Question 1

The view that equity holders only receive payment on their investment in a firm after all legitimate claims by a firm's other stakeholders are satisfied is known as the ________ view of equity holders.

Accepted Answer

A)  stakeholder 
B)  residual claimants 
C)  legitimate claimants 
D)  extraordinary claims

Question 2

A competitive advantage that lasts a very short period of time is known as a ________ competitive advantage.

Accepted Answer

A)  temporary 
B)  sustained 
C)  transient 
D)  perpetual

Question 3

In many ways, the difference between traditional economics research and strategic management research is that the former attempts to explain why ________, while the latter attempts to explain ________.

Accepted Answer

A)  competitive advantages should not persist; when they can 
B)  competitive advantages should persist; when they can 
C)  competitive advantages should persist; why they should not 
D)  competitive parity should not persist; why they should

Question 4

A firm that earns below average accounting performance generally experiences a competitive disadvantage.

Accepted Answer

A) True 
 B)False

Question 5

From 1926 to 1995, visionary firms earned ________ returns compared to firms that were not visionary firms.

Accepted Answer

A)  substantially lower 
B)  substantially higher 
C)  marginally lower 
D)  equivalent

Question 6

Which ratio signals a greater risk of bankruptcy as it increases?

Accepted Answer

A)  debt to equity 
B)  quick ratio 
C)  debt to assets 
D)  cash flow per share

Question 7

Firms that generate less economic value than their rivals experience a competitive

Accepted Answer

A)  advantage. 
B)  parity. 
C)  disadvantage. 
D)  perceived benefit.

Question 8

Green Frog is an environmentally friendly firm in the cosmetics industry that has decided to undertake a strategic planning project. It wants to ensure that it performs the process correctly and so intends to start the process with the first step of the strategic planning process, which is

Accepted Answer

A)  defining its mission. 
B)  setting objectives. 
C)  measuring performance. 
D)  defining its business level strategy.

Question 9

A "good strategy" does not necessarily have to create a competitive advantage.

Accepted Answer

A) True 
 B)False

Question 10

Using ratio analysis, a firm earns ________ when its performance is greater than the industry average.

Accepted Answer

A)  above average economic performance 
B)  below average accounting performance 
C)  above average accounting performance 
D)  below average economic performance

Question 11

Mission statements often contain so many common elements that even if a firm's mission statement does not influence behavior throughout an organization, it is likely to have a significant impact on a firm's actions.

Accepted Answer

A) True 
 B)False

Question 12

________ are ratios with some measure of profit in the numerator and some measure of firms' size or assets in the denominator.

Accepted Answer

A)  Liquidity ratios 
B)  Leverage ratios 
C)  Activity ratios 
D)  Profitability ratios

Question 13

Thermacorp's 17.3% ROE is an example of a(n) ________ ratio.

Accepted Answer

A)  liquidity 
B)  profitability 
C)  activity 
D)  leverage

Question 14

By conducting a(n) ________, a firm identifies the critical threats and opportunities in its competitive environment.

Accepted Answer

A)  internal analysis 
B)  competitive analysis 
C)  external analysis 
D)  strategic choice

Question 15

Accounts receivable turnover is an example of which type of ratio?

Accepted Answer

A)  profitability 
B)  activity 
C)  liquidity 
D)  leverage

Question 16

Define the term "mission" and discuss how a firm's mission can both positively and negatively impact a firm's performance.

Accepted Answer

The answer of Define the term "mission" and discuss how...

Question 17

The ultimate objective of the strategic management process is to enable a firm to choose and implement a strategy that leads to a competitive advantage.

Accepted Answer

A) True 
 B)False

Question 18

Describe the difference between emergent and intended strategies. Why might firms employ an emergent strategy?

Accepted Answer

The answer of Describe the difference between emergent and intended...

Question 19

High quality objectives are those that are

Accepted Answer

A)  tightly connected to elements of a firm's mission and are relatively easy to measure and track over time. 
B)  difficult to measure and track over time. 
C)  non-existent. 
D)  not quantitative.

Question 20

Which type of ratios focus on the ability of a firm to meet its short-term financial obligations?

Accepted Answer

A)  activity ratios 
B)  liquidity ratios 
C)  leverage ratios 
D)  profitability ratios

Exam 1: What Is Strategy and the Strategic Management Process

The view that equity holders only receive payment on their investment in a firm after all legitimate claims by a firm's other stakeholders are satisfied is known as the ________ view of equity holders.

A competitive advantage that lasts a very short period of time is known as a ________ competitive advantage.

In many ways, the difference between traditional economics research and strategic management research is that the former attempts to explain why , while the latter attempts to explain .

A firm that earns below average accounting performance generally experiences a competitive disadvantage.

From 1926 to 1995, visionary firms earned ________ returns compared to firms that were not visionary firms.

Which ratio signals a greater risk of bankruptcy as it increases?

Firms that generate less economic value than their rivals experience a competitive

Green Frog is an environmentally friendly firm in the cosmetics industry that has decided to undertake a strategic planning project. It wants to ensure that it performs the process correctly and so intends to start the process with the first step of the strategic planning process, which is

A "good strategy" does not necessarily have to create a competitive advantage.

Using ratio analysis, a firm earns ________ when its performance is greater than the industry average.

Mission statements often contain so many common elements that even if a firm's mission statement does not influence behavior throughout an organization, it is likely to have a significant impact on a firm's actions.

________ are ratios with some measure of profit in the numerator and some measure of firms' size or assets in the denominator.

Thermacorp's 17.3% ROE is an example of a(n) ________ ratio.

By conducting a(n) ________, a firm identifies the critical threats and opportunities in its competitive environment.

Accounts receivable turnover is an example of which type of ratio?

Define the term "mission" and discuss how a firm's mission can both positively and negatively impact a firm's performance.

The ultimate objective of the strategic management process is to enable a firm to choose and implement a strategy that leads to a competitive advantage.

Describe the difference between emergent and intended strategies. Why might firms employ an emergent strategy?

High quality objectives are those that are

Which type of ratios focus on the ability of a firm to meet its short-term financial obligations?