LA PATRIA COLLEGE

Santiago City

College of Accountancy and Management

Prelim Examination in BMEC 103
Strategic Management
October 1, 2020

General Guidelines:
a. Write your answers on a clean sheet of bond paper with your name, course and year level, prelim examination course number,
and course description. Use black ball pen in writing your answers.
Example: RUMAUAC, AIZA P. BSA 1 Prelim Examination
ACC 102 Conceptual Framework and Accounting Standards
b. After writing your answers, install the CamScanner application on your smartphone and use to capture image/s of your
answer sheet/s.
c. Send your answer sheet to the personal Microsoft Teams accounts of your instructor Ms. Aiza P. Rumauac and to Vice President
for Academic Affairs Ms. Lily Mae M. Kimayong.
d. Your answer sheet should be sent in PDF form and name your file with this format: COURSE NUMBER-PRELIM EXAMINATION
Example: ACC102-PRELIM EXAMINATION
e. Deadline of examination paper: October 2, 2020, on or before 5:30 PM. Late papers will be given deductions on percentage
score. 1:00-5:59 minutes: 3%; 6:00-10:59 minutes: 5%; 11:00- up: 7%

I. MODIFIED TRUE OR FALSE: Read the following statement and identify whether it is correct or incorrect. Write TRUE if the statement
is correct, if the statement is incorrect write FALSE and change the underlined word/s to make the statement correct. (2 points each)
1. Strategic formulation have major multifunctional consequences and enduring effects on an organization.
2. Strategy planning activities affect all employees and managers in an organization.
3. All small businesses and some large businesses do not have divisions or strategic business units and they only have corporate
and functional levels.
4. E-commerce and globalization are internal changes that are transforming business and society today.
5. Strategic management is all about gaining and maintaining competitive strength.
6. Any manager who has responsibility for a unit or division, responsibility for profit and loss outcomes, or direct authority over a
major piece of the business is a head manager.
7. A vision statement is a constant reminder to its employees of why the organization exists and what the founders envisioned when
they put their fame and fortune at risk to breathe life into their dreams.
8. Firms with strategic systems more closely resembling strategic-management theory generally exhibit superior long-term financial
performance relative to their industry.
9. The mission statement is a declaration of an organization’s “reason for being.”
10. Shared mission creates a commonality of interests that can lift workers out of the monotony of daily work and put them into a
new world of opportunity and challenge.
11. Mission statements are not designed to express concrete ends, but rather to provide motivation, general direction, an image, a
tone, and a philosophy to guide the enterprise.
12. An efficient vision statement should arouse positive feelings and emotions about an organization; it should be inspiring in the
sense that it motivates readers to action.
13. A clear mission statement provides a basis for generating and screening business decision.
14. Identifying and monitoring internal opportunities and threats enables organizations to develop a clear mission, to design strategies
to achieve long-term objectives, and to develop policies to achieve annual objectives.
15. A draft list of the most important key external factors should be communicated and distributed widely in the organization.
16. Economic factors have a parallel effect on the potential attractiveness of various strategies.
17. Global advancements can dramatically affect organizations’ products, services, markets, suppliers, distributors, competitors,
customers, manufacturing processes, marketing practices, and competitive position.
18. Compared to the external audit, the process of performing an internal audit provides more opportunity for participants to
understand how their jobs, departments, and divisions fit into the whole organization.
19. A key to organizational success is effective coordination and understanding among managers from all functional business areas.
20. The first empirical indicator that can make resources a source of competitive advantage is substitutability.
21. The strategic-management process takes place largely within a particular organization’s environment.
22. Planning helps ensure that the firm can be prepared for all reasonable eventualities and for all changes that will be needed.
23. Leadership includes developing a mission of the firm’s future and inspiring people to work hard to achieve that vision.
24. The efficiency of various selling tools for consumer and industrial products varies.
25. Governments can impose constraints on price fixing, price discrimination, minimum prices, unit pricing, price advertising, and
price controls.

II. IDENTIFICATION: Identify the word/s that described by the following statements. (1 point each)
1. This determines the best capital structure for the firm and includes examining various methods by which the firm can raise capital.
2. It is the most widely used method for determining an organization’s strengths and weaknesses in the investment, financing, and
dividend areas.
3. This should also be performed when a company is evaluating alternative ways to be socially responsible.
4. It is an activities that support all of the major business functions of an organization.
5. This becomes especially important when a firm is striving to implement a market development or forward integration strategy.
6. It is a management function that includes all of those activities undertaken to ensure that actual operations conform to planned
operations.
7. It is the lifting of a person’s vision to higher sights, the raising of a person’s performance to a higher standard, the building of a
person’s personality beyond its normal limitations.
8. Its purpose is to achieve coordinated effort by defining task and authority relationships. Organizing means determining who does
what and who reports to whom.
9. It allows a firm to adapt to changing markets and thus to shape its own destiny.
10. It captures the subtle, elusive, and largely unconscious forces that shape a workplace.
11. This approach to competitive advantage contends that internal resources are more important for a firm than external factors in
achieving and sustaining competitive advantage.
12. It is a highly interactive process that requires effective coordination among management, marketing, finance/accounting,
production/operations, R&D, and management information systems managers.
13. This may be the most important word in management.
14. It is equally applicable for strategy formulation, implementation, and evaluation decisions.
 15. This is the extent to which the type and amount of a firm’s internal resources are comparable to a rival.
16. This allows strategists to summarize and evaluate economic, social, cultural, demographic, environmental, political,
governmental, legal, technological, and competitive information.
17. It identifies a firm’s major competitors and its particular strengths and weaknesses in relation to a sample firm’s strategic position.
18. It is the third empirical indicator that can make resources a source of competitive advantage.
19. This include values, beliefs, rites, rituals, ceremonies, myths, stories, legends, sagas, language, metaphors, symbols, heroes,
and heroines.
20. It is often determined by linkages between a firm’s culture and strategies.

III. APPLICATION: Compute the financial ratios for 2018 and 2017 of the financial statements presented below. (2 points each)

A. Liquidity Analysis Ratios B. Financial Leverage Ratios C. Profitability Ratios

1. Current Ratio 4. Debt Ratio 7. Gross Profit Margin
2. Quick Ratio 5. Debt-to-Equity Ratio 8. Net Profit Margin
3. Solvency Ratio 6. Asset to Equity Ratio 9. Return on Assets
10. Return on Equity

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Prepared by: Reviewed/Approved:

AIZA P. RUMAUAC, CPA LILY MAE M. KIMAYONG, MBA

Instructor Vice President for Academic Affairs