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Most technological developments in an industry are diffused throughout firms in that industry in a relatively brief period of time, but only if the technology in question has not been patented. Answer: The aging of the “baby boomer” generation in […]

Most accounting measures of divisional performance focus on long-term benefits and minimize the possibility of a short-term bias. Answer: In principle, only the CEO and the president report to the board of directors while other senior managers report only to […]

If a firm’s resources and capabilities are costly to imitate because imitating firms may not understand the relationship between the resources and capabilities controlled by a firm and that firm’s competitive advantage, this competitive advantage is said to be protected […]

Increased worker specialization associated with higher levels of production can lead to worker de-motivation and diseconomies of scale. Answer: While mergers typically begin as a transaction between equals, that is, between firms of equal size and profitability, they often evolve […]

When acquiring a publicly traded firm a bidder has to release all the information it has about the potential value of that target in combination with itself. Answer: To the extent that a board of directors begins to operate a […]

A(n) ________ is any individual, group, or organization outside a firm that seeks to reduce the level of that firm’s performance. A) environmental threat B) environmental opportunity C) environmental equalizer D) competitive advantage Answer: A ________ is a form of […]

Operational, functional, strategic, and cultural differences between bidding and target firms can all be compounded by the merger and acquisition process especially if that process was unfriendly. Answer: Sophisticated software can enhance the value that customers receive from a personal […]

Which of the following statements regarding competitive parity and competitive advantage is accurate? A) Some firms develop valuable, rare, and costly-to-imitate resources and capabilities in being efficient second movers, that is, in rapidly imitating and improving on the product and […]

Mergers and acquisitions designed to create vertical integration should be managed through the M-form structure. Answer: When less than 90 percent of a firm’s revenues are generated in a single product market and when a firm’s business share few, if […]

As a firm increases in size, it often increases in complexity; however, the ability of managers to control and operate the firm efficiently are virtually unlimited and therefore costs do not substantially increase. Answer: High volumes of production are also […]

Productive inputs are any supplies used by a firm in conducting its business activities. Answer: Firms selling differentiated products face a horizontal demand curve. Answer: FALSE If a resource or capability is valuable and rare but not costly to imitate, […]

________ economies are achieved by the ability of firms to dictate prices by exerting market power. A) Pecuniary B) Technical C) Diversification D) Production Answer: Sematech is a producer of computer chips. To gain an advantage over other computer chip […]

One of the most compelling reasons for firms to begin operations outside their domestic markets is to refine their current core competencies and to develop new core competencies. Answer: Learning race dynamics are particularly common in relations among large, well-established […]

The strategic management process is a sequential set of analyses and choices that can increase the likelihood that a firm will choose a good strategy that generates competitive advantages. Answer: A decision-making setting is uncertain when the future value of […]

An emerging industry is an industry in which a large number of small or medium-sized firms operate and no small set of firms has a dominant market share or creates dominant technologies. Answer: The five forces framework is based on […]

Each division in an M-form organization typically adopts a matrix structure and the division general manager takes on the role of senior project executive. Answer: A multinational strategy exploits all the advantages of both international integration and local responsiveness. Answer: […]

Learning curve-cost advantages are restricted solely to manufacturing and the advantage associated only with the manufacturing business function. Answer: Liquidity ratios are ratios that focus on the firm’s ability to meet its short-term financial obligations. Answer: TRUE More recent work […]