chapter03 - CHAPTER 3 The External Assessment True/False...

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CHAPTER 3 The External Assessment True/False Introduction 1. Industry analysis is also referred to as external strategic management audit. Ans: T Page: 80 2. An external audit focuses on identifying and evaluating trends and events within the control of management. Ans: F Page: 80 The Nature of an External Audit 3. To develop an exhaustive list of every possible factor that could influence the business is the aim of external audit. Ans: F Page: 80 4. Identifying and evaluating external opportunities and threats enables organizations to develop a clear mission, to design strategies to achieve long-term objectives and to develop policies to achieve annual objectives. Ans: T Page: 80 5. Five major categories of external variables are: (1) economic forces, (2) social and cultural forces, (3) political, governmental and legal forces, (4) technological forces and (5) demographic forces. Ans: F Page: 80 6. The output of an external strategic-management audit is a finite set of the most important opportunities and strengths on which the future of a business should be built. Ans: F Page: 80 253
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7. As many managers and employees as possible must be involved in the process of performing an external audit. Ans: T Page: 80 8. Given the broad knowledge and expertise at the top management level, the process of performing an external audit should remain at and involve primarily the top management. Ans: F Page: 80 9. Five basic steps for conducting an external audit are: (1) select key environmental variables, (2) select key sources of external information, (3) use forecasting tools and techniques, (4) construct a Competitive Profile Matrix and (5) construct an External Review Matrix. Ans: F Page: 80-81 10. An external audit can be described as collecting and evaluating social, cultural, demographic, environmental, political, governmental, economic, technological and competitive information that may represent key opportunities and threats to an organization. Ans: T Page: 81 11. Assigning each source of information to a team of individuals and then requiring periodic scanning reports from those individuals is one approach to environmental scanning that has proved successful. Ans: T Page: 81 12. To perform an external audit, a company first must gather competitive intelligence and information about social, cultural, demographic, environmental, economic, political, legal, governmental and technological trends. Ans: T Page: 81 13. Freund argues that key external factors must not be hierarchical. Ans: F Page: 82 Economic Forces 14. An economic trend in America is increasing numbers of two-income households. Ans: T Page: 82 254
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15. The value of the dollar on the world market is an example of a demographic variable. Ans: F
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chapter03 - CHAPTER 3 The External Assessment True/False...

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