One advantage of a joint venture is that a company may benefit from a local partner’s
knowledge of the many dimensions of a host country.
In 1995, Dell Computer changed its organization structure from a market structure to a
functional structure and created separate divisions. This change would better serve its
different groups of customers.
Employee productivity is a common measure of efficiency.
A joint venture allows a company to share the risks and costs associated with
establishing a new business unit with another company.
Even if they are constrained by a lack of capital, research shows that new entrants
should avoid partnering with a larger company and go it alone.
Imitating a company’s capabilities tends to be more difficult than imitating its tangible
and intangible resources.
Although important, unfortunately, innovation plays a minor role in achieving
competitive advantage.
Flexible manufacturing technologies enable companies to produce small batches of
high-quality customized products at a cost that, at one time, could be achieved only
through mass production.
The challenge for a company’s human resource function is to find ways to lower wage
and benefits costs.
A benefit of long-time customer loyalty is the free advertising that customers provide
for a company through referrals.
The most successful firms are those that constantly learn and upgrade their distinctive
competencies.
A firm that is pursuing a globalization strategy will typically use a global-area structure.
Unfortunately, different divisions in a firm with a Multidivisional structure are not
given authority to adopt their own organizational structures.
Control through organizational culture
A.is less expensive than output control.
B.reduces mutual adjustment.
C.involves employees internalizing the norms and values of the organization.
D.includes setting individual goals.
E.reduces mutual adjustment and includes setting individual goals.
Which of the following economic benefits result from the use of standards?
A.Compatibility
B.Reduction in confusion
C.Reduction in production costs
D.Reduction of risk in supplying complementary products
E.All of these
The marketing strategy that a company adopts
A.has little impact on a company’s efficiency and cost structure.
B.has an effect on efficiency and cost structure, but the extent of this effect cannot be
determined.
C.should not take into account the impact the strategy has on efficiency or cost
structure.
D.can have a major impact on efficiency and cost structure.
E.none of these choices
Which of the following is required by a restructuring?
A.Eliminating business units
B.Rethinking business processes
C.Creating more business units
D.Flattening the organizational hierarchy
E.Broadening the span of control
A company pursuing a cost-leadership strategy does which of the following?
A.Includes substandard components in the product to keep costs low
B.Chooses strategies that keep costs as low as feasible and are effective
C.Keeps advertising expenses at a maximum
D.Relies on patent protections to keep costs low
E.None of these
What is the impact of shifting industry boundaries on firms within the industry?
A.Higher exit barriers
B.More competitors
C.Reduced threat of substitutes
D.Greater bargaining power of suppliers
E.Lesser bargaining power of buyers
Which of the following strategies helps companies with high cost structures, allowing
them to survive without having to implement strategies to become more productive and
efficient?
A.Price signaling
B.Nonprice competition
C.Capacity control
D.Market development
E.Price leadership
To compete in the fragmented restaurant industry, Red Lobster Corporation built and
now operates hundreds of stores across the United States and Canada. Red Lobster is
using which type of strategy?
A.Acquisitions
B.Horizontal mergers
C.Franchising
D.Diversification
E.Chaining
Which of the following factors increases pressures for cost reductions?
A.Differences in distribution channels
B.Increasing national wealth
C.Great transportation needs
D.High switching costs
E.Price as the main competitive weapon in a market
A strategic group is a group of companies within a particular industry
A.with the same overhead costs.
B.with the same cost structure.
C.that are pursuing a similar business model.
D.that are using the same suppliers.
E.all of these choices.
Sarbanes-Oxley, federal legislation enacted in 2002, requires
A.CEOs to endorse their company’s financial statements.
B.CFOs to endorse their company’s financial statements.
C.companies to use the same accounting firm for auditing and consulting services.
D.members of the board of directors to post a surety bond.
E.CEOs and CFOs to endorse their company’s financial statements.
Diversification may dissipate value if it is wrongly based on
A.realizing economies of scope.
B.pooling risks.
C.transferring competencies.
D.acquisitions and restructuring.
E.leveraging existing competencies.
In which of the following situations does a differentiation strategy make the most
sense?
A.The industry is fragmented into different customer groups, each of which has
different needs.
B.Customer needs are primarily satisfied by the price of the product.
C.There is a lot of technological change.
D.There are low barriers to entry and exit.
E.The industry is in the maturity stage of the life cycle.
Which of the following dimension(s) is (are) encompassed by a company’s business
model?
A.Selecting customers
B.Defining and differentiating its product offerings
C.Determining how it will produce goods and services
D.Determining how it will grow the business over time
E.All of these.
Which of the following structures requires centralization of value chain support
activities?
A.The product structure
B.The product team structure
C.The matrix structure
D.The product and product team structures
E.The matrix and product team structures
Problems in effectively managing the multidivisional structure include
A.distortion of information.
B.competition for resources.
C.transfer pricing.
D.all of these.
E.none of these.
A company’s infrastructure includes the company’s
A.organization structure, culture, and style of leadership.
B.organization structure and morale level.
C.culture and productivity levels.
D.overall profitability levels.
E.short-run objectives.
Strategy formulation refers to the
A.task of designing organizational structures and control systems.
B.process by which strategies are put into action.
C.top-down planning process that gives rise to the implementation of emergent
strategies.
D.task of analyzing an organization’s external and internal environment and then
selecting an appropriate strategy.
E.process of choosing a realized strategy.
In which of the following circumstances does a localization strategy make the most
sense?
A.Global market standardization is not possible, and there are no significant economies
of scale to be realized from centralizing global manufacturing.
B.Global market standardization is possible, but there are no significant economies of
scale to be realized from centralizing global manufacturing.
C.Global market standardization is not possible, but there are significant economies of
scale to be realized from centralizing global manufacturing.
D.Global market standardization is possible, and there are significant economies of
scale to be realized from centralizing global manufacturing.
E.Consumer tastes and preferences differ among national markets, and economies of
scale are substantial.
Becca is a CEO at XYZ Company. She has recently invested corporate funds to take an
exotic trip to the Cayman Islands. This is an example of which of the following?
A.Corporate governance
B.On-the-job consumption
C.Self-dealing
D.Anticompetitive behavior
E.Information manipulation