The essence of socially responsible business behavior is that a company:
A. should balance strategic actions to benefit shareholders against the duty to be a good
corporate citizen.
B. undertake actions that add value to shareholders.
C. respect societal expectations that shareholders should be rewarded for providing risk
capital.
D. should work toward shareholders’ expectations of maximum return.
E. should provide jobs to the local community rather than outsourcing them.
Answer:
Leading the drive for good strategy execution and operating excellence calls upon
senior executives to:
A. be very personable, effective communicators, and skilled in the empowerment of
company personnel.
B. personally lead the implementation process and drive the pace of progress.
C. delegate little to subordinates and, instead, personally exert a strong, highly visible
influence on the company’s approaches to strategy execution.
D. be creative in establishing policies and procedures that will instill high standards of
operating excellence.
E. be charismatic, decisive decision-makers, and make inspiring speeches at company
events.
Answer:
A “balanced scorecard” for measuring company performance:
A. entails putting equal emphasis on financial and strategic objectives.
B. entails putting balanced emphasis on profit and non-profit objectives.
C. prevents the drive for achieving financial objectives from overwhelming the pursuit
of strategic objectives.
D. prevents the drive for achieving strategic objectives from overwhelming the pursuit
of financial objectives.
E. strikes a “balance” between financial and strategic objectives.
Answer:
Which of the following regarding integrated social contracts theory is NOT true?
A. Certain universal ethical principles apply in those situations where all societiesthose
endowed with rationality and moral knowledgehave a common moral agreement on
what is right and wrong.
B. Within the boundaries of a social contract, local cultures or groups can specify what
additional actions may or may not be ethically permissible.
C. Universal ethical principles or norms leave some “moral free space” for the people in
a particular country (or local culture or even a company) to make specific
interpretations of what other actions may or may not be permissible within the bounds
defined by universal ethical principles.
D. Universal ethical norms always take precedence over local ethical norms.
E. Local ethical norms always take precedence over universal ethical norms.
Answer:
Ethical principles as they apply to the conduct of personnel and business decisions:
A. deal chiefly with standards a company has about what is right and wrong insofar as
the conduct of its business is concerned and about what behaviors are expected of
company personnel.
B. deal chiefly with the behaviors that a company’s board of directors expects of all
company personnel in both their conduct on the job and off the job.
C. involve the rules a company’s top management and board of directors make about
“what is right” and “what is wrong.”
D. deal primarily with the company’s duty to comply with legal requirements and
conform to ethical norms of society, in general.
E. are generally less stringent than the ethical principles for society at large because it is
well understood that businesses should not be expected to operate any differently than
what the law requires of them.
Answer:
The “driving forces” in an industry:
A. are usually triggered by changing technology or stronger learning/experience curve
effects.
B. usually are spawned by growing demand for the product, the outbreak of
price-cutting, and big reductions in entry barriers.
C. are major underlying causes of changing industry and competitive conditions and
have the biggest influences in reshaping the industry landscape and altering competitive
conditions.
D. appear when an industry begins to mature but are seldom present during early stages
of the industry life cycle.
E. are usually triggered by shifting buyer needs and expectations or by the appearance
of new substitute products.
Answer:
Management’s blueprint for how and why the company’s business approaches will
generate revenues sufficient to cover costs and produce attractive profits and returns on
investment:
A. best describes what is meant by a company’s strategy.
B. best describes what is meant by a company’s business model.
C. accounts for why a company’s financial objectives are at the stated level.
D. portrays the essence of a company’s business purpose or mission.
E. is what is meant by the term strategic intent.
Answer:
Mergers and acquisitions are often driven by such strategic objectives as:
A. expanding a company’s geographic coverage or extending its business into new
product categories.
B. reducing the number of industry key success factors.
C. reducing the number of strategic groups in the industry.
D. facilitating a company’s shift from a low-cost leadership strategy to a focused
low-cost strategy.
E. lengthening a company’s value chain and thereby putting it in a better position to
deliver superior value to buyers.
Answer:
Which of the prime examples of strategic fit opportunities below are NOT related
business activities?
A. Transferring specialized expertise, technological know-how, or other valuable
resources and capabilities from one business’s value chain to another’s
B. Cost sharing between businesses by combining their related value chain activities
into a single operation
C. Overhauling and streamlining the operations of the business by refocusing value
chain activities toward businesses that can provide a superior job of parenting
D. Exploiting common use of a well-known brand name
E. Sharing other resources (besides brands) that support corresponding value chain
activities across businesses
Answer:
A global strategy is one in which a company performs all of the following tasks,
EXCEPT:
A. employs the same basic competitive approach in all countries where it operates.
B. sells much of the same products everywhere.
C. strives to build global brands.
D. coordinates its actions worldwide with strong headquarters control represents a
think-global, act-global approach.
E. uses local brand names to cater to a country’s specific needs.
Answer:
Which of the following airlines does NOT employ a low-cost provider strategy?
A. Airline 1 offers low prices on short-distance flights and cuts down on meals during
flights.
B. Airline 2 offers low prices on long-distance flights and has long service times for its
planes between flights.
C. Airline 3 offers low prices on short-distance flights and improves flight carrier
capacity through addition of seats by reducing distance between existing seats.
D. Airline 4 offers low prices on short-distance flights and pays minimum wage rates to
the flight crew.
E. Airline 5 offers low prices on long-distance flights and charges fees for carry-on as
well as checked luggage.
Answer:
The chief purpose of calculating quantitative industry attractiveness scores for each
industry a company has diversified into is to:
A. determine which industry is the biggest and fastest growing.
B. get in position to rank the industries from most competitive to least competitive.
C. provide a basis for drawing analysis-based conclusions about the attractiveness of
the industries a company has diversified into, both individually and as a group, and
further to provide an indication of which industries offer the best and worst long-term
prospects.
D. ascertain which industries have the easiest-to-achieve key success factors.
E. rank the attractiveness of the various industry value chains from best to worst.
Answer:
The market opportunities most relevant to a particular company are those that:
A. offer the best prospects for growth and profitability.
B. provide a strong defense against threats to the company’s profitability.
C. embrace the most potential for product innovation.
D. provide avenues for taking market share away from close rivals.
E. hold the most potential to reduce costs.
Answer:
A portfolio approach to managing a company’s financial resource fit is based on:
A. diversifying risk across a broad spectrum of businesses.
B. the risk/reward concept of financial analysis.
C. the fact that different businesses have different cash flow and investment
characteristics.
D. acknowledging that each business unit has varying degrees of opportunity.
E. acknowledging that each business is financially strong.
Answer:
Well-conceived policies and operating procedures facilitate strategy execution in all of
the following ways EXCEPT they:
A. provide top-down guidance regarding how things are to be done.
B. help ensure consistency in how execution-critical activities are performed.
C. promote the creation of a work climate that facilitates good strategy execution.
D. facilitate cost cutting (finding ways to do less with less) while undertaking new
strategic initiatives.
E. channel individual and group efforts along a strategy-supportive path.
Answer:
Which of the following is NOT a key question that senior executives must ask
whenever a new strategic initiative is under review?
A. Would the potential outcome of the proposed action pose a risk of embarrassment?
B. Is what we are proposing to do fully compliant with our code of ethical conduct?
C. Is there anything in the proposed action that could be considered ethically
objectionable?
D. Is it apparent that this proposed action is in harmony with our core values?
E. Are any conflicts or concerns evident between the proposed action and our core
values?
Answer:
What makes the managerial task of executing strategy so challenging and demanding is:
A. the trial-and-error experimentation that is required to come up with a workable
organizational structure.
B. the people-management skills required, the resistance to change that has to be
overcome, and the perseverance necessary to get a variety of initiatives launched and
kept moving along.
C. the time and effort it takes to build core competencies.
D. the time, training, and creative effort it takes to empower employees and teach them
responsible decision making.
E. the supervisory requirements associated with getting company personnel to do things
the right way.
Answer:
To build a total quality culture and achieve full value from the use of TQM or Six
Sigma initiatives, managers can take such action steps as:
A. signaling unequivocal and unyielding commitment to total quality, continuous
improvement, and operating excellence; encouraging quality-supportive behaviors on
the part of employees, empowering employees to make changes to improve quality; and
using online systems to give employees immediate access to best practice information
and experiences.
B. requiring all company personnel to attend Six Sigma training programs and achieve
“black belt” status.
C. instituting greater centralization of decision making to help enforce strict compliance
with quality control policies and procedures.
D. stressing 100 percent accurate individual performance rather than group or team
performance.
E. dismissing employees who repeatedly fail to achieve 100percent accuracy in their
work after a 12-month trial period.
Answer:
Industry conditions change because of:
A. such powerful driving forces as swings in buyer demand, changing interest rates, ups
and downs in the economy, and higher/lower entry barriers.
B. newly emerging industry threats and industry opportunities that alter the composition
of the industry’s strategic groups.
C. newly emerging industry key success factors.
D. important forces enticing or pressuring certain industry participants (competitors,
customers, suppliers) to alter their actions in important ways.
E. changes in the barriers to entry and the degree of competition from substitute
products.
Answer:
The task of top executives in making corrective adjustments includes:
A. knowing when to continue with the present corporate culture and when to shift to a
different and better corporate culture.
B. being good at figuring out whether to arrive at decisions quickly or slowly in
choosing among the various alternative adjustments.
C. thoroughly analyzing the situation and exercising good business judgment in
deciding what actions to take.
D. deciding whether to try to fix the problems of poor strategy execution or simply shift
to a strategy that is easier to execute correctly.
E. deciding how to identify the problems that need fixing.
Answer:
How are a company’s organizational capabilities developed and enabled?
A. By strengthening the traditions that company executives are committed to
maintaining
B. Through deployment of a company’s resources or some combination of its resources
C. By talking openly about the problems of the present company and determining how
new behaviors will improve performance
D. By shifting from decentralized to centralized decision-making
E. By urging company personnel to search outside the company for work practices and
operating approaches that may be an improvement over what the company is presently
doing
Answer:
The first principle in designing an effective compensation system and the most
dependable way to keep people focused on strategy execution and the achievement of
performance targets is to:
A. establish ethical compensation policies and convince employees that they are the
firm’s most valuable competitive asset.
B. design monetary and nonmonetary incentives that boost labor productivity and help
lower the firm’s overall labor costs.
C. generously reward and recognize people who meet or beat performance targets and
to deny rewards and recognition to those who don’t.
D. pay employees a bonus for each strategic and financial objective that the company
achieves.
E. allow employees to propose what rewards they would like to receive to achieve the
company’s stretch objectives.
Answer:
Activity-based costing:
A. is an accounting system that assigns a company’s expenses to whichever activity in a
company’s value chain is responsible for creating the cost.
B. involves using benchmarking techniques to develop cost estimates for the value
chain activities of each major rival.
C. is a powerful tool for identifying the different pieces of a company’s value chain and
classifying them as primary activities and support activities.
D. involves determining which value chain activities represent variable costs and which
represent fixed costs.
E. is a tool for identifying the activities that cause a company’s product to be strongly
differentiated from the products of rivals.
Answer:
Which of the following is NOT one of the five typical sources of competitive pressures?
A. The power and influence of industry driving forces
B. The bargaining power of suppliers and seller”supplier collaboration
C. The threat of new entrants into the market
D. The attempts of companies in other industries to win customers over to their own
substitute products
E. The market maneuvering and jockeying for buyer patronage that goes on among rival
sellers in the industry
Answer:
The approach to identifying the items needed to be placed on management’s action
agenda of the strategy execution plan always involves:
A. generalized activities that will underscore the particulars of the company’s situation.
B. some definitive managerial recipe for successful strategy execution that works for all
company situations and all types of strategies, or that works for all types of managers.
C. a set of unimportant managerial tasks that must be covered no matter what the
circumstances.
D. senior management’s judgment about how to proceed in light of prevailing
circumstances.
E. a high-end differentiation strategy for proficient implementation and execution.
Answer:
The value of doing competitive strength assessment is to:
A. determine how competitively powerful the company’s core competencies are.
B. learn if the company’s market opportunities are better than those of its rivals.
C. learn whether a company has a distinctive competence.
D. learn how the company ranks relative to rivals on each of the important factors that
determine market success and ascertain whether the company has a net competitive
advantage or disadvantage vis–vis key rivals.
E. determine whether a company’s resource strengths are sufficient to allow it to earn
bigger profits than rivals.
Answer:
An organic foods manufacturer insists on portraying the cleanliness of its farms in its
advertisements, charges a higher price for its products, and sells its products only
through reputable distributors. What strategy is the manufacturer using to deliver
superior value to customers?
A. Signaling the value of the company’s product offering to buyers
B. Incorporating intangible features
C. Incorporating tangible features
D. Lowering the buyer’s overall cost
E. Lowering the overall bargaining power from suppliers
Answer:
Prescribing policies and operating procedures aids the task of implementing strategy by:
A. helping ensure that worker eligibility for incentive bonuses is measured consistently
and awarded fairly.
B. fostering the use of best practices, TQM, Six Sigma, and continuous improvement
efforts.
C. acting as a powerful lever for changing employee attitudes about the need for a
different incentive and reward system.
D. helping build employee commitment to strengthening the company’s core
competencies and competitive capabilities.
E. placing limits on ineffective independent action and channelling efforts of
individuals along a path more conducive to good strategy execution and operating
excellence.
Answer:
Which of the following firms uses a deliberate strategy?
A. A popular downtown theater that has been staging plays decides to begin booking
rock and roll acts.
B. An airline company cuts frills in order to cope with increasing fuel prices.
C. An IT firm trims jobs during a recession.
D. A smartphone company divests its tablet production branch after not gaining market
share.
E. An online jewelry site discontinues its line of turquoise rings due to lack of demand.
Answer:
A much-used and potent managerial tool for determining whether a company performs
particular functions or activities in a manner that represents “the best practice” when
both cost and effectiveness are taken into account is:
A. competitive strength analysis.
B. activity-based costing.
C. resource cost mapping.
D. SWOT analysis.
E. benchmarking.
Answer:
A company’s strategy is NOT concerned with management’s choices about how to:
A. attract and please customers.
B. stake out the same market position as successful rival companies.
C. grow the business.
D. compete successfully.
E. conduct operations and improve the company’s financial and market performance.
Answer:
Focused strategies keyed either to low cost or differentiation are especially appropriate
for situations where:
A. the market is composed of distinctly different buyer groups who have different needs
or use the product in different ways.
B. most other rival firms are using a best-cost producer strategy.
C. buyers have strong bargaining power and entry barriers are low.
D. most industry rivals have weakly differentiated products.
E. most industry participants are also using a focused differentiation strategy.
Answer:
A government oil company is having trouble with the private refineries and transporters
to whom it delegates important stages of production. It decides to become more active
along the entire supply chain from locating deposits to retailing the fuel to consumers.
Which of the following does it intend to achieve?
A. Outsourcing
B. Economies of scale
C. Increase inputs
D. Advanced production technology
E. Vertical integration
Answer:
How do ethical principles apply to businesses?
A. They chiefly deal with the actions and behaviors required to operate companies in a
socially responsible manner.
B. They chiefly deal with the rules each company’s top management and board of
directors make about “what is right” and “what is wrong.”
C. They are not materially different from ethical principles in general.
D. They are generally less stringent than the ethical principles for society at large.
E. They are generally more stringent than the ethical principles for society at large.
Answer:
The diamond framework is NOT LIKELY to answer which of the following questions
about competing on an international basis?
A. Where will the foreign entrants come from?
B. Which countries have the weakest foreign rivals?
C. What are the attributes of a country’s business environment?
D. What location of value chain activities is most beneficial?
E. What are the disadvantages of allowing foreign competition?
Answer:
Briefly discuss when it makes good strategic sense for a company to consider
diversification.
Answer:
What are the general strategic objectives of merger and acquisition strategies?
Answer:
Identify and briefly discuss four disadvantages of a vertical integration system.
Answer:
What are the keys to sustaining a focused low-cost strategy?
Answer:
Identify and briefly discuss three factors a company must consider in order to capture
the benefits of engaging in strategic alliances.
Answer:
Explain how the keys to sustaining a broad differentiation strategy differ from the keys
to sustaining a best-cost producer strategy.
Answer:
Identify three conditions that tend to make potential entry a strong competitive force.
Answer:
What is the difference between a mission statement and a strategic vision?
Answer:
Compare and contrast the advantages for entering and competing in foreign markets for
the strategic options of exporting, licensing, and franchising.
Answer:
Why does a company’s strategy tend to evolve over time?
Answer:
Identify four factors that affect whether an industry does or does not present a company
with a good business opportunity.
Answer:
Identify the three types of business costs of ethical failures. Provide examples for each
type of cost.
Answer:
One of the big dangers in crafting a competitive strategy is that managers, torn between
the pros and cons of the various generic strategies, will opt for “stuck in the middle”
strategies that represent compromises between lower costs and greater differentiation
and between broad and narrow market appeal. True or false? Explain your answer.
Answer:
What does a company racing to stake out a strong position in an industry of the future
need strategic alliances for?
Answer:
A pizza maker manufactures thin-crust pizzas and offers free soft drinks with a pack of
four pan pizzas. What can you say about its Value-Price-Cost Framework?
Answer:
Identify and briefly discuss the three common approaches to building core
competencies and competitive capabilities.
Answer:
A company’s strategy represents a managerial commitment to an integrated array of
considered choices about how to compete. This includes the choice about how to
capitalize on attractive opportunities to grow the business. Why is opportunity
recognition a vital component of the company’s strategy?
Answer:
Focusing jobholders’ attention and energy on what to do as opposed to what to achieve
makes the work environment results-oriented. True or false? Explain your answer.
Answer: