Generally, a board member who is a source of information about a firm’s day-to-day
activities is classified as a(n)
director.
a. lead independent
b. inside
c. related
d. encumbered
Strategic leadership is the ability to anticipate, envision, maintain flexibility, and
empower others to create strategic change as necessary.
a. True
b. False
Some of the costs incurred by firms pursuing international diversification may derive
from higher coordination expenses, trade barriers, and lack of familiarity with local
cultures.
a. True
b. False
Goods or services in standard-cycle markets reflect
a. organizations that serve a mass market.
b. numerous first mover advantages.
c. an inability to sustain a competitive advantage except for brief periods of time.
d. competitive advantages that are shielded from imitation.
Firms can increase their speed to market for new products by pursuing an internal
product development strategy rather than an acquisition strategy.
a. True
b. False
Valuable capabilities allow the firm to exploit strengths or neutralize weaknesses in the
internal environment.
a. True
b. False
Market commonality is concerned with the number of markets with which the firm and
a competitor are jointly involved and the degree of importance of the individual markets
to each.
a. True
b. False
_______ may exist among managers making decisions as well as among those affected
by the decisions.
a. Certainty
b. Simplicity
c. Intraorganizatioinal conflicts
d. Interorganizational conflicts
The top management of RavenCrest, Inc. have significant stock options in RavenCrest.
They are therefore more likely to gain in making an agreement to be acquired,
especially if they have golden parachutes.
a. True
b. False
The cooperative multidivisional firm
a. establishes profit centers based on products or markets.
b. has a flat organizational structure which broadens jobs and empowers workers.
c. has a structure organized around both functional specialization and business projects.
d. has a structure requiring heavy use of horizontal integrative devices.
An organization’s _______ is composed of the key individuals who are responsible for
selecting and implementing the firm’s strategies.
b. amount of new debt incurred in buying the firm.
c. fact that the employees are purchasing the firm for which they work.
d. process of removing the firm’s stock from public trading.
An organization’s willingness to tolerate or encourage unethical behavior is a reflection
of its core values.
a. True
b. False
Junk bonds are a financing option through which risky acquisitions are financed with
debt that provides a large potential return to bondholders.
a. True
b. False
A ______ is a strategy in which firms share some of their resources and capabilities to
create economies of scope and is similar to the business-level horizontal
complementary alliance.
a. joint venture
b. synergistic strategic alliance
c. diversifying strategic alliance
d. dynamic alliance network
To be successful, an autonomous process for developing new products relies on
a. the diffusion of tacit knowledge.
b. the acquisition of innovative firms.
c. strategic alliances with other firms.
d. internal corporate venturing.
A company in a industry is LEAST likely to make heavy use of patents and copyrights.
a. slow-cycle
b. medium-cycle
c. standard-cycle
d. fast-cycle
Research suggests that _______ has decreased while ________ has increased possibly
due to the restructuring that took place in the 1990s and early twenty-first century.
a. forward vertical integration; backward vertical integration
b. backward vertical integration; forward vertical integration
c. related diversification; unrelated diversification
d. unrelated diversification; related diversification
CaseScenario2:YepseTimbeFarms,Inc.
Yepsen Timber Farms, Inc., (YTF) was started around 1933 by Danish immigrants. The
firm’s primary operations were timber harvesting on several thousand acres in Oregon
acquired in part under the Homestead Act, and in part through direct purchase. The firm
was founded, initially as a partnership, between brothers Mogens and John (Jack)
Yepsen. The Yepson brothers were among the first four graduates at Oregon
Agricultural College (now Oregon State University), worked for the forest service and
private industry in Oregon for a number of years, then quit their respective jobs to
manage the forest they had been developing for a number of years. While timber is
considered a low-tech type business, Mogens and Jack were very innovative from the
standpoint that they established “tree farms,” that is, harvesting then replanting acreage
so that it would yield timber on a sustainable basis. At the time, and in certain parts of
the world to this day, timber lands were typically “clear cut” where all the trees were
stripped from a property, then the timber harvester simply moved to another parcel.
This practice left thousands of acres barren, and often damaged valuable animal habitats
and watershed. The brothers also introduced hybrid Pine and Douglas Fir trees that
grew considerably faster than the native forest stock. These factors allowed them to
grow trees that would be ready for market in 25 years, about half the time of that
required to grow native trees. The brothers’ idea about regeneration, care for the
environment, and hybridization defined the YTF business. Never would land be
harvested faster than it could replenish itself, or in a manner that threatened habitats or
watersheds. Eventually, Mogens and Jack passed on and their only surviving children,
Marjorie, Mary Jane, Burton, and Betty inherited the property. Two of these heirs took a
strong interest in further building the portfolio of Oregon properties, and also converted
the holdings to an S-Corp. to allow for the distribution of ownership and earnings to
their own children. Under their guidance, YTF was tremendously successful and
garnered much community acclaim for its sustainable farming practices. Now, the four
siblings are in their 70s and few of their children have expressed much interest in
managing the extensive portfolio of timber holdings. Among those that have expressed
an interest, some are very knowledgeable about forestry, while others have a track
record of incompetence and self-promotion. At the same time, ownership is now spread
among some 40 children, nieces, nephews, and grandchildren of the four siblings. Many
of these individuals’ only interest in YTF is the annual dividend check they receive.How
important is this culture to the future success of YTF?
CaseScenario1:NorningInternational
Norning International (NI) states that both its past successes and future growth
strategies are based on an evolving network of wholly owned businesses and joint
ventures around its core competency in glass making. Through their alliances and
owned divisions they compete in four global business sectors: Specialty Glass and
Materials (including materials for HDTV and LCD displays), Consumer Housewares
(including microwavable dishware), Laboratory Sciences Products and Services (test
tubes, testing equipment, and drug trials testing), and Communications (fiber optics and
related technologies). Per the company’s annual report, “binding all four sectors
together is the glue of a commitment to leading edge glass making technologies, shared
resources, and dedication to total quality.” Each sector is composed of divisions,
subsidiaries, and alliances. However, the central role played by alliances is
demonstrated by the fact that the combined revenue of its 30-some alliances is more
than double that of NI on its own. Most of the alliances provide NI with access to
particular geographic markets, industries, or channels, although an increasing number
of alliances involve both market access and technological development.
What risks arise from a strategy based on such a “network of alliances”?
Define the three internal corporate governance mechanisms and how they may be used
to control and monitor managerial decisions.
When a firm chooses a business-level strategy, it must answer the questions “Who?
What? and How?” What are these questions and why are they important?
Describe the organizational structures used to implement the three international
strategies.
What factors contribute to the likelihood of a response to a competitive action?
What is restructuring and what are its common forms?
Describe the seven segments of the general environment.
Define slow-cycle, fast-cycle, and standard cycle markets.
Strategic control focuses on the _______ of strategic actions, whereas financial controls
focus on the _______ of strategic actions.
a. revenues; costs
b. long-term financial outcomes; short-term financial performance
c. content; outcomes
d. outcomes; content