A “think local, act local” multidomestic strategy works particularly well in all of the
following situations, EXCEPT when there are:
A. regulations enacted by the host governments requiring that products sold locally
meet strictly defined manufacturing specifications or performance standards.
B. significant country-to-country differences in customer preferences and buying habits.
C. diverse and complicated trade restrictions of host governments preclude the use of a
uniform strategy from country-to-country.
D. significant country-to-country differences in distribution channels and marketing
methods.
E. large demands to pursue conflicting objectives simultaneously.
Transferring core competencies and resource strengths from one country market to
another is:
A. a good way for companies to develop broader or deeper competencies and
competitive capabilities that can become a strong basis for sustainable competitive
advantage.
B. best accomplished with a multidomestic strategy as opposed to a global strategy.
C. feasible only with a global strategy; it can’t be done with a multidomestic strategy.
D. unlikely to result in a competitive advantage.E. nearly always the easiest and most
sure-fire way to build competitive advantage in trying to compete successfully in
foreign markets.
Managers charged with implementing and executing strategy need to be deeply
involved in the budgeting and resource allocation process because of all the following
reasons EXCEPT:
A. too little funding deprives organizational units of the necessary resources to execute
their piece of the strategic plan while too much funding wastes organizational resources
and reduces financial performance.
B. resource allocation involves screening of requests for people, facilities and
equipment, and approving them, whether they contribute to the strategy execution effort
or not.
C. without major budget reallocations there is little chance that desired core
competencies and organizational capabilities will emerge.
D. lean, carefully managed budgets protect the company’s financial condition and
eliminate the wasteful use of cash.
E. a change in strategy nearly always calls for budget reallocations and resource
shifting.
The leadership challenges that top executives face in making corrective adjustments
when things are not going well include:
A. knowing when to replace poorly performing subordinates and when to do a better
job of coaching them to do the right things.
B. being able to discern whether to promote better achievement of strategic
performance targets or whether to promote better achievement of financial performance
targets.
C. deciding when adjustments are needed and what adjustments to make.
D. having the analytic skills to separate the problems due to a bad strategy from the
problems due to bad strategy execution.
E. deciding whether the company would be better off making adjustments that curtail
the achievement of strategic objectives or that curtail the achievement of financial
objectives.
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.
Which of the following managerial practices is NOT used to lead the effort to foster a
results-oriented, high-performance culture?
A. Using empowerment to help create a fully engaged workforce
B. Making champions out of the people who spearhead new ideas and/or turn in
winning performances
C. Celebrating individual, group, and company successes
D. Treating employees as valued partners in the drive for operating excellence and good
business performance
E. Placing a premium on not making mistakes, prompting managers to lean toward safe,
conservative options intended to maintain the status quo
Mergers and acquisitions:
A. are nearly always successful in achieving their desired purpose.
B. frequently do not produce the hoped-for outcomes.
C. are generally less effective than forming alliances or partnerships with these same
companies.
D. are highly risky because of the financial drain that comes from using the company’s
cash resources to pay for the costs of the merger or acquisition.
E. are usually more successful in achieving cost reductions than in expanding a
company’s market opportunities.
The litmus test of a company’s code of ethics is:
A. the degree to which it is connected to a company’s statement of core values.
B. the extent to which it is embraced in crafting strategy and in the day-to-day
operations of the business.
C. the extent to which a company’s approach to ethical behavior mirrors the ethical
principles for society at large.
D. based on the rules a company’s top management and board of directors make about
“what is right” and “what is wrong.”
E. determined by the ethical behaviors expected of company personnel in the course of
doing their jobs.
Corporate restructuring strategies:
A. involve making major changes in a diversified company’s business lineup, divesting
some businesses and/or acquiring others, so as to put a whole new face on the
company’s business lineup.
B. entail reducing the scope of diversification to a smaller number of businesses.
C. entail selling off marginal businesses to free up resources for redeployment to the
remaining businesses.
D. focus on crafting initiatives to restore a diversified company’s money-losing
businesses to profitability.
E. focus on broadening the scope of diversification to include a larger number of
businesses and boosting the company’s growth and profitability.
According to the ethical relativism school of thinking:
A. there can be no one-size-fits-all template (set of authentic ethical norms) against
which to gauge the conduct of company personnel, due to cross-cultural differences in
ethical standards.
B. a company should have a different set of ethical standards for each country in which
it operates.
C. only respected religious experts can provide companies with a higher order moral
compass.
D. the best source of ethical standards in each country where the company operates is
that country’s adopted Code of Required Ethical Conduct.
E. since there can be no one-size-fits-all set of authentic ethical norms, it is appropriate
for each company to hold company personnel to observing the company’s code of
ethical conduct.
Which of the following is NOT one of the managerial considerations in determining
how to compete successfully?
A. How can a company attract, keep, and please customers?
B. How can a company modify its entire product line to emphasize its internal service
attributes?
C. How should a company respond to changing economic and market conditions?
D. How should a company be competitive against rivals?
E. How should a company position itself in the marketplace?
Managerial considerations for successful strategies serve consumers better while
increasing performance. Internal attributes are modified to meet product line changes
based on changes in the market rather than vice versa.
Which of the following conditions acts to weaken buyer bargaining power?
A. When buyers are unlikely to integrate backward into the business of sellers
B. When buyers purchase the item frequently and are well-informed about sellers’
products, prices, and costs
C. When the costs incurred by buyers in switching to competing brands or to substitute
products are relatively low
D. When the products of rival sellers are weakly differentiated and buyers have
considerable discretion over whether and when they purchase the product
E. When buyers are few in number and/or often purchase in large quantities
What separates a powerful strategy from a run-of-the-mill or ineffective one is:
A. the ability of the strategy to keep the company profitable.
B. the proven ability of the strategy to generate maximum profits.
C. the speed with which it helps the company achieve its strategic vision.
D. management’s ability to forge a series of actions, both in the marketplace and
internally, that sets the company apart from rivals, and produces sustainable competitive
advantage.E. whether it allows the company to maximize shareholder value in the
shortest possible time.
Diversification becomes a relevant strategic option for a company EXCEPT when it:
A. spots opportunities to expand into industries whose technologies and products
complement its present business.
B. leverages existing resources and capabilities by expanding into industries where
these same resource strengths are key success factors and valuable competitive assets.
C. has a powerful and well-known brand name that can be transferred to the products of
other businesses and thereby used as a lever for driving up the sales and profits of such
businesses.
D. can open up new avenues for reducing costs by diversifying into closely related
businesses.
E. expands into additional businesses that unlock possibilities for a comprehensive cost
enhancement strategy.
Which of the following regarding integrated social contracts theory is NOT true?
A. Certain universal ethical principles apply in those situations where all societies-those
endowed with rationality and moral knowledge-have 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.
The two biggest drawbacks or disadvantages of unrelated diversification are:
A. underemphasizing the importance of resource fit and the strong likelihood of
diversifying into businesses that top management does not know all that much about.
B. insufficient cash flows to finance so many different lines of business and a lack of
uniformity among the strategies of the businesses it has diversified into.
C. volatile sales and profits and making the mistake of diversifying into too many cash
cow businesses.
D. the difficulties of competently managing many different businesses and being
without the added source of competitive advantage that cross-business strategic fit
provides.
E. over-investing in the achievement of economies of scope and the difficulties of
achieving a good mix of cash cow and cash hog businesses.