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WorksheetsStrategic Choice
Total questions: 61
Worksheet time: 32mins
Which model is this?
Ansoff Matrix
Targeting
Positioning
Market Development
New market, New Product
Same market, new product
New market, same product
Same market, same product
A decision tree uses _________ to calculate likely outcomes.
stakeholder information
facts and statistics
estimates and probabilities
shareholder data
A decision tree helps to decide whether the _____from a decision is worthwhile.
net gain
net present value
payback period
future value of cash
A decision tree starts with a ____ to be made and the options that can be taken.
dividend
decision
net present value assumption
payback period estimate
Don't forget that there is always an option to decide _____.
to choose the project that is not worthwhile
to add further options
to choose both options
to do nothing!
Net gain is calculated by _____ the expected value of each outcome and deducting the costs associated with the decision.
deducting
adding together
multiplying
dividing
BENEFITS OF USING DECISION TREES include:
Uses quantitative data only – ignores qualitative aspects of decisions
It is based on assumptions and estimates
Choices are set out in a logical way
Assignment of probabilities and expected values prone to bias
BENEFITS OF USING DECISION TREES include:
Decision-making technique doesn’t necessarily reduce the amount of risk
Uses quantitative data only – ignores qualitative aspects of decisions
Probabilities are just estimates – always prone to error
Potential options & choices are considered at the same time
BENEFITS OF USING DECISION TREES include:
Probabilities are just estimates – always prone to error
Use of probabilities enables the “risk” of the options to be addressed
Uses quantitative data only – ignores qualitative aspects of decisions
Assignment of probabilities and expected values prone to bias
BENEFITS OF USING DECISION TREES include:
Likely costs are considered as well as potential benefits
Probabilities are just estimates – always prone to error
Uses quantitative data only – ignores qualitative aspects of decisions
Assignment of probabilities and expected values prone to bias
BENEFITS OF USING DECISION TREES include:
Probabilities are just estimates – always prone to error
Assignment of probabilities and expected values prone to bias
Easy to understand & tangible results
Decision-making technique doesn’t necessarily reduce the amount of risk
DRAWBACKS OF USING DECISION TREES include:
Probabilities are just estimates – always prone to error
Choices are set out in a logical way
Potential options & choices are considered at the same time
Use of probabilities enables the “risk” of the options to be addressed
DRAWBACKS OF USING DECISION TREES include:
Likely costs are considered as well as potential benefits
Use of probabilities enables the “risk” of the options to be addressed
Uses quantitative data only – ignores qualitative aspects of decisions
Easy to understand & tangible results
DRAWBACKS OF USING DECISION TREES include:
Use of probabilities enables the “risk” of the options to be addressed
Potential options & choices are considered at the same time
Easy to understand & tangible results
Assignment of probabilities and expected values prone to bias
DRAWBACKS OF USING DECISION TREES include:
Likely costs are considered as well as potential benefits
Easy to understand & tangible results
Decision-making technique doesn’t necessarily reduce the amount of risk
It is a mathematical model used to help managers make decisions.
An advantage of Force Field Analysis is
summarises the information in the information gathering stage
Lacks precision
Highlights Drivers and Resisitants
Can't be used with a SWOT analysis
Which are possible drivers that could be included
Customer Demand
Global market
Fear of Failure
All of the above
Which are possible resistors to an organisation?
Loss of Status
New technology opportunities
Fear of the unknown
All of the above
ANALYSIS: In which incident would you apply the force-field analysis?
When you would like to know more about the business it self.
When making decision, particularly when implementing change.
When the workers in the business do not get along
(a) created the force field analysis
Forces that block drivers of change are called...
Resisting forces
Restraining forces
Restricting forces
Repelling forces
Refusing forces
Lewin’s Force Field Analysis attempts to identify and evaluate:
Internal and external forces for change
Strengths and weaknesses creating change
Reasons why change will be successful, or not
Driving and restraining forces for change
The quantitative techniques used to calculate the financial costs and benefits in investments?
Investment Appraisal
Cash Flow Forecast
Profit
Investment
To calculate the remaining months, which calculation for Payback is correct?
Payback in months = (Income required to reach payback / Income generated in the payback year) ×12
Payback in years = (Income required to reach profit / Income generated in the payback month) ×12
Payback in months = (Costs in payback year / Income generated in the payback year) ×12
Payback in years = (Costs in payback month / Costs generated in the payback year) ×12
The following are all methods of investment appraisal, EXCEPT
Payback period
Net present value using discounted cash flows
Average rate of return
Balance sheet return
The initial investment is 5,000. In the first year the firm paid back 1,000 in the second year 2,000 and the third year 3,000. Calculate the payback period
2 years
3 years
3 years 4 months
2 years 8 months
The NPV method discounts shrinks...
the future inflows into present values by multiplying them by a set of cost factors
the future inflows into present values by dividing them by a set of discounting factors
the future outflows into present values by multiplying them by a set of discounting factors
the future inflows into present values by multiplying them by a set of discounting factors
Disadvantages of NPV are...
Predicting the likely future inflation level can be difficult
NPV makes the opportunity cost of different projects very unclear
NPV does not take into consideration the impact of inflation on the value of money over a time period
Deciding on an appropriate discounting factor is complex
Calculate the ARR.
Initial investment is £12m.
£17.2
£16.5
£17.5
£21.4
What are the total variable costs if output is zero?
Equal to contribution per unit.
Zero
Equal to fixed costs.
Equal to selling price per unit.
What is the correct definition of the break even point?
The point at which sales revenue = fixed costs
The difference between selling price and the total variable costs
The revenue gained from selling every unit of output made
The total sales needed to cover the total costs of the business
Total contribution = ?
Total sales less total variable costs
Total sales less fixed costs
Variable costs less fixed costs
Total selling price less fixed costs.
When does the break-even point fall?
When fixed costs rise
When depreciation increases
When the selling price decreases
When fixed cost fall.
Use these figures to calculate profit: fixed costs $ 14,750, SP $ 9 per unit: VC per unit $ 4; Units made and sold 3,500.
$ 16,750
- $ 750
$ 2,750
- $ 2,750
What happens to fixed costs if there is a decrease in contribution per unit?
Fixed costs decreases
The margin of safety falls
Fixed costs increases
No-change fixed costs are not affected.
Bart is planning on opening an ice cream parlour. After carrying out some research a friend has presented him with a break-even chart but he is unsure of what it means.
He has asked you to show him where the break-even point is.
1
2
3
4
Margin of safety is?
Actual sales - break-even sales
Fixed costs - selling price
Actual sales + break-even sales
Actual sales - Fixed costs
What is meant if we say "break-even is 54 units"?
If we sell 55 units we aren't making a profit
If we sell 54 units we begin to make a profit
If we sell 55 units we begin to make a profit
If we sell 54 units we are not yet at break-even point
What is the break-even point in units for a company whose total fixed costs are £275,450; selling price per unit is £16; and variable cost per unit is £14.75?
220,360
150,300
183,633
£220,360
SWOT Analysis consists of what?
Internal factor (Strengths, Threats)
External factor (Threats, Opportunities)
External factor (Weaknesses, Threats)
Internal factor (Strengths, Weaknesses)
What type of organizational structure promotes specialization of labor and allows rapid decision making?
Divisional structure by product
Functional structure
Divisional structure by customer
Matrix structure
A matrix structure brings together people from different parts of the organization to work as cross-functional teams.
true
false
"________________ is a plan of action or policy designed to achieve a major or overall aim"-
Strategy
Objectives
Strategy is ____________ oriented.
future
past
present
___________________ is the stream of decisions and actions which lead to the development of an effective strategy or strategies to achieve corporate objectives.
Human Resource Management
Strategic Management
Financial Management
Strategies in an organisation are formulated by ______________________ management.
Middle-level management
Lower level management
Top-level management
Strategic management considers _________________ term horizon.
Long
short
meduim
A narrow span of control is one that encompasses many people.
TRUE
FALSE
The _____ refers to the number of subordinates that a manager directs.
A. span of control
B. unity of command
C. chain of command
D. decentralization principle
Splitting the workers into divisions ensures that...
can achieve greater efficiency and higher output.
can achieve a happier workforce
can create a better output but at a slower rate
can answer multiple queries
A matrix structure gives more of what to it's employees?
productivity
ability
pay
responsibility
A flat structure means that there is better what?
employees
rules
communication
ability
What is an organisational structure?
A formal document for employees to discuss with colleagues
A structured method of understanding who completes projects
A way that organisational activities are divided, organised and communicated
A communication strategy issued by the company
What is a disadvantage of hierarchical organisational structures?
demotivates staff
it is not clear who employees report to
does not define authority levels
can slow down decision making
The more layers of management you have, the easier communication is?
True
False
What is meant by centralised authority?
Authority is central to productivity
All staff contribute to decision making
Department heads can make their own decisions
Decision making is in the hands of a small group of senior management and the CEO
What is a matrix structure?
a structure without managers
A structure that has both horizontal and vertical workflows and communications
Staff work in project groups
Work is outsourced to save money
Which industrialist came up with Scientific management theory?
Weber
Mayo
Johnson
Taylor
Human relations theory states that
Productivity levels depend on the individuals social and psychological needs
People will be more motivated if they have incentives
There is one best way to achieve efficiency when completing a task
Workers will be more productive with better lighting
