Chapter 10 and 11

1. The hiring of new people with new skills, firing of people with inappropriate or
substandard skills, and/or training existing employees to learn new skills. STAFFING

2. Executives with a particular mix of skills and experiences may be classified as an

executive type and paired with. A SPECIFIC CORPORATE STRATEGY

3. A type of chief executive officer with a great deal of experience in that particular industry
would be appropriate for a corporation following a concentration strategy emphasizing
vertical or horizontal growth. DYNAMIC INDUSTRY EXPERT

4. A type of chief executive officer who is highly knowledgeable in other industries and can
manage diverse product lines would be appropriate for a corporation following a
diversification strategy. ANALYTICAL PORTFOLIO MANAGER

5. A type of chief executive officer with a conservative style, a production or engineering

background, and experience with controlling budgets, capital expenditures, inventories, and
standardization procedures would be appropriate for a corporation following a stability
strategy. CAUTIOUS PROFIT PLANNER

6. Successful prospector firms tend to be headed by CEOs with backgrounds in the areas of.
RESEARCH/ENGINEERING AND GENERAL MANAGEMENT

7. Successful defender firms tend to be headed by CEOs with backgrounds in the areas of.
ACCOUNTING/FINANCE, MANUFACTURING/PRODUCTION, AND GENERAL
MANAGEMENT

8. Successful analyzer firms tend to be headed by CEOs with backgrounds in the areas of.
MARKETING/SALES

9. The process of replacing a key top manager is called. EXECUTIVE SUCCESSION

10. To ensure employees are gaining the appropriate mix of experience to prepare employees
for future responsibilities, many corporations move people from one job to another utilizing
the technique of. JOB ROTATION

11. The end result of activity is known as. PERFORMANCE

12. Controls that measure variables that influence future p[profitability are called.
STEERING CONTROLS

13. The inventory turnover ratio is an example of a(n). STEERING CONTROL

14. A type of control which specifies how something is to be done through policies, rules,
standard operating procedures, and orders from a superior. BEHAVIOR CONTROL
15. A type of control which specifies what is to be accomplished by focusing on the end result
of behaviors through the use of objectives and performance targets or milestones. OUTPUT
CONTROL

16. The ISO 9000 Standards Series is one example of. BEHAVIOR CONTROL

17. ________ is a corporate-wide, integrated process to manage the uncertainties that could
negatively or positively influence the achievement of the corporation's objectives.
ENTERPRISE RISK MANAGEMENT

18. The present value of the anticipated future stream of cash flows from the business plus the
value of the company if liquidated is referred to as. SHAREHOLDER VALUE

19. The measure which is after-tax operating income minus the total annual cost of capital is
called. EVA

20. The balanced scorecard approach to evaluation and control assigns to each goal/objective
in an area one or more measures that are each essential for achieving a desired strategic
option. These measures are called. KEY PERFORMANCE MEASURES

21. Staffing issues can involve hiring new people with new skills, firing people with
inappropriate or substandard skills, and/or training existing employees to learn new skills.
TRUE

22. Staffing requirements are likely to follow a change in strategy. TRUE

23. A dynamic industry expert is someone with an analytical mind who is highly
knowledgeable in other industries and can manage diverse product lines. FALSE

24. Chandler proposed that the most appropriate CEO for a firm remains constant as the
company proceeds through its life cycle. FALSE

25. Analyzers tend to have CEOs with a marketing/sales background. TRUE

26. Executive succession is the process of replacing a key top manager. TRUE

27. Firms in trouble seldom choose outsiders to lead them. FALSE

28. Downsizing refers to the planned elimination of positions or jobs. TRUE

29. Research indicates that companies undertaking cost-cutting programs are four times more
likely than others to cut costs again, typically by reducing staff. TRUE

30. Research indicates that a multinational corporation performs at a higher level when its
CEO has international experience. TRUE

31. One of the obstacles to effective control is the difficulty in developing appropriate
measures of important activities and outputs. TRUE

32. Performance is the end result of activity. TRUE

33. One example of a steering control used by retail stores is the inventory turnover ratio,
which shows how hard an investment in inventory is working. TRUE

34. Behavior controls specify how something is to be done through policies, rules, standard
operating procedures, and orders from a superior. TRUE

35. ACB is an accounting method for allocating direct and fixed costs to individual products.
FALSE

36. ABC accounting allows accountants to charge costs more accurately than the traditional
method because it allocates overhead far more precisely. TRUE

37. Operating cash flow is also known as free cash flow. FALSE

38. Unlike ROI, managers cannot manipulate the numbers of EVA. FALSE

39. The balanced scorecard combines financial measures that tell the results of actions
already taken with operational measures on customer satisfaction, internal processes, and the
corporation's innovation and improvement activities. TRUE

40. The revenue center is measured in terms of efficiency. FALSE