Which of the following statements about total quality management (TQM) is FALSE?
A. TQM aims at instilling enthusiasm and commitment to doing things right from the
top to the bottom of the organization.
B. TQM produces significant results very quickly, with very little benefit emerging after
the first six months.
C. TQM doctrine preaches that there’s no such thing as “good enough” and that
everyone has a responsibility to participate in continuous improvement.
D. Effective use of TQM entails creating a corporate culture bent on continuously
improving the performance of every task and every value chain activity.
E. Total quality management (TQM) is a philosophy of managing a set of business
practices that emphasizes continuous improvement in all phases of operations, 100
percent accuracy in performing tasks, involvement and empowerment of employees at
all levels, team-based work design, benchmarking, and total customer satisfaction.
Answer:
Which of the following is NOT a major question to ask in thinking strategically about
industry and competitive conditions in a given industry?
A. How many companies in the industry have good track records for revenue growth
and profitability?
B. What strategic moves are rivals likely to make next?
C. What are the industry’s key factors for future competitive success?
D. Is the outlook for the industry conducive to providing attractive profitability?
E. What are the driving forces in the industry, and what impact will these changes have
on competitive intensity and industry profitability?
Answer:
The managerial approach to implementing and executing a strategy should always:
A. be customized to fit the particulars of a company’s situation.
B. involve only minor changes to the existing strategy.
C. require radical strategy changes for successful execution.
D. rely on the active support of frontline employees.
E. focus on market conditions and the company’s resources and capabilities.
Answer:
In crafting a company’s strategy, managers:
A. face the biggest challenge of how closely to replicate strategies of successful
companies in the industry.
B. have comparatively little freedom in choosing the “hows” of strategy.
C. are wise not to decide on concrete courses of action in order to preserve maximum
strategic flexibility.
D. need to come up with a sustainable competitive advantage that draws in customers
and produces a competitive edge over rivals.
E. are well-advised to be risk-averse and develop a “conservative”
strategy”dare-to-be-different” strategies are rarely successful.
Answer:
Which of the following is NOT one of the appeals of related diversification?
A. It can offer opportunities for transferring expertise, technology, and other capabilities
from one business to another.
B. It can offer opportunities for reducing costs on advertising by leveraging use of a
competitively powerful brand name.
C. It is particularly well-suited for the use of first-mover strategies and capturing
valuable financial fits.
D. It may present opportunities for cross-business collaboration to create valuable new
competencies and capabilities.
E. It can facilitate sharing of other resources (besides brands) that support
corresponding value chain activities across businesses.
Answer:
The range of product and service segments that the firm serves within its market is
known as the firm’s:
A. horizontal scope.
B. vertical integration.
C. vertical scope.
D. product outsourcing.
E. joint venture partnership.
Answer:
Relying on outsiders to perform certain value chain activities offers such strategic
advantages as:
A. ensuring more costly components or services.
B. improving the company’s inability to innovate by allying with “best-in-class”
suppliers.
C. reducing the company’s risk exposure to changing technology and/or changing buyer
preferences.
D. increasing the firm’s inability to assemble diverse kinds of expertise speedily and
efficiently.
E. reducing its information technology and operational costs so that organizational
flexibility is maintained.
Answer:
The four tests of a resource’s competitive power are often referred to as the:
A. SCIR test, which asks if a resource is sustainable, competitive, internalized, and
reproducible.
B. competitive advantage sustainable method test.
C. reliability resources simulation.
D. VRIN test, which asks if a resource is valuable, rare, inimitable, and
non-substitutable.
E. organizational capability metric analysis.
Answer:
Potential entrants are more likely to be deterred from actually entering an industry
when:
A. incumbent firms are willing and able to be aggressive in defending their market
positions against entry.
B. incumbent firms are complacent.
C. buyers are not particularly price-sensitive and the industry already contains a dozen
or more rivals.
D. the relative cost positions of incumbent firms are about the same, such that no one
incumbent has a meaningful cost advantage.
E. buyer switching costs are moderately low because of strong product differentiation
among incumbent firms.
Answer:
The three dimensions of performance are often referred to in terms of the “three pillars”
and include all of the following EXCEPT:
A. a company’s efforts to improve the lives of its internal and external stakeholders.
B. the various social initiatives that make up the CSR strategies.
C. a firm’s ecological impact and environmental practices.
D. the economic impact (value and costs) that the company has on society.
E. a company’s efforts to reduce research and development funding to boost profits.
Answer:
Which of the following is MOST likely to qualify as a driving force?
A. Increases in price-cutting by rival sellers and the launch of major new advertising
campaigns by one or more rivals
B. Successful introduction of innovative new products or new ways to market products
C. An increase in the prices of substitute products
D. Decisions on the part of industry’s three biggest competitors not to pursue a strategy
of striving to be the industry’s low-cost leader
E. Decisions by one or more outsiders not to attempt to enter the industry
Answer:
Which of the following is most likely to be morally valid from the perspective of ethical
relativism?
A. Bribing a government official to allow you to transfer gambling winnings to a tax
haven
B. Performing genital mutilations on nonconsenting female teens
C. Employing as laborers children under the age of nine
D. Agreeing to a country’s policy of prohibiting the education of females
E. Bribing a government official in an underdeveloped country to obtain a permit to
build a hospital
Answer:
A company’s strategy is a “work in progress” and evolves over time because of:
A. the importance of developing a fresh strategic plan every year that keeps employees
from becoming bored with executing the same strategy year after year.
B. the ongoing need to imitate the new strategic moves of the industry leaders.
C. the need to make regular adjustments in the company’s strategic vision.
D. the ongoing need of company managers to react and respond to changing market and
competitive conditions.
E. the frequent need to modify key elements of the company’s business model.
Answer:
The competitive objective of a best-cost provider strategy is to:
A. outmatch the resource strengths of both low-cost providers and differentiators.
B. position the company outside the competitive arena of low-cost producers and
differentiators.
C. meet or exceed buyer expectations on key quality/performance/features/service
attributes and beat their expectations on price (given what rivals are charging for much
the same attributes).
D. deliver superior value to buyers by doing such a good job of cost control that it ends
up with the best cost (as compared to rivals) in performing each activity in its value
chain.
E. identify and concentrate on those differentiating features that are inexpensive to
incorporate.
Answer:
New strategies often entail budget reallocations because:
A. revamping the performance of value chain activities can be costly.
B. the accompanying policy revisions and compensation incentives tend to require
different levels of funding than before.
C. business units important in the prior strategy but having a lesser role in the new
strategy may need downsizing, while units and activities that now have a bigger and
more critical strategic role may need more people, new equipment, additional facilities,
and above-average increases in their operating budgets.
D. empowering employees to carry out the new strategy elements and shifting to a total
quality management type of culture to build skills in competent strategy execution
typically require substantial new funding and budget revisions.
E. adopting best practices and pushing for continuous improvement tends to reduce
costs and reduce overall resource requirements.
Answer:
When trying to change a problem culture, management should undertake such steps as:
A. selecting a team of key employees to lead the culture change effort and design a plan
for cultural change.
B. identifying facets of the present culture that are supportive of good strategy
execution and which ones are not and then specifying what new actions, behaviors, and
work practices are needed in the new culture to improve performance.
C. drawing up an action plan to change the present culture and then persuading
company personnel why this plan of action is good and will be successful.
D. conducting an employee survey to determine the organization’s cultural norms and
what company personnel like and dislike about the current culture.
E. employing a consultant with expertise in culture change and following his or her
advice on how to proceed.
Answer:
Building organizational bridges with external allies is aided by:
A. appointing “relationship managers” and giving them responsibility for making
particular strategic partnerships or alliances generate the intended benefits.
B. agreeing with allies to meet frequently and make all decisions pertaining to the
alliance on the basis of mutual agreement and consensus.
C. getting each strategic ally to agree to appoint someone as head of the collaborative
effort and to give that person the authority to enforce tight coordination of joint
activities.
D. forming a 50-50 joint venture with each strategic partner, and then assigning people
to the joint venture that has the authority and responsibility to enforce tight
coordination.
E. entering into a written agreement detailing the roles and responsibilities of the
company and the ally/partner, setting forth the results that are expected, establishing
deadlines for achieving these results, and designating the people who are to be
responsible for making the collaborative effort work successfully.
Answer:
The strategic importance of deliberately trying to develop organizational competencies
and capabilities is:
A. lower costs for employee training.
B. improved strategy execution and a potential for competitive advantage.
C. an increased ability to reduce total operating costs.
D. the added ease with which strategic fit and resource fit benefits can be captured.
E. the enhanced ability to avoid the perils of outsourcing.
Answer:
Understanding where the company is competitive requires:
A. determining whether a company has a cost-effective value chain.
B. developing quantitative strength ratings for the company and key rivals on each
industry key success factor and each pivotal resource, capability, and value chain
activity.
C. identifying a company’s core competencies and distinctive competencies (if any).
D. analyzing whether a company is well positioned to gain market share and be the
industry’s profit leader.
E. developing quantitative measures of a company’s chances for future profitability.
Answer:
A linked and closely integrated set of competitive assets centered around one or more
cross-functional capabilities is termed:
A. organizational assets.
B. a resource bundle.
C. a resource capability.
D. functional method compilation.
E. an integrated asset advantage.
Answer:
Calculating quantitative competitive strength ratings for each of a diversified company’s
business units involves:
A. determining each industry’s key success factors, rating the ability of each business to
be successful on each industry KSF, and adding the individual ratings to obtain overall
measures of each business’s ability to compete successfully.
B. identifying the competitive forces facing each business, rating the strength of these
competitive forces industry by industry, and then ranking each business’s ability to be
profitable, given the strength of the competition it faces.
C. selecting a set of competitive strength measures, weighting the importance of each
measure, rating each business on each strength measure, multiplying the strength
ratings by the assigned weight to obtain a weighted rating, adding the weighted ratings
for each business unit to obtain an overall competitive strength score, and using the
overall competitive strength scores to evaluate the competitive strength of all the
businesses, both individually and as a group.
D. determining which businesses possess good strategic fit with other businesses,
identifying the portion of the value chain where this fit occurs, and evaluating the
strength of the competitive advantage attached to each of the strategic fits to get an
overall measure of competitive advantage potential. Businesses with the highest/lowest
competitive advantage potential have the most/least competitive strength.
E. rating the caliber of each businesses strategic and resource fit, weighting the
importance of each type of strategic/resource fit, calculating weighted strategic/resource
fit scores, and adding the weighted ratings for each business to obtain an overall
strength score for each business unit that indicates whether the company has adequate
strategic/resource fits to be a strong market contender in each of the industries where it
competes.
Answer:
The most important symbolic actions are those that top executives take to:
A. lead by example.
B. lead by influence.
C. follow by example.
D. follow the majority.
E. lead to the contrary.
Answer:
An ambidextrous organization is one that:
A. pursues incremental improvements in operating efficiency, while R&D and other
processes that allow the company to develop new ways of offering value to customers
are given freer rein.
B. is capable of using efficiency and effectiveness with equal skill.
C. is very skillful and versatile with operating activity.
D. is managed by employing continuous improvement in operating practices while
managing employees as a loosely integrated network of efficiency.
E. employs identical improvement methods for both operating processes and R&D.
Answer:
The guidelines for designing an incentive compensation system that will help drive
successful strategy execution include:
A. making the performance payoff a major, not minor, piece of the total compensation
package.
B. having incentives that apply to the management team (employees should generally
not be included in incentive pay plans but should have attractive wages and salaries).
C. having an outside wage and salary expert administer the system so there is no doubt
as to its fairness and impartiality.
D. basing the incentives on group performance rather than individual performance.
E. making minimal use of nonmonetary incentives and rewarding people for diligently
performing their assigned duties.
Answer:
The defining characteristic of a well-conceived strategic vision is:
A. what it says about the company’s future strategic course”the direction we are headed
and what our future product-market-customer focus will be.”
B. that it not stretch the company’s resources too thin across different products,
technologies, and geographic markets.
C. clarity and specificity about “who we are, what we do, and why we are here.”
D. that it be flexible and operate in the mainstream.
E. that it be within the realm of what the company can reasonably expect to achieve
within four years.
Answer:
Whether buyer-seller relationships in an industry represent a strong or weak source of
competitive pressure is a function of:
A. the speed with which general economic conditions and interest rates are changing.
B. the extent to which buyers can exercise enough bargaining power to influence the
conditions of sale in their favor and whether strategic partnerships between certain
industry members can adversely affect other industry members.
C. how many buyers purchase all of their requirements from a single seller versus how
many purchase from several sellers.
D. the number of buyers versus the number of sellers.
E. whether industry members are spending more or less on advertising.
Answer:
Which of the following activities by a company does NOT conform to the norms of
corporate social responsibility?
A. Conducting vocational programs inside the company’s premises for the
underprivileged
B. Encouraging employees to use all means possible to exceed targets and providing
heavy compensation to employees who generate profits
C. Providing work-from-home options to working mothers residing in distant locations
D. Involving company personnel in cleaning and restoring state parks
E. Manufacturing energy-saving bulbs
Answer:
A diversified company’s business units exhibit good resource fit when:
A. each business is a cash cow.
B. its businesses add to a company’s overall resource strengths and have matching
resource requirements and/or when the parent has adequate corporate resources to
support its business needs and add value.
C. each business is sufficiently profitable to generate an attractive return on invested
capital.
D. each business unit produces large internal cash flows over and above what is needed
to build and maintain the business.
E. the resource requirements of each business exactly match the company’s available
resources.
Answer:
Which of the following does NOT represent a potential core competence?
A. Skills in manufacturing a high-quality product at a low cost
B. Know-how in creating and operating systems for cost-efficient supply chain
management
C. The capability to fill customer orders accurately and swiftly
D. Having a sprawling factory
E. The capability to speed new or next-generation products to the marketplace
Answer:
Strategy-making is:
A. primarily the responsibility of key executives rather than a task for a company’s
entire management team.
B. more of a collaborative group effort that involves all managers and sometimes key
employees, as opposed to being the function and responsibility of a few high-level
executives.
C. first and foremost the function and responsibility of a company’s strategic planning
staff.
D. first and foremost the function and responsibility of a company’s board of directors.
E. first and foremost the function of a company’s chief executive officer, who
formulates strategic initiatives and submits them to the board of directors for approval.
Answer: