63) According to the research in strategic human resources management,
A) firms that are able to use human resource practices to develop socially complex human and
organizational resources are able to gain competitive advantage over firms that do not engage in
these practices.
B) firms that are able to use human resource practices to develop socially simplistic human and
organizational resources are able to gain competitive advantage over firms that do not engage in
these practices.
C) firms that are able to use human resource practices to develop socially complex human and
organizational resources gain little advantage over firms that do not engage in these practices.
D) firms that are able to use human resource practices to develop socially complex human and
organizational resources are at a competitive disadvantage when compared to firms that do not
engage in these practices.
64) Which of the following statements regarding patents is accurate?
A) Patents always increase the costs of imitation.
B) Patents may decrease, rather than increase, the costs of imitation.
C) Patents always decrease the costs of imitation.
D) Patents have no impact on the costs of imitation.
65) The range of formal and informal mechanisms to ensure that managers are behaving in ways
consistent with a firm’s strategies are referred to as
A) formal reporting structures.
B) organizational charts.
C) compensation policies.
D) management control systems.
66) Which of the following is an example of formal management controls?
A) A firm’s culture
B) The willingness of employees to monitor each other
C) Budgeting and reporting activities
D) Managerial motivation
67) Southwest Airlines’ strong internal culture that helps ensure that employees act in ways
consistent with the company’s strategy is an example of a(n)
A) informal management control.
B) formal management control.
C) compensation policy.
D) formal reporting structure.
68) Resources that are valuable but not rare can be categorized as
A) organizational weaknesses.
B) distinctive competencies.
C) organizational strengths.
D) complementary resources and capabilities.
69) Resources that generate a temporary competitive advantage are
A) valuable, rare and costly to imitate.
B) valuable but neither rare nor costly to imitate.
C) valuable and either rare or costly to imitate.
D) valuable and rare but not costly to imitate.
70) If a resource or capability is valuable and rare but not costly to imitate, exploiting this
resource will generate a(n)
A) sustained competitive advantage.
B) perfectly competitive environment.
C) temporary competitive advantage.
D) environment characterized by competitive parity.
71) Resources and capabilities that are valuable, rare, and costly to imitate are best described as
A) distinctive competencies.
B) entry barriers.
C) complementary resources and capabilities.
D) sustainable distinctive competencies.
72) If Delta Airlines were to significantly change its fare structure and flight schedule to enhance
its competitive position in response to aggressive price cutting by Southwest Airlines, this would
be an example of
A) explicit collusion.
B) tacit collusion.
C) competitive dynamics.
D) a harvest strategy.
73) Any actions a firm takes that have the effect of reducing the level of rivalry in an industry
that also do not require firms in an industry to directly communicate or negotiate with each other
can be thought of as
A) tacit cooperation.
B) tacit collusion.
C) explicit collusion.
D) competitive parity.
74) When tacit cooperation has the effect of reducing supply and increasing prices, it is known as
A) monopolistic competition.
B) explicit collusion.
C) competitive parity.
D) tacit collusion.
75) Tacit cooperation is only a viable strategy when
A) an industry is perfectly competitive.
B) an industry is heterogeneous with respect to the products it sells and their cost structure.
C) there is a strong market share leader in the industry.
D) there are low entry barriers in the industry.
76) The specific actions a firm takes to implement its strategies are known as
A) competitive advantages.
B) objectives.
C) goals.
D) tactics.
77) Which of the following statements regarding the resource-based view is accurate?
A) Competitively valuable resources and capabilities are controlled only by a firm’s general
managers.
B) Only lower level employees need to accept the responsibility of creating, nurturing and
exploiting resources and capabilities that can generate competitive advantages for a firm.
C) Employees should define their jobs in functional terms instead of in competitive and
economic terms.
D) Competitive advantage is too important to remain the sole property of senior management.
78) Which of the following statements regarding competitive parity and competitive advantage is
accurate?
A) Some firms develop valuable, rare, and costly-to-imitate resource and capabilities in being
efficient second movers that is, imitating and improving on the product and technological
innovations of other firms.
B) Firms that benchmark their performance against the performance of successful competitors
can expect to develop at least a temporary competitive advantage.
C) Firms must be first movers to gain competitive advantages.
D) Even if all a firm does is create value in the same way as its competitors, the firm can expect
to earn at least a temporary competitive advantage.
79) If there is a conflict between the resources a firm controls and that firm’s organization,
________ should be changed.
A) the resources
B) both
C) nothing
D) the organization
80) A process is said to be ________ when events early in the evolution of a process have
significant effects on subsequent events.
A) causally ambiguous
B) path dependent
C) socially complex
D) path independent
81) LaserTech’s new technology appears to be
A) valuable and rare but not costly to imitate.
B) valuable and either rare or costly to imitate.
C) valuable but neither rare nor costly to imitate.
D) valuable, rare and costly to imitate.
82) If one of LaserTech’s rivals were to decide to divest its industrial laser manufacturing
business in response to LaserTech’s new technology, this would be an example of
A) competitive dynamics.
B) tacit collusion.
C) a sustainable distinctive competence.
D) competitive parity.
83) If LaserTech’s new technological development were due to proprietary investments the
company made when it was first founded twenty years ago, this would be an example of
A) social complexity.
B) tacit collusion.
C) path dependence.
D) causal ambiguity.
84) LaserTech’s new technology is an example of
A) financial resources.
B) physical resources.
C) human resources.
D) organizational resources.
85) The inability of rivals to develop or acquire technology similar to that of LaserTech is an
illustration of
A) resource immobility.
B) resource heterogeneity.
C) causal ambiguity.
D) path dependence.
86) Bates’ culture is an example of a(n)
A) informal management control.
B) formal management control.
C) compensation policy.
D) formal reporting structure.
87) The budgeting and reporting activities that Bates uses are examples of
A) informal management controls.
B) formal reporting structures.
C) formal management controls.
D) primary value chain activities.
88) The reward system Bates uses to encourage employees to find ways to reduce costs is an
example of a(n)
A) sustained distinctive competence.
B) informal management control.
C) formal reporting structure.
D) compensation policy.
89) The fact that it would be would be difficult and costly for firms to match Bates’ capabilities
in the tool industry indicates that these capabilities are
A) imperfectly imitable.
B) casually ambiguous.
C) substitutable.
D) perfectly imitable.
90) It would be costly for competitors to duplicate Bates due to
A) path dependence and causal ambiguity.
B) causal ambiguity and unique historical conditions.
C) path dependence and unique historical conditions.
D) causal ambiguity and patents.
91) Describe the difference between resources and capabilities.
92) Identify the four broad categories that a firm’s resources and capabilities can be classified
into.
93) Identify and describe the two fundamental assumptions about the resources and capabilities
that firms may control that the RBV rests on.
94) Identify the four questions represented in the VRIO framework that one must ask about a
resource or capability to determine its competitive potential.
95) Define the concept of a value chain and distinguish between two commonly used value chain
models.
96) Discuss whether a firm must be must be the only one to possess a valuable resource or
capability in order for the firm to benefit from the resource or capability’s rarity or if other firms
may own it as well.
97) Identify two forms of imitation and describe four sources of costly imitation.
98) Identify four components of a firm’s organization that are relevant to the question of
organization and discuss what role they play in building a competitive advantage.
99) Discuss the questions underlying the VRIO framework and use these questions to
differentiate between a simple distinctive competence and a sustained distinctive competence.
100) Define the nature of competitive dynamics and identify three reasons why a firm might not
respond to another firm’s competitive advantage.