Corporate governance mechanisms are designed to ensure that top managers make
strategic decisions that best serve the interests of the entire group of stakeholders.
a. True
b. False
According to the five forces model, an attractive industry would have all of the
following characteristics EXCEPT
a. low barriers to entry.
b. suppliers and buyers with little bargaining power.
c. a moderate degree of rivalry among competitors.
d. few good product substitutes.
Golden parachutes protect managers from the negative consequences of
over-diversifying a firm.
a. True
b. False
A veterinary practice has added a pet boarding and grooming facility. Most of the
practice’s competitors also provide these services. The veterinary practice is gaining
competitive
a. advantage.
b. parity.
c. disadvantage.
d. neutrality.
Internal labor markets consist of the career opportunities for managers within the firm
for which they currently work.
a. True
b. False
How is consolidation among fuel providers serving airport facilities viewed in the five
forces model of competition?
a. as a reduction of the airlines’ ability to benefit from economies of scale.
b. as an increase in switching costs because the airlines have no choice but to use jet
fuel and other oil products.
c. as an increase in the bargaining power of suppliers of a critical input.
d. as an increase in the intensity of rivalry among airlines for scarce resources.
Walmart uses core competencies such as information technology and distribution
channels to create value for its customers through its “everyday low prices.”
a. True
b. False
Which of the following is NOT a disadvantage associated with exporting?
a. potential loss of proprietary technologies
b. high transportation costs
c. loss of control over distribution activities
d. tariffs imposed by local governments
Competitive dynamics refers to the
a. circumstances in which competitors are aware of the degree of their mutual
interdependence resulting from market commonality and resource similarity.
b. set of competitive actions and competitive responses the firm takes to build or defend
its competitive advantages and to improve its market position.
c. total set of actions and responses taken by all firms competing within a market.
d. ongoing set of competitive actions and competitive responses between competitors as
they maneuver for advantageous market position.
Strategic alliances have become the cornerstone of many firms’ competitive strategy,
particularly large global competitors.
a. True
b. False
Market power is derived primarily from the
a. core competencies of the firm.
b. size of a firm and its resources and capabilities.
c. quality of a firm’s top management team.
d. depth of a firm’s strategy.
Organizational culture is a complex set of ideologies, symbols, and core values that are
shared throughout the firm, but its development is so subtle and poorly understood that
top managers cannot influence its content.
a. True
b. False