The kind of strategic alliance in which there is a partnership of similar companies in
similar industries who pool their resources to gain a benefit that is too expensive to
develop alone is the
A) joint venture.
B) licensing agreement.
C) value-chain partnership.
D) mutual service consortia.
E) holding company.
Answer:
A program or tactic is
A) a detailed cost statement in terms of dollars.
B) a system of sequential steps.
C) a statement of the activities needed to support a strategy.
D) the process by which strategies and policies are put into action.
E) none of the above
Answer:
The concept of the lead director originated in
A) the United Kingdom.
B) the United States.
C) France.
D) Sweden.
E) Germany.
Answer:
Hofstede’s work on national culture was extended to nine cultural dimensions by
A) RHR International.
B) Project GLOBE.
C) Alfred Chandler.
D) Nahavardi and Malekzadeh.
E) McKinsey & Company.
Answer:
The purchase of the supplier Carroll’s Foods for its hog-growing facilities by Smithfield
Foods, the world’s largest pork processor, is an example of
A) forward integration.
B) horizontal integration.
C) backward integration.
D) transferred integration.
E) mass integration.
Answer:
Which of the following reflects the impact of industry backgrounds on strategic
choices?
A) Executives from other industries tend to make riskier decisions.
B) Executives with strong ties within an industry tend to choose strategies commonly
used in that industry.
C) Executives from other industries tend to downsize as a first choice.
D) Executives with strong ties within an industry tend to make riskier decisions.
E) Executives from other industries tend to emphasize ROI.
Answer:
What did a study of 173 firms over a 25-year period reveal about CEOs of successful
corporations?
A) They tended to have less loyalty than former CEOs, switching companies at a faster
pace.
B) They tended to have the same functional specialization as the former CEO.
C) They tended to be more aggressive in their risk-taking than former CEOs.
D) They tended to rely more on skills developed through group decision making.
E) They tended to be turnaround specialists.
Answer:
A study of nearly 500 of the world’s largest corporations indicated which of the
following to be the most widely practiced form of forecasting?
A) statistical modeling
B) scenario-writing
C) delphi technique
D) brainstorming
E) trend extrapolation
Answer:
Human resource departments have found that to reduce employee dissatisfaction and
unionization efforts, they must
A) significantly increase their wage rates.
B) shorten the work week to allow for more leisure time.
C) offer a wider variety of benefits and attractive enticements.
D) guarantee their workers lifetime jobs.
E) consider the quality of work life in the design of jobs.
Answer:
Knowledge that can be easily articulated and communicated is known as
A) tacit knowledge.
B) explicit knowledge.
C) imitable knowledge.
D) transferable knowledge.
E) durable knowledge.
Answer:
In international dealings, greenfield development is
A) a way in which an MNC may contract with a foreign government or local firm to
trade raw materials for certain resources belonging to the MNC.
B) a way in which an MNC can take total control of operations by acquiring a firm
already established in the host country.
C) when a corporation chooses to build a facility from scratch allowing it the freedom
to design the plant, choose suppliers, and hire its workforce.
D) when an MNC has a large amount of management talent available and chooses to
use its personnel to assist a firm in a host country for a specified fee and period of time.
E) contracting for construction of operating facilities in exchange for a fee.
Answer:
FedEx’s application of information technology to all its operations is an example of
A) resources.
B) distinctive competencies.
C) core competencies.
D) critical success factors.
E) key performance factors.
Answer:
The part of an industry’s value chain that is most important to a company and the point
where its greatest expertise and capabilities lie is called the company’s
A) functional crossroads.
B) center of gravity.
C) dynamic equilibrium.
D) R&D intensity.
E) economy of scope.
Answer:
According to Porter, the term that applies to the breadth of a company’s or business
unit’s target market is called
A) competitive scope.
B) differentiation.
C) focus.
D) diversification.
E) cost leadership.
Answer:
Tacit collusion
A) involves direct communication among competing firms.
B) is most likely to be successful if there are many competitors.
C) is seen with conscious parallelism as practiced by GE and Westinghouse.
D) is not illegal.
E) is most effective when the industry does not have a firm that acts as a price leader.
Answer:
According to Kohlberg, the second level of moral development, characterized by
considerations of society’s laws and norms, is called
A) principled.
B) essential.
C) conventional.
D) preconventional.
E) fundamental.
Answer:
The percentage of U.S.-based expatriate managers who fail to adjust to a host country’s
social and business environment is
A) 6% or less.
B) approximately 35%.
C) between 50% and 75%.
D) around 80%.
E) greater than 90%.
Answer:
The calculation of ratios from financial data is referred to as
A) SWOT analysis.
B) ratio analysis.
C) receivables analysis.
D) integration analysis.
E) diversification analysis.
Answer:
Which of the following describes a typical functional structure?
A) Employees tend to be specialists in the business functions important to that industry
such as manufacturing, marketing, finance, and human resources.
B) This is most appropriate for large corporations with many product lines in several
related industries, with employees acting as specialists attempting to gain synergy
among divisional activities.
C) This is most appropriate for small, entrepreneur-dominated companies with one or
two product lines that operate in a small niche market, with employees acting as
jack-of-all trades.
D) Employees have two or more superiors, a project manager and a functional manager.
E) This is most appropriate for large corporations with many product lines in several
unrelated industries, with employees acting as specialists but with no attempt at gaining
synergy among the divisions.
Answer:
Former Enron Vice President Sherron Watkins used the ________ analogy to explain
why executives at Enron engaged in unethical and illegal actions.
A) borrowing earnings
B) Napoleon complex
C) moral relativism
D) frogs in boiling water
E) distributive justice
Answer:
Corporations will emphasize all types of controls (output, input, and behavior) when
they are following a strategy of
A) conglomerate diversification.
B) concentric diversification.
C) retrenchment.
D) divestment.
E) vertical integration.
Answer:
It is advisable to have management from all levels participate in the strategy
formulation process
A) because it is a legal requirement.
B) because collective bargaining agreements often mandate worker participation.
C) to gain an insight as to what work needs to be done and to gain cooperation in the
implementation of the strategy.
D) because it is part of their job responsibilities to provide input regarding their
respective area of expertise.
E) because it helps boost the self-image and ego of all managers to be asked for advice.
Answer:
Which of the following is NOT one of the four question areas Barney proposes in his
VRIO framework used to evaluate a firm’s key resources?
A) organization
B) durability
C) rareness
D) value
E) imitability
Answer:
Which one of the following directional strategies is most frequently used in
corporations?
A) stability
B) consolidation
C) growth
D) retrenchment
E) expansion
Answer:
According to Goold and Campbell, when companies coordinate the flow of products or
services of one unit with that of another unit to reduce inventory, the synergistic effect
is known as
A) pooled negotiating power.
B) shared know-how.
C) coordinated strategies.
D) economies of scale or scope.
E) new business creation.
Answer:
Which financial ratio indicates how much after-tax profit is generated by each dollar of
sales?
A) return on investment
B) return on equity
C) gross profit margin
D) net profit margin
E) inventory to net working capital
Answer:
According to Porter’s model, a strong or high force is likely to reduce profits and can be
regarded as a(n)
A) benefit.
B) opportunity.
C) advantage.
D) threat.
E) risk.
Answer:
Trend extrapolation is
A) the process of converting intuition and hunches into reality.
B) the extension of present trends into the future.
C) the process of asking some authorities in the area to make an “informed guess” about
the future.
D) given a large amount of historical data on certain interrelated factors, one attempts to
conceptualize alternative futures.
E) detecting faulty underlying assumptions before forecasting errors can occur.
Answer:
Since the deregulation of the airline industry, major airlines have entered into a spirited
battle for market share by cutting prices and offering special deals. This is an example
of which strategy to avoid?
A) follow the leader
B) hit another home run
C) arms race
D) do everything
E) losing hand
Answer:
Adding a related or complementary product to a corporation’s business units is called
A) concentration.
B) horizontal growth.
C) concentric diversification.
D) vertical growth.
E) conglomerate diversification.
Answer:
Alfred Chandler, known for his study of large American corporations, concluded that
A) organic structure is best for firms in a changing environment.
B) mechanistic structure is best for firms in a changing environment.
C) structure follows strategy.
D) strategy follows structure.
E) strategic business units are the key to effective decentralization.
Answer:
As an industry matures while overcoming fragmentation and becomes dominated by a
small number of large companies, it tends to become a(n)
A) united industry.
B) fragmented industry.
C) consolidated industry.
D) isolated industry.
E) integrated industry.
Answer: