Firms that continually change their strategic context and strategies because of the
continuous changes in the current competitive landscape are in danger of losing sight of
their main competitive strengths.
a. True
b. False
In the United States, the fundamental goal of business is to
a. ensure customer satisfaction.
b. maximize shareholder wealth.
c. provide job security.
d. generate profits.
A negative effect of acquiring other firms for the purpose of innovation is
a. innovations cannot be transferred between organizations.
b. the effect it can have on the firm’s own ability to produce innovations.
c. innovations may not actually be present in the firm after the purchase is completed.
d. the acquired firm’s employees usually leave.
Acme Auto Repair has a thriving business based on its reputation for high-quality work,
honesty, and skilled employees. For continued long-term success, Acme’s owner should
a. concentrate on maintaining Acme’s current core competencies.
b. focus on developing Acme’s future competitive advantages.
c. place more emphasis on tangible resources, which are less vulnerable to obsolescence
than intangible resources.
d. recognize that core competencies derived from human resources are more subject to
becoming core rigidities than are core competencies based on other types of resources.
A fundamental reason for a country’s development of advanced and specialized factors
of production is often its
a. lack of basic resources.
b. monetary wealth.
c. small workforce.
d. protective tariffs.
All of the following are ethical sources of data for external analysis EXCEPT
a. trade shows.
b. a competitor’s annual reports.
c. a competitor’s help-wanted advertisements.
d. a competitor’s confidential memos.
Arkadelphia Polymers, Inc., earns 60 percent of its revenue from exports to Europe and
Asia. The CEO of the company would be
a. concerned if the value of the dollar strengthened.
b. pleased if the value of the dollar strengthened.
c. unconcerned about the fluctuation in the value of the dollar because the company is
widely diversified geographically.
d. likely to consider moving to international strategic alliances or acquisitions if the
value of the dollar fell and remained low.
Four types of distances are associated with the liability of foreignness: cultural,
administrative, geographic, and economic.
a. True
b. False
Which of the following statements is most consistent under the I/O view? Performance
of the firm is most directly attributable to
a. the power of the financial market stakeholders.
b. the resources the firm possesses.
c. the profitability of the industry in which the firm competes.
d. hypercompetition within the industry.
The fewest integrative devices are used in the structure.
a. simple
b. competitive multidivisional
c. SBU
d. network
One area in which joint ventures are effective is the transfer of tacit knowledge as
illustrated in the Chevron/China
National Petroleum joint venture.
a. True
b. False
The marketing and R&D functions are emphasized in the differentiation strategy’s
functional structure.
a. True
b. False
The more heterogeneous and the larger the top management team, the easier it is to
implement strategy effectively.
a. True
b. False
In the modern U.S. corporation, the ownership and managerial control of the firm are
separated.
a. True
b. False