Chapter 2 - The Business Vision and Mission

Test Bank For Strategic Management 17th Edition David

1. Vision and mission statements can often be found in the front of annual reports.: True

2. While vision and mission statements are part of numerous internal reports, they should never be displayed in a firm's premises.: False

3. The foundation for development of a comprehensive mission statement is provided by a clear vision.: True

4. The mission statement should be short-preferably one sentence.: False

5. When developing a vision statement, input should be received from as many managers as possible.: True

6. If an organization chooses to have both a mission and a vision, the mission statement should be established first.: False

7. According to Peter Drucker, asking the question "What is our business?" is synonymous with asking the question "What is our vision?": False

8. A mission statement is a declaration of an organization's reason for be- ing.: True

9. A mission statement, sometimes called a creed statement, can be defined as an enduring statement of purpose that distinguishes one organization from other similar enterprises.: True

10. Small, nonprofit organizations never develop mission statements.: False

11. A mission statement is a declaration of an organization's financial sta- tus.: False

12. A mission statement can sometimes be called a statement of philosophy.-

: True

13. Carefully prepared statements of vision and mission are widely recog- nized as the first step in strategic management.: True

14. An important question a mission statement should answer is, "What do we want to become?": False

15. Whereas the mission statement answers the question, "What do we want to become?" the vision statement answers the question, "What is our business?": False

16. In order to motivate a workforce effectively, both profit and vision are needed.: True

17. When developing a mission statement, it is usually advisable to involve as few managers as possible.: False

18. The first step in the process of developing a mission statement is to

ask all participants to prepare what they believe the organization's mission should be.: False

19. According to Campbell and Yeung, the process of developing a mission statement should create an "emotional bond" and "sense of mission" be- tween the organization and its employees.: True

20. According to Campbell and Yeung, an organization's vision is associated with behavior and with the present.: False

21. According to King and Cleland, carefully developed and written mission statements provide a basis for organizing work, departments, activities, and segments around a common purpose.: True

22. Research has failed to find a positive relationship between mission state- ments and organizational performance.: False

23. Mission statements are sometimes difficult to derive because top man- agement may disagree over company objectives.: True

24. According to Drucker, the most important time for a company to develop mission and vision statements is when the company is experiencing finan- cial difficulty.: False

25. In multidivisional organizations, each division should develop a mission statement consistent with and supportive of the corporate mission.: True

26. One benefit of having a clear mission and vision is that it projects a sense of worth and intent to all stakeholders.: True

27. A mission statement promotes a sense of shared expectations among all managers and employees.: True

28. When a company has been successful the question "What is our busi- ness?" becomes unnecessary.: False

29. A mission statement is usually just a simple statement of specific de- tails.: False

30. A mission statement should be broad enough to reconcile differences among an organization's various stakeholders.: True

31. Stakeholders of an organization include stockholders, customers and creditors, but not competitors.: False

32. Individuals who own stock in a corporation are considered stakeholders.-

: True

33. Stakeholders both affect and are affected by an organization's strategic decisions.: True

34. Mission statements cannot be stated with too high a level of specificity.-

: False

35. The relative attention an organization will devote to meeting the claims of various stakeholders is indicated in a good mission statement.: True

36. Excess specificity can stifle creativity in the formulation of an acceptable mission or purpose.: True

37. It is unusual for the claims and concerns of a company's stakeholders to vary or conflict.: False

38. In most cases, at least 500 words are required to effectively state a mission statement.: False

39. An effective mission statement generates the impression a firm is suc- cessful, has direction, and is worthy of time, support and investment.: True

40. According to Vern McGinnis, an effective mission statement should de- fine what the organization is and what the organization aspires to be.: True

41. Having a clear mission and vision can provide a basis for a company's internal and external assessment.: True

42. Good mission statements identify the utility of a firm's products to its customers.: True

43. Attracting customers is a major reason for developing a mission state- ment.: True

44. AT&T's mission statement focuses on telephones rather than on commu- nication.: False

45. A mission statement that is limited enough to exclude some ventures is a poor mission statement.: False

46. A good mission statement serves as a framework for evaluating both current and prospective activities.: True

47. The operating philosophy of organizations should be to develop a prod- uct and then try to find a market for it.: False

48. One of the benefits of having a clear mission and vision is promoting a sense of shared expectations among all managers and employees.: True

49. According to George Steiner, vagueness has no place in a good mission statement.: False

50. A mission statement should be broad in scope, since concrete specifica- tion could be the base for rallying opposition.: True

51. Union Pacific's mission statement focuses on transportation rather than on railroads because good mission statements identify the utility of a firm's products to its customers.: True

52. The utility statement, "Do not offer me attractive looks; offer me clothes," is relevant in developing a mission statement.: False

53. A firm's philosophy in a mission statement addresses the question, "What is the firm's distinctive competence?": False

54. A firm's concern for employees in a mission statement addresses the question, "Is the firm responsive to social, community, and environmental concerns?": False

55. According to Peter Drucker, developing a clear business vision and mis- sion is the first responsibility of strategists.: True

56. A sense of self-concept is one of the nine components a good mission statement should include.: True

57. Well-conceived and properly executed mission and vision statements do not need to be subject to revision.: False

58. All of the following are mentioned as places where vision and mission statements can often be found EXCEPT

A) SEC reports.

B) annual reports.

C) customer service agreements. D) supplier agreements.

E) business plans.: A) SEC reports.

59. Which statement is TRUE?

A) Companies must choose between having a mission statement or a vision statement.

B) A company can't have a mission statement unless it has a vision state- ment.

C) A vision statement cannot be established until a company has developed its mission statement.

D) The vision statement should be established before the mission statement. E) Companies are required by law to have both mission and vision state- ments.: D) The vision statement should be established before the mission state- ment.

60. Which of these basic questions should a vision statement answer? A) What is our business?

B) Who are our employees? C) What are our challenges?

D) What do we want to become?

E) Who are our competitors?: D) What do we want to become?

61. Which type of statement should be created first and foremost? A) Creed

B) Vision

C) Objectives

D) Mission

E) Competitive advantage: B) Vision

62. The ideal length of a vision statement is

A) one page.

B) several paragraphs. C) one sentence.

D) several sentences.

E) as long as is necessary to convey the message.: C) one sentence.

63. Who is referred to as "the father of modern management"? A) Cleland

B) Campbell C) Drucker D) McGinnis

E) Yeung: C) Drucker

64. What is the first step in the comprehensive strategic-management mod- el?

A) Developing vision and mission statements

B) Performing external audits

C) Performing internal audits

D) Measuring and evaluating performance

E) Establishing long-term objectives: A) Developing vision and mission state- ments

65. According to the comprehensive strategic-management model, which step needs to be completed immediately following the establishment of long-term objectives?

A) Developing vision and mission statements

B) Performing external audits

C) Performing internal audits

D) Generating, evaluating, and selecting strategies

E) Measuring and evaluating performance: D) Generating, evaluating, and se- lecting strategies

66. The purpose of a mission statement is to declare all of these EXCEPT A) a reason for being.

B) an annual financial plan. C) a statement of purpose. D) a statement of beliefs.

E) whom it wants to serve.: B) an annual financial plan.

67. As indicated in the strategic-management model, a clear                  is needed before long-term objectives can be established.

A) short-term objective B) implementation plan C) audit policy

D) mission statement

E) evaluation strategy: D) mission statement

68. A business' mission is the foundation for all of the following EXCEPT A) priorities.

B) strategies. C) plans.

D) employee wage rates.

E) work assignments.: D) employee wage rates.

69. According to Drucker, which question is synonymous with asking "What is our mission?"

A) What is our business?

B) How can we improve ourselves? C) What do we want to become?

D) Who are our stakeholders?

E) How can we increase profitability?: A) What is our business?

70. Which basic question should the vision statement answer? A) What is our business?

B) How can we improve ourselves? C) What do we want to become?

D) Who are our stakeholders?

E) How can we increase profitability?: C) What do we want to become?

71. In the process of developing a mission statement, it is important to involve

A) as few managers as possible.

B) as many managers as possible. C) upper-level management only. D) lower-level management only.

E) the board of directors only.: B) as many managers as possible.

72. The process of developing a vision and mission statement often includes which of these as the first activity?

A) Requesting that managers modify the current document

B) Asking managers to read selected articles about mission statements

C) Asking managers to prepare a mission statement for the organization

D) Having a brainstorming session on whether the organization should have a mission statement

E) Merging several mission statements into one document: B) Asking man- agers to read selected articles about mission statements

73. After a draft mission statement has been developed, it is important to

A) ask managers to read several articles about mission statements as back- ground information.

B) vote on the mission statement.

C) ask managers to prepare a mission statement for the organization. D) ask managers to seek support for the mission statement from their subordinates.

E) request modifications, additions, and deletions to the mission statement.-

: E) request modifications, additions, and deletions to the mission statement.

74. What can be used to promote unbiased views and to manage the devel- opment of the mission statement more effectively?

A) An internal group

B) A committee of managers

C) Command-and-control

D) Surveys

E) An outside facilitator: E) An outside facilitator

75. According to Campbell and Yeung, what is/are most likely associated with behavior and the present?

A) Mission

B) Values

C) Long-term objectives

D) Vision

E) Possibilities: A) Mission

76. A study by Rarick and Vitton found that firms with a formalized mission statement have                 the average return on shareholders' equity than those firms without a formalized mission statement.

A) one-quarter

B) half

C) twice

D) three times

E) five times: C) twice

77. Businessweek reports that firms using mission statements have a

                 percent higher return on certain financial measures than those without such statements.

A) 10

B) 15

C) 30

D) 45

E) 50: C) 30

78. Which best expresses former Colgate CEO Reuben Mark's thoughts on vision?

A) It's becoming less important that a clear mission make sense internation- ally.

B) It's essential to drive home different messages in different cultures. C) Keeping the vision simple will never rally everyone to the corporate banner.

D) Pushing one vision globally is essential.

E) Elevated missions or visions will alienate international markets.: D) Push- ing one vision globally is essential.

79. When developing a mission statement, what is needed before people can focus on specific strategy formulation activities?

A) Negotiation

B) Compromise

C) Eventual agreement

D) A and B only

E) All of the above: E) All of the above

80. What is the best time to develop a mission statement? A) When a firm is in decline

B) When the firm is successful

C) When the firm is in financial trouble

D) When the firm is in legal trouble

E) When the firm encounters competition: B) When the firm is successful

81. All stakeholders' claims on an organization                  pursued with equal emphasis.

A) cannot be

B) should always be C) are required to be D) must ideally be

E) can usually be: A) cannot be

82. Which group would be classified as stakeholders? A) Governments

B) Creditors C) Suppliers D) Employees

E) All of the above: E) All of the above

83. All stakeholders

A) have claims and concerns about an organization, but these claims and concerns vary.

B) have the same claims and concerns about an organization. C) have ownership rights in an organization.

D) have the same voting rights in an organization.

E) have environmental concerns as their top priority.: A) have claims and concerns about an organization, but these claims and concerns vary.

84. A good mission statement has

A) an employee orientation. B) a customer orientation.

C) a shareholder orientation.

D) an environmental orientation.

E) a profit orientation.: B) a customer orientation.

85. The potential for creative growth in an organization can be limited by

A) an overemphasis on stakeholders.

B) not enough emphasis on stakeholders. C) a mission statement that is too general. D) a mission statement that is too specific.

E) a mission statement that is too dynamic.: D) a mission statement that is too specific.

86. An overly general mission statement that                  could be dysfunction- al.

A) does not exclude any strategy alternatives

B) encourages management creativity

C) excludes all diversification

D) endorses the consideration of feasible potential strategies

E) allows for the generation and consideration of a range of alternative objectives: A) does not exclude any strategy alternatives

87. The general public is especially interested in                  , whereas stock- holders are more interested in                  .

A) environmental concerns; social responsibility

B) social responsibility; the treatment of employees

C) the treatment of employees; environmental concerns

D) profitability; social responsibility

E) social responsibility; profitability: E) social responsibility; profitability

88. In order to appeal to its diverse stakeholders, an effective mission state- ment should be

A) inflammatory. B) provocative. C) contentious.

D) reconciliatory.

E) dysfunctional.: D) reconciliatory.

89. In developing a mission statement, arousing emotion

A) is not a benefit. B) is futile.

C) is important.

D) should be avoided if possible.

E) is counterproductive.: C) is important.

90. According to McGinnis, a mission statement should be all of the following

EXCEPT

A) it should be broad enough to include all ventures. B) it should be stated in clear terms.

C) it should distinguish an organization from all others. D) it should define what an organization is.

E) it should serve as a framework for evaluating both current and prospective activities.: A) it should be broad enough to include all ventures.

91. An effective mission statement does all of the following EXCEPT

A) it reflects judgments about future growth directions that are based upon

forward-looking external and internal analyses.

B) it provides useful criteria for selecting among alternative strategies. C) it provides a basis for generating and screening strategic options. D) it is static in orientation.

E) it should be enduring.: D) it is static in orientation.

92. Good mission statements identify the                  of a firm's products to its customers.

A) utility

B) price

C) profit margin

D) demand

E) popularity: A) utility

93. Which of these examples of a mission statement's focus area does NOT

identify the utility of the firm's products to its customers?

A) AT&T focuses on communication rather than telephones. B) ExxonMobil focuses on oil and gas rather than energy.

C) Union Pacific focuses on transportation rather than railroads.

D) Universal Studios focuses on entertainment rather than movies.

E) A clothing retailer focuses on attractive looks rather than on clothes.: B) ExxonMobil focuses on oil and gas rather than energy.

94. All of the following utility statements are relevant in developing a mission statement EXCEPT

A) Do not offer me shoes. Offer me comfort for my feet and the pleasure of walking.

B) Do not offer me furniture. Offer me comfort and the quietness of a cozy place.

C) Do not offer me ideas, emotions, ambience, feelings, and benefits. Offer me things.

D) Do not offer me books. Offer me hours of pleasure and the benefit of knowledge.

E) Do not offer me a house. Offer me security, comfort, and a place that is clean and happy.: C) Do not offer me ideas, emotions, ambience, feelings, and benefits. Offer me things.

95. The recommended length of an effective mission statement is                                                                                                                                                                                  

words.

A) approximately 25

B) no more than 100

C) less than 250

D) at least 300

E) more than 500: C) less than 250

96. What question is asked in conjunction with the philosophy component of a mission statement?

A) What are the firm's major products or services?

B) Is the firm committed to growth and financial soundness?

C) What are the basic beliefs, values, aspirations, and ethical priorities of the firm?

D) Is the firm responsive to social, community, and environmental concerns? E) Are employees a valuable asset of the firm?: C) What are the basic beliefs, values, aspirations, and ethical priorities of the firm?

97. An effective mission statement should do all of the following EXCEPT A) include monetary amounts, numbers, percentages and ratios.

B) be inspiring.

C) reveal that the firm is environmentally responsible. D) identify the utility of a firm's products.

E) be reconciliatory.: A) include monetary amounts, numbers, percentages and ratios.

98. The following excerpt from a mission statement illustrates which of the nine essential components of a mission statement?

"We believe our first responsibility is to the doctors, nurses, patients, moth- ers, and all others who use our products and services."

A) Markets

B) Customers

C) Concern for Employees

D) Concern for Public Image

E) Technology: B) Customers

99. Which of the following illustrates the self-concept component of a mis- sion statement?

A) To earn our customer's loyalty, we listen to them, anticipate their needs, and act to create value in their eyes.

B) We are committed to leapfrogging ongoing competition within 1,000 days by unleashing the constructive and creative abilities and energies of each of our employees.

C) Our emphasis is on North American markets, although global opportuni- ties will be explored.

D) To compensate its employees with remuneration and fringe benefits competitive with other employment opportunities in its geographical area and commensurate with their contributions toward efficient corporate oper- ations.

E) In this respect, the company will conduct its operations prudently and will provide the profits and growth which will assure our ultimate success.: B) We are committed to leapfrogging ongoing competition within 1,000 days by unleashing the constructive and creative abilities and energies of each of our employees.

100. Effective mission statements can vary in

A) length. B) content. C) format.

D) specificity.

E) All of the above: E) All of the above

101. Which component of a mission statement addresses the firm's distinc- tive competence or major competitive advantage?

A) Technology

B) Philosophy

C) Concern for public image

D) Customers

E) Self-concept: E) Self-concept

102. Which component of a mission statement addresses the basic beliefs, values, aspirations, and ethical priorities of the firm?

A) Technology

B) Philosophy

C) Concern for public image

D) Customers

E) Self-concept: B) Philosophy

103. Which question(s) are answered in an effective mission statement? A) Is the firm committed to growth and financial soundness?

B) Are employees a valuable asset of the firm?

C) Geographically, where does the firm compete? D) Who are the firm's customers?

E) All of the above: E) All of the above

104. Which of the following is NOT one of the nine recommended compo- nents of a mission statement?

A) Strategies

B) Self-concept

C) Concern for employees