Coulter Smia6 TB Mod

Strategic Management in Action, 6e (Coulter)
Module - Special Topics in Strategy
1) Entrepreneurial ventures pursue opportunities, are characterized by innovative practices, and

have growth and profitability as their main goals.
Answer: TRUE
Diff: 1 Page Ref: 215
AACSB: Analytical Skills
Objective: Describe how strategic management can be utilized by entrepreneurs and applied to
small businesses
2) A small business is one that has fewer than 100 employees.

Answer: FALSE
small businesses
3) Entrepreneurial ventures and small businesses are not the same.

Answer: TRUE
small businesses
4) Small businesses represent more than 99 percent of all employers.

Answer: TRUE
small businesses
5) Small businesses account for over 90 percent of the private sector output.
Answer: FALSE
small businesses
6) Economists suggest that most small businesses are not particularly good at creating jobs.
Answer: TRUE
small businesses
1
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall
7) Small businesses employ over half of all private workers.
Answer: TRUE
small businesses
8) A small business is defined as one that is independently owned, operated, and financed; has
fewer than 100 employees; engages in innovation marketing practices; and has relatively little
impact on its industry.
Answer: FALSE
small businesses
9) Both small businesses and entrepreneurial ventures play an important role in the global
economy.
Answer: TRUE
small businesses
10) Innovation is the process of creating, changing, experimenting, transforming, and

revolutionizing.
Answer: TRUE
small businesses
11) Developing a sustainable competitive advantage is important for all organizations.

Answer: TRUE
small businesses
12) In almost every study, strategy research has shown positive linkages between planning and
business performance.
Answer: FALSE
small businesses
2
13) Some small businesses are ineffective in part due to the "boiled frog phenomenon."
Answer: TRUE
small businesses
14) Small businesses and entrepreneurial ventures can compete successfully in narrow market
niches by developing a low-cost, differentiation, or integrated competitive advantage.
Answer: TRUE
small businesses
15) The main difference between large and small organizations' strategy evaluation efforts will
be in terms of the magnitude or extent of evaluation that is done.
Answer: TRUE
small businesses
16) Research has shown that small firms that mixed efficiency (low-cost) and flexibility
(differentiation) strategies significantly outperformed those firms that utilized one or the other.
Answer: FALSE
small businesses
17) Recruiting, motivating, and retaining employees is a big challenge for all organizations.
Answer: TRUE
small businesses
18) The process in which existing products, processes, ideas, and businesses are replaced with
better ones is creative destruction.
Answer: TRUE
small businesses
3
19) A not-for-profit organization has as its purpose to provide some service or good with no
intention or goal of earning a profit and has met the requirements of the U.S. Internal Revenue
Service tax code as a tax-exempt organization.
Answer: TRUE
Objective: Describe the process of strategic management in not-for-profit and public sector
organizations
20) Public sector organizations are not considered to be not-for-profit organizations.

Answer: FALSE
organizations
21) Strategic managers at not-for-profit organizations face similar constraints of limited

resources, competition for customers and resources, performance measurement, and long-run
survival, just as strategic managers at for-profit organizations do.
Answer: TRUE
organizations
22) A marketing alliance is a strategic practice in which for-profit businesses link up with a
social cause that fits well with the company's product or service.
Answer: FALSE
organizations
23) Strategic piggybacking is the development of a new activity that would generate revenue for
the not-for-profit organization.
Answer: TRUE
organizations
4
24) Small businesses are independent businesses that have fewer than ________ employees.
A) 100
B) 200
C) 300
D) 500
E) 1000
Answer: D
small businesses
25) Small businesses represent more than ________ percent of all employers.
A) 40
B) 50
C) 99
D) 60
E) None of the above answer choices is correct.
Answer: C
small businesses
26) Small businesses account for ________ percent of the private sector output.
A) 10
B) 20
C) 25
D) 50
E) 99
Answer: D
small businesses
27) Small businesses employ over ________ of all private workers.

A) 90 percent
B) 25 percent
C) a third
D) half
E) 75 percent
Answer: D
small businesses
5
28) A small business is not characterized by
A) being independently owned.
B) having fewer than 100 employees.
C) engaging in innovative practices.
D) having little impact on its industry.
E) None of the answer choices is correct.
Answer: C
small businesses
29) A business that is characterized by innovative strategic practices and which has as its main
goals profitability and growth is called
A) a small business.
B) an entrepreneurial venture.
C) strategically positioned.
D) a cash cow.
E) a star.
Answer: B
small businesses
30) One difference between an entrepreneurial venture and a small business is the former's
A) willingness to take risks
B) innovative strategic practices
C) strategic goals are profitability and growth
D) interest in seeking out new opportunities
E) All of the answer choices are correct.
Answer: E
small businesses
6
31) Which of these is NOT a characteristic of entrepreneurial ventures?
A) Little impact on industry
B) Innovative practices
C) Pursue opportunities
D) Have growth and profitability as main goals
Answer: A
small businesses
32) According to the Global Entrepreneurship Monitor (GEM) 2011 report, there are more than
________ million entrepreneurs in the 54 countries covered.
A) 25
B) 36
C) 400
D) 250
E) 700
Answer: C
small businesses
33) Which of the following is a strategic advantage of small businesses and entrepreneurial
ventures over larger businesses?
A) Willingness to take risks
B) Seek out new opportunities
C) Respond quickly to changing conditions
D) Strategic goals are profitability and growth
Answer: C
small businesses
7
34) The strategic management process differs for small businesses and entrepreneurial ventures
when compared to larger organizations because
A) small businesses and entrepreneurial ventures have inexperienced managers.
B) small businesses and entrepreneurial ventures have limited resources.
C) small businesses and entrepreneurial ventures have smaller organizational objectives.
D) small businesses and entrepreneurial ventures have low growth potential.
E) small businesses and entrepreneurial ventures have more exposure to lobbying groups.
Answer: B
small businesses
35) The competitive strategy choices for small businesses and entrepreneurial ventures are
A) often limited to focus strategies.
B) often limited to a low-cost strategy.
C) often limited to a differentiated strategy.
D) limited because of technological advances.
E) almost nonexistent.
Answer: A
small businesses
36) The number of markets served by a small organization is determined predominantly by

A) the resources of the organization.
B) the size of the organization.
C) the management of the organization.
D) strategic planning in the organization.
E) the culture of the organization.
Answer: B
small businesses
8
37) A strategic advantage of entrepreneurial ventures/small businesses over large businesses is
A) economics of scale.
B) flexibility.
C) marketing options.
D) distribution.
E) profit potential.
Answer: B
small businesses
38) Small businesses and entrepreneurial ventures are the driving force of change in the process
of
A) market positioning.
B) strategic positioning.
C) creative destruction.
D) competitor interrelationships.
E) cause-related marketing.
Answer: C
small businesses
39) A not-for-profit organization must meet the requirements of ________ of the U.S. Internal
Revenue Service tax code.
A) Section 501(c)(3)
B) Section 301(d)(4)
C) Section 503(c)(4)
D) Section 401(c)(3)
E) Section 403(d)(4)
Answer: A
organizations
9
40) Which of the following is not a source of revenue for not-for-profit organizations?
A) Dues
B) Product sales
C) User fees
D) Grants
Answer: E
organizations
41) Which of the following is not an example of a not-for-profit organization?

A) A religious organization
B) A private educational institution
C) A charitable organization
D) A professional membership association
Answer: E
organizations
42) All of the following organizations are examples of social service NFPs except
A) Junior League.
B) Camp Fire.
C) Mothers Against Drunk Drivers.
D) Academy of Management.
E) American Red Cross.
Answer: D
organizations
10
43) A not-for-profit organization created, funded, and regulated by the public sector or
government can be referred to as
A) a private-sector organization.
B) an efficient organization.
C) a public-sector organization.
D) an effective organization.
E) a quasi-government organization.
Answer: C
organizations
44) Public services provided by public-sector organizations include

A) police protection.
B) paved roads.
C) recreation facilities.
D) assistance for the needy.
Answer: E
organizations
45) One study reported that the global nonprofit sector had total operating expenditures of over
________ trillion
A) $1.6
B) $2.5
C) $3
D) $5
E) $6
Answer: A
organizations
11
46) The United States Postal Service faces competition from
A) e-mail.
B) fax machines.
C) Federal Express.
D) Airborne Express.
Answer: E
organizations
47) Not-for-profit organizations face the constraint of

A) limited resources.
B) competition for customers and resources.
C) performance measurement.
D) long-run survival.
Answer: E
organizations
48) Public sector organizations are most affected by ________ constraints.

A) internal
B) external
C) efficiency
D) managerial
Answer: B
organizations
12
49) Research on community arts organizations has indicated that Porter's strategy(ies) of
________ is(are) utilized.
A) cost leadership
B) differentiation
C) focus
D) differentiation and focus
E) cost leadership, differentiation, and focus
Answer: E
organizations
50) Both public sector and not-for-profit organizations must develop a(n) ________ to ensure
their continued existence.
A) competitive advantage
B) strong management pool
C) lobbying group
D) link with companies
Answer: A
organizations
51) Examples of measurement of a church's strategic performance include all of the following
except
A) member contributions.
B) percentage increase or decrease of members.
C) number of members.
D) All of the answer choices are correct.
Answer: D
organizations
13
52) To evaluate strategy, there must be a connection between the evaluation and the ________ of
the not-for-profit organization.
A) revenues
B) goals
C) objectives (moderate)
D) goals and objectives
Answer: D
organizations
53) Which of the following is not one of the unique strategies that have been developed for not-
for-profit organizations in order to cope with changing environmental conditions?
A) Cause-related marketing
B) Not-for-profit marketing alliances
C) Licensing
D) Direct investment
E) Strategic piggybacking
Answer: D
organizations
54) An example of a cause-related NFP is

A) Camp Fire.
B) the University of Minnesota.
C) Save the Whales.
D) Bill and Melinda Gates Foundation.
E) Rockefeller Foundation.
Answer: C
organizations
14
55) The strategy that has the primary intent to enhance the image of the supporting company is
known as
A) cause-related marketing.
B) not-for-profit marketing alliances.
C) licensing.
D) direct investment.
E) strategic piggybacking.
Answer: A
organizations
56) A strategic practice in which for-profit businesses link up with a social cause that fits in well
with the company's product or service is referred to as
A) licensing.
B) franchising.
C) cause-related marketing.
D) strategic piggybacking.
E) marketing alliances.
Answer: C
organizations
57) An alliance in which the not-for-profit organization proposes and initiates the partnership is
referred to as
A) a not-for-profit marketing alliance.
B) cause-related marketing.
C) effect-related marketing.
D) licensing.
E) strategic piggybacking.
Answer: A
organizations
15
58) A strategic partnership between a not-for-profit organization and a corporate partner is
referred to as
A) licensing.
B) strategic piggybacking.
C) a not-for-profit marketing alliance.
D) cause-related marketing.
Answer: C
organizations
59) The not-for-profit marketing alliance is an extension of

A) mergers and acquisitions.
B) divestment.
C) cause-related marketing.
D) licensing.
Answer: C
organizations
Charles Hanson has just opened Chuck's Bikes and Trikes, a motorcycle repair facility. You have
been hired to advise Mr. Hanson with his new business.
60) Charles Hanson has employed 25 employees even though the repair facility is located in a
small rural town. Chuck's Bikes and Trikes is an example of
A) an entrepreneurial venture.
B) a small business.
C) an innovative business.
Answer: B
small businesses
16
61) You recommend performing an external analysis for Chuck's Bikes and Trikes. The
arguments to support this external analysis recommendation include
A) external environment aspects can affect the company.
B) gaining information on changes in customer expectations, competitors and their actions,
economic factors, technological advances, and other marketplace features are important to the
future of the company.
C) to detect subtle, but potentially damaging changes.
Answer: D
small businesses
62) Chuck's Bikes and Trikes is likely using the ________ strategy.
A) differentiation
B) low cost
C) focus
D) best cost
Answer: C
small businesses
63) Chuck Hanson encourages his employees to come with new ideas and ways to do business to
replace existing practices. This process is called
A) destructive creativity.
B) innovation.
C) creative destruction.
Answer: C
small businesses
17
64) What are the features of entrepreneurial ventures?
Answer:
∙ These are organizations that pursue opportunities.
∙ Such organizations are characterized by innovative practices.
∙ These organizations have growth and profitability as their main goals.
AACSB: Reflective Thinking
small businesses
65) How do small businesses impact jobs?

Answer:
∙ Small businesses represent more than 99 percent of all employers.
∙ They employ over half of all private workers.
∙ However, new data indicates that most small businesses are not particularly good at creating
jobs.
small businesses
66) Describe the characteristics of an entrepreneurial venture and a small business.

Answer: Small businesses are independently owned, operated, and financed. They have fewer
than 100 employees, and they do not emphasize new or innovative practices. Additionally, small
businesses have little impact on the industry. With entrepreneurial ventures, those organizations
have innovative strategic practices, and those ventures may have risk involved. The strategic
goals in entrepreneurial ventures are profitability and growth. Entrepreneurial ventures often
seek out new opportunities.
small businesses
18
67) Explain the advantages and disadvantages of strategic planning with entrepreneurial ventures
and small businesses.
Answer:
∙ With entrepreneurial ventures and small businesses, there is a positive relationship between
strategic planning and long-run success and survival as well as performance. Another advantage
of strategic planning is that there is more complete knowledge of strategic issues facing the
organization. Another advantage is the positive influence on product-service innovation.
∙ In terms of disadvantages, strategic planning may take time and resources to complete setting
organizational goals. Managers may also not be able to conduct strategic planning. Another
disadvantage lies with the problem associated with the managers' inability to implement the
strategic plan. There is possible harm with strategic planning if managers plan for an opportunity
that does not exist with the organization.
Diff: 2 Page Ref: 217-218
small businesses
68) Compare the terms cause-related marketing and not-for-profit marketing alliances.
Answer: Cause-related marketing is a strategic practice in which for-profit businesses link up
with a social cause that fits in well with the company's product. Not-for-profit marketing
alliances are an extension of cause-related marketing. The NFP marketing alliance is an
opportunity for a NFP to form a strategic alliance with one or more corporate partners. The
marketing alliance will benefit all constituencies involved.
organizations
69) Describe the types of NFP marketing alliances.

Answer: The transaction-based promotion is an alliance in which the corporate partner
donates a specific amount of cash, food, or equipment in direct proportion to sales revenues,
typically up to a certain limit. The joint issue promotion is an alliance in which the partners
agree to tackle a social problem through actions such as advertising and distributing products and
promotional materials. Licensing involves the licensing names and logos of not-for-profits in
return for a fee or percentage of revenues. These alliances allow the not-for-profit organization to
obtain sources of revenue.
organizations
19

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Strategic Management in Action, 6e (Coulter)

Module - Special Topics in Strategy

1) Entrepreneurial ventures pursue opportunities, are characterized by innovative practices, and

2) A small business is one that has fewer than 100 employees.

3) Entrepreneurial ventures and small businesses are not the same.

4) Small businesses represent more than 99 percent of all employers.

10) Innovation is the process of creating, changing, experimenting, transforming, and

11) Developing a sustainable competitive advantage is important for all organizations.

20) Public sector organizations are not considered to be not-for-profit organizations.

21) Strategic managers at not-for-profit organizations face similar constraints of limited

27) Small businesses employ over ________ of all private workers.

36) The number of markets served by a small organization is determined predominantly by

41) Which of the following is not an example of a not-for-profit organization?

44) Public services provided by public-sector organizations include

47) Not-for-profit organizations face the constraint of

48) Public sector organizations are most affected by ________ constraints.

54) An example of a cause-related NFP is

59) The not-for-profit marketing alliance is an extension of

65) How do small businesses impact jobs?

66) Describe the characteristics of an entrepreneurial venture and a small business.

69) Describe the types of NFP marketing alliances.

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