chapter05 - CHAPTER 5 Strategies in Action True/False...

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CHAPTER 5 Strategies in Action True/False Long-Term Objectives 1. Long-term objectives represent the results expected from pursuing certain strategies. Ans: T Page: 158 2. The only objectives that need to be associated with a time line are short-term objectives. Ans: F Page: 158 3. Objectives provide direction and allow for organizational synergy. Ans: T Page: 159 4. “If it ain’t broke, don’t fix it” refers to managing by crisis. Ans: F Page: 159 5. Management by subjectives suggest managers should do the best they can to accomplish what they think should be done. Ans: T Page: 159 6. Managing by crisis is highly supported by research as the effective substitute for managing by objectives, given that the true measure of a good strategist is the ability to solve problems. Ans: F Page: 159 7. Many organizations pursue a combination of two or more strategies simultaneously since a combination strategy is not risky, even if carried too far. Ans: F Page: 160 63
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Integration Strategies 8. Gaining ownership or increased control over distributors or retailers is called backward integration strategy. Ans: F Page: 160 9. Vertical integration strategies allow a firm to gain control over distributors, suppliers and/or competitors. Ans: T Page: 160 10. One reason for vertical integration is to gain control over creditors. Ans: F Page: 160 11. Gaining control over competitors is a primary purpose of diversification. Ans: F Page: 160 12. McDonald’s selling gas to its customers is an example of horizontal diversification. Ans: T Page: 161 13. Vertical strategy is seeking ownership or increased control over competitors. Ans: F Page: 161 14. Adding new but unrelated products or services defines concentric diversification strategy. Ans: T Page: 161 15. An example of an organization pursuing a concentric diversification strategy is ABC Hospital acquiring XYZ Bank. Ans: F Page: 161 16. Selling a division or part of the organization is called retrenchment. Ans: F Page: 161 64
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17. A company is pursuing a liquidation strategy if it sells all its assets in parts for their tangible worth. Ans: T Page: 161 18. Horizontal integration means seeking ownership or increased control over competitors. Ans: T Page: 161 19. Apple Computer Company introducing the Macintosh is an example of forward integration. Ans: F Page: 161 20. Establishing Web sites to sell products directly to consumers is a forward integration strategy. Ans: T Page: 161 21. Respectively, backward integration and forward integration deal mainly with distributors and suppliers. Ans: T Page: 161 22. When L. L. Bean, a catalog retailer, opened its first full-line retail store in Virginia, it pursued forward integration strategy. Ans: T
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chapter05 - CHAPTER 5 Strategies in Action True/False...

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