)liquidation
D)franchising
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