David - Chapter 3 - MC - Multiple Choice Questions DAVID...

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Multiple Choice Questions DAVID CHAPTER 3 The External Assessment The Nature of an External Audit 1. __________ is not part of an external audit. a. Analyzing competitors b. Analyzing financial ratios c. Analyzing available technologies d. Studying the political environment e. Analyzing social, cultural, demographic and geographic forces Ans: b Page: 83 2. Identifying and evaluating key social, political, economic, technological and competitive trends and events comprise a. developing an effective mission statement. b. conducting an internal audit. c. performing an external audit. d. formulating strategy. e. implementing strategy. Ans: c Page: 83 3. The process of performing an external audit needs to include: a. only top level managers, as it’s a planning function. b. as many managers and employees as possible. c. primarily front-line supervisors d. between 15 to 20 managers for it to be valid e. stockholders and external government agencies Ans: b Page: 83 4. To perform an external audit, a company first must: a. get an approval from the Securities and Exchange Commission b. perform an internal audit c. gather competitive intelligence and information about external trends d. hire a consultant to develop a comprehensive strategic plan. e. all of these Ans: c Page: 84 The Industrial Organization (I/O) View 5. The I/O approach to competitive advantage advocates that external factors are ________ internal factors in a firm achieving competitive advantage. a. less important than b. as important as c. more important than d. more common than e. less common than Ans: c Page: 84 6. According to I/O theorists, which of the following contributes least to firm performance?
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a. Economies of scale b. Barriers to market entry c. Product differentiation d. Internal resources e. Level of competitiveness Ans: d Page: 84 Economic Forces 7. Which type of trend is exemplified by the increasing numbers of two-income households in America? a.
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David - Chapter 3 - MC - Multiple Choice Questions DAVID...

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