A strategy of related diversification requires a need to reorganize around product lines
and geographic markets. This leads to a divisional structure.
According to the transaction cost perspective in analyzing vertical integration, every
market transaction involves some transaction cost.
Dispersed approaches to corporate entrepreneurship are often found in organizations
with a strong spirit of entrepreneurship.
In bridging relationships in social networks, one member is central to the
communication flows in a group.
Although many organizations encourage creativity and risk taking, few successful
companies tolerate failure.
The need to attain economies of scale encourages multinational firms to operate under a
multidomestic strategy.
Disruptive innovations are those that overturn markets by providing an altogether new
approach to meeting customer needs.
Individual and institutional shareholders have the same rights that include all except
one of the following. Which one is not a shareholder right?
A. the right to sell stock
B. the right to vote the proxy
C. the right to bring suit for damages, if the economy declines
D. certain residual rights following the liquidation of the company, once creditors and
claimants are paid
Most successful organizations minimize the need for explicit rules, regulations, and
other boundaries by _____________.
A. posting written statements of the organizational goals and objectives
B. discouraging the formation of subcultures that isolate work groups
C. designing effective reward systems
D. encouraging employees to see themselves as free agents
The resource-based view (RBV) of the firm combines two perspectives:
A. the primary and support activities of the firm
B. the interrelationships among the primary activities of the firm and corporate
management
C. the internal analysis of the firm and the external analysis of the industry and
competitive environment
D. the industry and the competitive environment
Which of the following is NOT one of the characteristics of reward and incentive
systems?
A. They represent a poor means of influencing the culture of an organization.
B. They focus efforts on high priority tasks.
C. They motivate high levels of individual and collective task performance.
D. They represent an effective control mechanism.
Which of the following statements about strategic groups is FALSE?
A. Two assumptions are made: (1) no two firms are totally different, (2) no two firms
are exactly the same.
B. Strategic groupings are of little help to a firm in assessing mobility barriers that
protect a group from attacks by other groups.
C. Strategic groups help chart the future directions of firm strategies.
D. Strategic groups are helpful in thinking through the implications of each industry
trend for the group as a whole.
Which of the following is not one of the dimensions of entrepreneurial orientation?
A. proactiveness
B. risk taking
C. autonomy
D. opportunism
Which of the following would be considered part of a firm’s general environment?
A. decreased entry barriers
B. higher unemployment rates
C. increased bargaining power of the firm’s suppliers
D. increased competitive intensity
The four key attributes of strategic management include the idea that:
A. strategy must be directed toward overall organizational goals and objectives
B. strategy must be focused on long-term objectives
C. strategy must be focused on one specific area of an organization
D. strategy must focus on competitor strengths
Supplier power has increased because of the Internet for all of the following reasons
EXCEPT:
A. the growth of new Web-based businesses has created more outlets for suppliers to
sell to
B. some suppliers have created Web-based purchasing systems that encourage
switching
C. the process of disintermediation makes it possible for some suppliers to reach end
users directly
D. software that links buyers to a supplier’s website has created rapid, low-cost order
capabilities
Project ______________ involves justifying whether an opportunity is attractive in the
marketplace; project ______________ involves evaluating the strategic and economic
impact of a new venture.
A. impetus; definition
B. definition; impetus
C. reward; development
D. development; focus
In order to create an environment where employees can achieve their potential as they
move the organization towards its goals, the manager role needs to be that of
_____________.
A. resource allocator
B. resource controller
C. a flexible resource
D. an advocator of the status quo
Firms must be aware of goals other than short-term profit maximization. One area of
concern should be social responsibility which is:
A. the expectation that business will strive to improve the overall welfare of society
B. the idea that organizations are solely responsible to local citizens
C. the fact that court costs could impact the financial bottom line
D. the idea that businesses are responsible to maintain a healthy social climate for their
employees
Describe the attributes of a matrix organizational structure. What are the advantages
and disadvantages associated with using the matrix organizational form?
Discuss the risks associated with each of these forms of competitive advantage: overall
cost leadership, differentiation, and focus.
Explain how a cost leadership strategy permits a firm to address the five forces in its
competitive environment so that it can enjoy higher-than-normal profits.
What are the three key means to align the interests of owners (shareholders) and
managers in a corporation?
Compare and contrast the concepts of focused versus dispersed approaches to corporate
entrepreneurship. Provide examples of each approach.
Compare and contrast market commonality and resource similarity.
Explain how the overall cost leadership strategy is used by new ventures to achieve
competitive advantage. Provide an example.
Discuss the uses and limitations associated with the industry life cycle concept as a
framework for studying strategy formulation at the business level.
What is intellectual capital and what is its effect on the ratio of firm market value to
book value?
Use the value chain as a framework to explain how a firm can achieve a competitive
advantage of overall cost leadership.