The term information asymmetry describes the difference in personal ethics that agents
and principals have.
Few integrating mechanisms are needed when a company uses a global-area structure.
Market penetration involves the creation of new or improved products to replace
existing ones.
An advantage of unrelated diversification is that competencies can be shared and
leveraged throughout the value chain activities.
Stock-based compensation schemes for senior executives are designed to align the
interests of managers with those of stockholders.
Historically, car companies such as Ford and GM used global-area structures to manage
their overseas operations.
The final component of the strategic management process is crafting the organization’s
mission statement, which provides the framework or context within which strategies are
formulated.
When a company is trying to win a format war it should license its format for a low fee
rather than a high fee.
Information technology (IT) is playing an increasing role in strategy formulation.
However, strategy implementation is not affected by IT in general.
Mercedes-Benz automobiles are a good example of
A.moderately priced products.
B.imitative products.
C.differentiated products.
D.products that are struggling to differentiate.
E.highly competitive products.
In any organization, for-profit or not-for-profit, span of control refers to the
A.number of managers at the highest levels in the organization.
B.the CEO and his or her management team.
C.the number of subordinates who report directly to one manager.
D.the number of supervisors in a specific segment of a manufacturing activity.
E.none of these choices.
Info Tech, Inc. makes complex telecommunications products, such as cellular
telephones. Because this company has a distinctive competency in research and
development, it should try to differentiate its product through
A.reliability.
B.innovation.
C.advertising.
D.service.
E.low price.
When standards are part of the public domain, they can be used
A.only by companies in a particular industry.
B.only by federal contractors.
C.by paying a fee to the Federal Communications Commission (FCC).
D.freely by any company.
E.once without payment of a fee.
When toymaker Mattel sells Barbie dolls in the Middle East, it changes the doll’s shape
to one that is a more accurate portrayal of a female body. Mattel does this to
A.create a commodity-type product.
B.transfer technological know-how.
C.increase product standardization.
D.realize experience curve effects.
E.respond to differences in local tastes.
A shrinking market segment poses the greatest threat to a company pursuing which of
the following strategies?
A.Cost leadership
B.Differentiation
C.Focused differentiation
D.Growth
E.Both cost leadership and differentiation simultaneously
When a company expands its sales volume through international expansion, it can
realize cost savings from economies of scale through all of the following except
A.spreading fixed costs over its global sales volume.
B.utilizing its production facilities more intensely.
C.increased bargaining power with its suppliers.
D.learning effects associated with higher volume.
E.improved responsiveness.
Feelings of personal responsibility for a project are most likely to lead to
A.prior hypothesis biases.
B.escalating commitment.
C.reasoning by analogy.
D.representativeness.
E.ivory tower planning.
When decision-making responsibilities are decentralized, benefits include all of the
following except
A.increased motivation and accountability.
B.lower bureaucratic costs from flattened hierarchy.
C.reduced information overload.
D.easier coordination.
E.all of these are benefits of decentralization.
A cost-leadership strategy would be most effective with
A.output controls.
B.personal controls.
C.behavioral controls.
D.cultural controls.
E.no controls.