Which of the following takes the route of business process reengineering to attain
operational excellence?
A. AT&T works toward creating a total quality culture by continuously reviewing the
performance of every value chain activity.
B. Acer Phones uses advanced statistical methods to remove the causes of defects at its
manufacturing units.
C. Ericsson introduces continuous-improvement business philosophy at its customer
care centers.
D. Cellkon pulls the pieces of an activity out of different departments to create a
cross-functional work group.
E. Honeywell strives to incrementally reduce defects through an ongoing assessment
process.
Which of the following is true of a company’s business model?
A. It zeroes in on the customer value proposition and its related profit formula.
B. It explains why the customer value proposition takes precedence over the related
profit formula to generate optimum revenues.
C. It details the ethical and socially responsible nature of the company’s strategy.
D. It explains how it intends to achieve the same market position as a rival.
E. It is termed a winning model if it passes any one of the three strategy tests.
Not all buyers of an industry’s product have equal degrees of bargaining power with
sellers, because:
A. sellers in an industry provide similar products and generally their cost structures are
different because of competitive advantages in their operation.
B. some sellers may be less sensitive than others to price, quality, or service differences.
C. along the various stages of the value chain sellers are conducive to earning attractive
profits.
D. the industry is a highly cohesive structure with limited fragmentation and few
industry members.
E. sellers are large and few in number relative to the number of buyers.
The road to competitive advantage begins with management’s efforts to:
A. build organizational expertise in performing certain competitively important value
chain activities.
B. understand the value chain activities providing opportunity for growth.
C. build value-creating activities all along the value chain.
D. ensure superiority over rivals in performing even unimportant tasks and activities
extremely well.
E. maintain the existing chain of activities to lower costs.
The competitive pressures on companies within an industry come from all of the
following, EXCEPT:
A. those associated with the market maneuvering and jockeying for buyer patronage
that goes on among rival firms in the industry.
B. those companies in other industries attempting to win buyers over to their substitute
products.
C. those associated with the threat of new entrants into the marketplace.
D. those associated with the bargaining power of suppliers and customers.
E. those associated with environmental factors such as water shortages.
Which of the following is NOT a factor in contributing to the emergence and
sustainability of a strong culture?
A. Continuity of leadership, small group size, stable group membership, geographic
concentration, and considerable organizational success
B. A founder or strong leader who establishes values, principles, and practices that are
consistent and sensible in light of customer needs, competitive conditions, and strategic
requirements
C. A sincere, long-standing company commitment to operating the business according
to established traditions, thereby creating an internal environment that supports decision
making and strategies based on cultural norms
D. Centralized decision making, strict enforcement of company policies, and a strong
commitment to being the market share leader
E. A genuine concern for the well-being of the organization’s three biggest
constituencies-customers, employees, and shareholders
Which of the following is NOT a sound guideline for designing a reward and incentive
system that helps promote good strategy execution?
A. The reward system must be administered with scrupulous objectivity and fairness.
B. The payoff for meeting or beating performance targets must be a major, not minor,
piece of the total compensation package.
C. The incentive plan should extend to all managers and all employees, not just top
management.
D. The reward system must reward nonperformers who, despite expending tremendous
effort, have not fared well in achieving the benchmarks under the incentive system.
E. Make sure that the performance targets each individual or team is expected to
achieve involve outcomes that the individual or team can personally affect.
Driving-forces analysis helps managers identify whether:
A. the collective impact of the driving forces will act to increase/decrease market
demand, increase/decrease competition, and raise/lower industry profitability in the
years ahead.
B. it will become more or less important to aim the company’s strategy at being the
industry’s low-cost producer.
C. the driving forces will have a bigger impact on company profitability than
competitive forces.
D. the industry is likely to become more or less vertically integrated and why.
E. competitive advantages are likely to grow or diminish in importance.
Managerial actions to develop core competencies and competitive capabilities internally
generally take one of two forms. What are they?
A. Either strengthening the company’s base of skills, knowledge, and experience or
coordinating and integrating the efforts of various work groups and departments
B. Either putting in high incentive bonuses to reward individual employees who train
hard to develop the desired capability or launching an extensive training effort to
develop the capability quickly with newly hired employees
C. Either using benchmarking and the adoption of best practices to imitate a capability
that rivals have already developed or empowering a team of employees to develop the
capability however they best see fit
D. Either using developed dynamic capabilities or acquiring the capability from outside
sources
E. Either by enforcing close cross-business collaboration or by centralizing the
performance of functions requiring close coordination at the corporate level
A company’s values relate to such things as:
A. how it will balance its pursuit of financial objectives against the pursuit of its
strategic objectives.
B. how it will balance the pursuit of its business purpose/mission against the pursuit of
its strategic vision.
C. fair treatment, integrity, ethical behavior, innovativeness, teamwork, top-notch
quality, superior customer service, social responsibility, and community citizenship.
D. whether it will emphasize stock price appreciation or higher dividend payments to
shareholders
E. whether it will put more emphasis on the achievement of short-term performance
targets or long-range performance targets.
Which of the following is most UNLIKELY to qualify as driving forces?
A. Changes in the long-term industry growth rate, the entry or exit of major firms, and
changes in cost and efficiency
B. Increasing globalization of the industry and product innovation
C. New Internet technology applications, new government regulations, and significant
changes in government policy toward the industry
D. Increasing efforts to collaborate with suppliers via strategic alliances and
partnerships, escalating risk levels and normalization of cost and efficiency in the
industry
E. Marketing innovations and changes in who buys the industry’s product and how they
use it
A company’s resource weaknesses can relate to all of the following EXCEPT:
A. inferior or unproven skills, expertise, or intellectual capital in competitively
important parts of the business.
B. something that it lacks or does poorly in comparison to rivals.
C. deficiencies in competitively important physical, organizational, or intangible assets.
D. missing or competitively inferior capabilities in key areas.
E. rare resources and capabilities.
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.
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.
Which of the following is NOT an accurate description of the task of crafting a
company’s strategy?
A. In most companies, crafting strategy is a team effort, involving managers and often
key employees at many organization levels.
B. Ultimate responsibility for leading the strategy-making task rests with the chief
executive officer.
C. The task of crafting strategy is best done by a company’s chief strategic planning
officer, who should report directly to the company’s CEO and board of directors.
D. It is the responsibility and duty of a company’s board of directors to ensure that new
strategy proposals can be defended as superior to alternatives and, ultimately, to
approve or disapprove of the strategy formulated and proposed by the company’s
management.
E. In most of today’s companies, every company manager has a strategy-making role,
ranging from major to minor, for his or her area of responsibility.
Which of the following is NOT part of the moral case for why a company should
actively promote the betterment of society?
A. Every action a company takes can be interpreted as a statement of what it stands for.
B. Most business leaders can be expected to acknowledge that socially responsible
actions and environmental sustainability are important and that businesses have a duty
to be good corporate citizens.
C. In return for society granting a business a “license to operate” and not be
unreasonably restrained in its pursuit of a fair profit, a business is obligated to act as a
responsible citizen and do its fair share to promote the general welfare.
D. Acting in a socially responsible manner is in the best financial interest of
shareholders.
E. Every business has a duty to do what’s best for shareholders while operating
honorably, provide good working conditions to employees, and be a good
environmental steward.
The best indicator of how well a company’s strategy is working is whether the
company:
A. is achieving its stated financial objectives, its financial performance equates to the
industry average, and market share gains reflect short-term preferences for capacity
maximization.
B. is attentive to its poor execution in functional areas, business goals are stretch, and
the value proposition has a product focus.
C. is geared to initiatives designed to build market share and to promote corporate
responsibility.
D. is achieving its stated financial and strategic objectives, its financial performance is
better than the industry average, and it is gaining customers and increasing its market
share.E. is geared to initiatives to promote corporate social responsibility.
BloomsJay Resorts Inc. has multiple tropical resorts in various locations. In a crowded
market that caters to all kinds of consumers, this resort caters mainly to gays with
guaranteed hassle-free holiday experience at a premium price. What strategy is
BloomsJay using to gain competitive advantage?
A. A low-cost provider strategy
B. A broad differentiation strategy
C. A focused low-cost strategy
D. A focused differentiation strategy
E. A best-cost provider strategy
What is the value of total quality management (TQM) and how does it differ from
business process reengineering?
Discuss the pros and cons of a strategy of unrelated diversification.
Explain the difference between a cash cow business and a cash hog business.
Identify and briefly discuss the key features that can be used to describe the corporate
culture of a company.
Under what circumstances might an already diversified company choose to pursue
corporate restructuring?