UGBS 402: BUSINESS POLICY MCQs

1. The decision-making hierarchy of a firm typically consists of three levels, including:

a) Corporate level, functional level, and operational level
b) Board of directors, middle management, and employees
c) Corporate level, business level, and functional level
d) CEO, CFO, and COO

2. Corporate-level executives in a multibusiness firm are responsible for:

a) Setting objectives and formulating strategies for individual business divisions
b) Enhancing the firm's image and fulfilling social responsibilities
c) Managing day-to-day operations of the firm
d) Analyzing market trends and customer behavior

3. Business-level strategic managers determine how the firm will compete by:
a) Adopting a reactive approach to market conditions
b) Identifying and securing the most promising market segment
c) Relying on external factors for decision-making
d) Emphasizing short-term objectives over long-term strategies

4. Functional-level managers are primarily responsible for:

a) Financial performance and non-financial goals of the firm
b) Developing annual objectives and short-term strategies
c) Determining the firm's competitive advantages
d) Formulating strategies for individual business divisions

5. Which of the following examples demonstrates a portfolio approach to strategic

management?
a) Airborne Express forming direct associations with national companies in foreign
countries
b) Saudi Arabian Oil building an oil refinery in Korea with its partner
c) Airborne Express setting up operations overseas
d) Saudi Arabian Oil reducing the role of international oil companies in processing
and selling crude oil

6. The functional level of a firm includes managers responsible for:

a) Setting objectives and formulating strategies for individual business divisions
b) Developing long-term plans for the firm
c) Translating corporate-level direction into concrete objectives and strategies
d) Enhancing the firm's image and fulfilling social responsibilities

7. According to the text, managers at the functional level of strategic management

primarily focus on:
a) Implementing the firm's strategic plans
b) Making conceptual decisions
c) Developing long-term financing strategies
d) Choosing the most promising market segments

8. Corporate-level decisions are characterized by:

a. Short time horizons and low risk
b. Greater need for flexibility and longer time horizons
c. Minimal cooperation and low cost
d. Relatively concrete and quantifiable factors

9. The implementation of computerized cash registers by Sears, Roebuck & Company

is an example of a:
a) Corporate-level decision
b) Functional-level decision
c) Business-level decision
d) Strategic-level decision

10. Business-level decisions are:

a) More costly, risky, and potentially profitable than corporate-level decisions
b) Less costly, risky, and potentially profitable than functional-level decisions
c) Less costly, risky, and potentially profitable than corporate-level decisions
d) More costly, risky, and potentially profitable than functional-level decisions
11. The formality of strategic management systems is influenced by factors such as:
a. The size of the organization and its management styles
b. The complexity of the environment and production process
c. The problems faced by the organization and the purpose of planning
d. All of the above

12. Greater formality in strategic management systems is generally associated with:

a. Higher costs and less comprehensive planning
b. Lower costs and more accurate planning
c. Lower costs and less successful planning
d. Higher costs and more successful planning

13. Which of the following is NOT a factor determining the appropriate degree of
formality in strategic management?
a. Size of the organization
b. Predominant management styles
c. Stage of development
d. Degree of competition in the industry

14. In, an entrepreneurial mode, firms are typically characterized by:

a. Centralized decision-making and extensive product lines
b. Decentralized decision-making and limited product lines
c. Centralized decision-making and limited product lines
d. Decentralized decision-making and extensive product lines

15. Formality in strategic management systems is positively correlated with:

a. Lower cost and less comprehensive planning
b. Higher cost and less accurate planning
c. Higher cost and more successful planning
d. Lower cost and more successful planning

16. Which of the following is NOT a component of Business Policy?

a) Environmental forecasting
b) Internal analysis
c) Financial management
d) Formulating plans and objectives

17. Business Policy is primarily concerned with:

a) Adapting to short-term market trends
b) Maximizing shareholder wealth through risk-taking
c) Achieving the company's long-term objectives through effective planning
d) Responding to the immediate demands of stakeholders

18. Anything people receive in exchange of their money is

a. Value
b. Commodity
c. Service
d. Commodity and service

19. The aspect of business policy that focuses on the future aspiration of a firm is
a. Vision
b. Mission
c. Objectives
d. Targets

20. The goal of a firm originates from

a. Vision
b. Mission
c. Objectives
d. Targets

21. Of the components for designing a business policy, business strategies fall under
a. Conduct an internal analysis
b. Assess the external environment - competitive and general contexts.
c. Analyze the company's options by matching its resources with the external
environment
d. Identify the most desirable options in light of the mission.
22. The components for designing a business are
a. 9
b. 6
C. 7
d. 8

23. Which of the following is an advantage of business policy

a. Guides objectives setting
b. Facilitates teamwork.
c. Coordinates corporate efforts
d. All the above

24. In strategic thinking, how long is long term, approximately?

a. 1 month to l year
b. 2 to 3 years
c. 3 to 5 years
d. More than 3 to 5 years

25. There are .................. generic global competitive strategies.

a. 3
b. 4
c. 6
d. 7

26. A .................................... is one in which no firm has a significant market share

and can strongly influence industry outcomes.
a. Declining industry
b. Mature industry
c. Fragmented industry
’ d. Global industry

27. A clear understanding of how the firm will generate profits and the strategic
actions it must take to succeed over the long term.
a. Strategic plan
b. Business plan
c. Business model
d. Balanced scorecard

28. A .............................. is defined as large interlocking relationships between

businesses of an industry.
a. Keiretsus
b. Chaebols ·
c. Consortia
d. Strategic alliances

29. The sale of a firm or of a major component directly relates to .....................

a. Turnaround strategy
b. Divestiture strategy
c. Recovery response
d. Consortia strategy

30. What commonly ranks second only to concentration as the least costly and least
risky of grand strategies?
a. Product development
b. Concentrated growth
c. Innovation
d. Market development

31. ........................... attempts to lead the industry in price and convenience by

pursuing a focus on lead and efficient operations.
a. Strategy focus
b. Operational excellence
c. Customer intimacy
d. Product leadership

32. The means of continually tailoring and shaping products and services to fit an
increasingly refined definition of the customer.
a. Customer focus
b. Customer differentiation
c. Customer intimacy
d. Market niche

33. A master long-term plan that provides basic direction for major actions for
achieving long-term business objectives is known as a ..............................
a. Generic strategy
b. Strategy
c. Grand strategy
d. Concentrated strategy

34. Process of integration of different countries is called ...............................

a. Liberalization
b. Privatization
c. Globalization
d. Closure

36. Considering competitive positions, firm who wants to hold market share in its
industry without rocking boat is classified as a ............................
a. Market challenger
b. Market leader
c. Market follower
d. Market nicher

37. A long term or grand strategy must be based on a core idea about how the firm
can best compete in the marketplace. This is termed as ............................
a. Low-cost leadership
b. Grand strategy
c. Generic strategy
d. Strategy focus

38. Rivalry becomes more ............................ and unpredictable when competitors are
diverse.
a. Complex
b. Simple
c. Narrow
d. Rigid

39. Competitor analysis is useful for ........................................

a. Strategies
b. Policies
c. Controls
d.Plans

40. Strategy is developed by the visionary chief executive in ............................ mode

of strategic management.
a. Planr1ing mode
b. Adaptive mode
c. Strategic mode
d. Entrepreneurial mode

41. Low cost, Differentiation and Focus are examples of............................

a. Corporate strategies
b. Operational strategies
c. Business strategies
d. Functional strategies

42. The word tactics is most likely to be associated with …………………

a. Business strategy
b. Corporate strategy
c. Operational strategy
d. Functional strategy

43. Which type of strategies are of particular importance to global companies?

a. Corporate
b. Functional
c. Competitive
d. Corporate and competitive
44. A ........................ strategy addresses organizational weaknesses, helps stabilize
operations and revitalizes organizational resources and capabilities.
a. Unrelated diversification
b. Horizontal integration
c. Vertical integration
d. Retrenchment

44. Two reasons for mergers and acquisitions are ....................................

a. To increase managerial staff and minimize economies of scale
b. To reduce tax obligations and increase managerial staff
c. To create seasonal trends in sales and to make better use of a new sales force
d. To provide improved capacity utilization and to gain new technology

45. All of the following are stated advantages of a divisional structure except
a. It allows local control of local situations
b. It leads to a competitive climate within a firm
c. Accountability is clear
d. It promotes specialization of labor

46. A structure that expedites decision making in response to varied competitive .

enviromnents relates to a ..................................
a. Divisional organizational structure
b. Functional organizational structure
c. Simple organizational structure
d. Organizational structure

47. A structure intended to make the best use of talented people within a firm by
combining the advantages of functional specialization and product-project
specialization relates to a …………………
a. Holding company structure
b. Product-team structure
c. Matrix structure
d. Strategic business unit
48. A ……………………….. seeks to simplify and amplify the focus of resources on
a narrow but strategically important product, market, customer or innovation.
a. Matrix structure
b. Functional organizational structure
c. Product-team structure
d. Simple organizational structure

49. An ................................................... emphasizes coordination over control

as well as flexibility.
ANS: ambidextrous organization

50. A ...................................................provides products or services using different,

self-contained specialists or companies brought together-outsourcing to
contribute their primary or support activity to result in a successful outcome.
ANS: modular organization

51. ................................................ can be worthwhile.

ANS: Planned liquidation

52. The primary causes of the turnaround situation have been associated with the
second phase of the turnaround process which is known as the ……………..
ANS: recovery response

53. Organizations strive for overall ..............................................in the industry.

ANS: Competitiveness

54. Organizations strive to create and make unique producer for varied customer
groups through................................................…
ANS: differentiation.

55. Organizations strive to have special appeal to one or more groups consumers or
industrial buyers, ................................ on their cost or differentiation concerns.
ANS: focusing
56. The .......................................... is a set of four measures that are directly
linked to the company’s strategy.
ANS: balance scorecard

57. According to the BCG, corporate parents add value through ............ types of
levers.
ANS: Five

58. Strategic analysis should center on .............................................. more than

strategic positioning.
ANS: Strategic process

59. .......................................... are different from business or corporate strategies.

ANS: Functional tactics

60. A leader’s clear sense of where they want to lead their company and what results
they expect to achieve is termed as .......................................................…
ANS: Strategic intent

61. ..............................., in a leadership sense, is a highly motivated sense of

commitment to what you do and want to do.
ANS: Passion

62. Strategic control consists of............... types.

ANS: Four (4)

63. .................................... is designed to check systematically and continuously

whether the premises on which the strategy is based are still valid.
ANS: Premise control

64. There are .................. basic types of implementation control.

ANS: Two
65. The balanced scorecard was developed by Robert Kaplan and ..........................…
ANS: David P. Norton

66. A user interface that organizes and presents information from multiple digital
sources simultaneously in a user-designed format on the computer screen is defined as
a ……………………
ANS: Dashboard

67. Strategic control and ....................................... control programs like balanced

scorecard bring the entire management task into focus.
ANS: Operational

68. Organizational leaders can ............................... or radically change their firm’s

strategy based on feedback from a balanced scorecard approach as well as other
strategic controls.
ANS: Adjust

69. ................................ is defined as the initial commercialization of invention by

producing and selling a new product, service, or process.
ANS: Innovation

70. The creation of new products or processes through the development of new
knowledge of from new combinations of existing knowledge is termed as ………….
ANS: Invention

71. ............................................... refers to simple changes or adjustment in existing

products, services or processes.
ANS: Incremental innovation

72. Breakthrough approaches to innovation are inherently more .........................than

incremental innovation approaches.
ANS: Risky

73. Innovation involves creation something that doesn’t now..........................

ANS: Exist

74. An........................... is defined as a well-enabled, virtual marketplace which

connects people with unique ideas, talents, resources, or capabilities with companies
seeking to address problems or potential innovations in a quick competent manner.
ANS: ideagoras

75. Central to Entrepreneurial process, there exists .................. elements.

ANS: three

76. ...........................................is generally obtained from a commercial bank to

pay for property, equipment, and maybe provide working capital.
ANS: Debt Financing

77. ............................................. is usually obtained from one or more of three

sources; friendly sources, informal venture investors, or professional venture
capitalist.
ANS: Equity financing