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Which of the following is NOT one of the managerial considerations in determining
how to compete successfully?
A. How can a company attract, keep, and please customers?
B. How can a company modify its entire product line to emphasize its internal service
attributes?
C. How should a company respond to changing economic and market conditions?
D. How should a company be competitive against rivals?
E. How should a company position itself in the marketplace?
Answer:
All of the following are distinctive characteristics of an unhealthy corporate culture
EXCEPT:
A. the presence of counterproductive cultural traits that adversely impact the work
climate and company performance.
B. a preoccupation with risk management and capitalizing on related market
opportunities.
C. a decision-making effort that is subject to pressure from many different cliques.
D. ethical behavior that is driven by subcultures.
E. a strong fixation on attending to what customers are saying and how their needs and
expectations are to be met.
Answer:
Costs and price differences among competing companies can have origins in activities
performed by:
A. the company's internally performed activities (its own value chain) compared to the
cost structure of the internally performed activities of rival companies.
B. value chains of the company's suppliers.
C. value chains of a company's distributors and retail dealers and forward channel
allies.
D. the company's internally performed activities (its own value chain), but also on costs
in the value chain of its suppliers and distribution channel allies.
E. whether the company has a longer or shorter value chain than its close rivals.
Answer:
Which of the following statements regarding a company's social responsibility and
sustainability strategy is FALSE?
A. A company is not demonstrating an adequate degree of social responsibility or
endeavoring to be a model corporate citizen unless it spends 5 percent (or more) of
pretax profits on social responsibility initiatives.
B. Social responsibility strategies that have the effect of both providing valuable social
benefits and fulfilling customer needs in a superior fashion can lead to competitive
advantage.
C. A few companies have integrated social responsibility and/or environmental
sustainability objectives into their missions and overall performance targets. They view
social performance and environmental metrics as an essential component of judging the
company's overall future performance.
D. Unless a company's social responsibility initiatives become part of the way it
operates its business every day, the initiatives are unlikely to be fully effective.
E. While the strategies and actions of all socially responsible companies have sameness
in the sense of drawing on the same categories of socially responsible behavior, each
company's version of being socially responsible is unique.
Answer:
The best quantitative evidence of whether a company's present strategy is working well
is:
A. whether the company has more competitive assets than it does competitive
liabilities.
B. whether the company is in the industry's best strategic group.
C. the caliber of results the strategy is producing, specifically whether the company is
achieving its financial and strategic objectives and whether it is an above-average
industry performer.
D. whether the company has a shorter value chain than close rivals.
E. whether the company is in the Fortune 500.
Answer:
Economies of scope:
A. are cost reductions that flow from operating in multiple related businesses.
B. arise only from strategic fit relationships in the production portions of the value
chains of sister businesses.
C. are more associated with unrelated diversification than related diversification.
D. are present whenever diversification satisfies the attractiveness test and the
cost-of-entry test.
E. arise mainly from strategic fit relationships in the distribution portions of the value
chains of unrelated businesses.
Answer:
Which of the following is NOT one of the strategy options for competing in the markets
of foreign countries?
A. A profit sanctuary strategy
B. An international strategy
C. A global strategy.
D. A multidomestic strategy
E. A transnational strategy
Answer:
Why does a U.S. company exporting wooden furniture manufactured in Malaysia to the
European Union benefit from the decline in the value of ringgit against the euro?
A. Because decline in the value of ringgit against euro raises the cost of furniture
manufactured in Malaysia, making it less competitive in European markets
B. Because decline in the value of ringgit against euro reduces the cost of furniture
manufactured in Malaysia, making it more competitive in European markets
C. Because decline in the value of ringgit against euro has no impact on the cost of
furniture manufactured in Malaysia, both in Malaysian or European markets
D. Because decline in the value of ringgit against euro makes European goods more
competitive as compared to Malaysian goods
E. Because decline in the value of ringgit against euro makes Malaysian goods less
competitive in the U.S. market
Answer:
Which of the following is NOT a reason why companies might use outsourcing to
improve performance of strategy-critical activities?
A. Improving a company's chances for outclassing rivals in the performance of
strategy-critical activities and turning a core competence into a distinctive competence
B. Promoting quick establishment of a total quality culture
C. Speeding internal decision making and shortening the time it takes to respond to
changing market conditions
D. Capitalizing on the partnerships with outsiders to enhance its arsenal of capabilities
and thus contribute to better strategy execution
E. Helping decrease internal bureaucracies and flatten the organizational structure
Answer:
Which of the following is true of the school of ethical universalism?
A. There are ethical principles that set forth the traits and behaviors considered virtuous
and that a good person is supposed to believe in and display.
B. They are ethical principles embodied in international law that all societies and
countries are obliged practice.
C. All societies and countries apply essentially the very same set of universally defined
ethical principles of right and wrong in judging the ethical correctness of business
behavior.
D. It is mandatory that the standards of what's ethical and what's unethical be applied
universally to all businesses in all countries irrespective of local business traditions and
local business norms.
E. The standards of what constitutes ethical and unethical behavior in business
situations are partly universal, but in the main are governed by local business norms.
Answer:
Which of the following statements about a strong-culture company is NOT true?
A. In a strong-culture company, culturally approved behaviors and ways of doing things
are nurtured while culturally disapproved behaviors and work practices get squashed.
B. In a strong-culture company, senior managers make a point of reiterating key
principles and core values to organization members; more importantly, they make a
conscious effort to display these principles and values in their own actions and behavior
and they insist that company values and business principles be reflected in the decisions
and actions taken by all company personnel.
C. Continuity of leadership, small group size, stable group membership, geographic
concentration, and considerable organizational success all contribute to the emergence
and sustainability of a strong culture.
D. Centralized decision making, strict enforcement of company policies, diligent
pursuit of a distinctive competence, and a bold strategic intent are the hallmarks of a
strong-culture company.
E. In a strong-culture company, values and behavioral norms are like crabgrass: deeply
rooted and hard to weed out.
Answer:
Whether supplier-seller relationships in an industry represent a strong or weak source of
competitive pressure is a function of:
A. whether the profits of suppliers are relatively high or low.
B. the average number of suppliers that each seller/industry member purchases from.
C. how aggressively rival industry members are trying to differentiate their products.
D. whether demand for supplier products is high and they are in short supply.
E. whether the prices of the items being furnished by the suppliers are rising or falling.
Answer:
Any company that seeks competitive advantage by being a first-mover must ask several
hard questions prior to executing its strategy. Which question would it NOT ask?
A. Does market takeoff depend on the new development of complementary products?
B. Is a new infrastructure required before buyer demand can surge?
C. Will buyers encounter high switching costs to move?
D. Are there influential competitors in a position to delay or derail the efforts?
E. Did the company pour too many resources into getting ahead of the market
opportunity?
Answer:
One of the big weaknesses of organization structures that do not have cross-business
collaboration is:
A. making it hard to effectively empower employees.
B. making it difficult to have closely related activities report to a single executive.
C. that pieces of strategically relevant activities and capabilities often end up scattered
across many departments, with each pursuing its own priorities, projects, and agendas.
D. impeding the use of outsourcing.
E. making it hard to fix managerial accountability for poor results.
Answer:
Codes of ethics and statements of core values:
A. are the single most effective measure of enforcing ethical behavior and cultural
norms, provided they are written down and every employee is given a copy.
B. serve as yardsticks for gauging the appropriateness of particular actions, decisions,
and behaviors.
C. serve as the best benchmarks for judging whether the corporate culture is deeply
ingrained, planted and accepted or not.
D. need to be personally written and presented by the CEO to reinforce the company
values and convictions so that employees will take it seriously.
E. serve to give top-priority emphasis to every employee in training programs a
company conducts.
Answer:
A good example of vertical integration is a:
A. global public accounting firm acquiring a small local or regional public accounting
firm.
B. large supermarket chain getting into convenience food stores.
C. crude oil refiner purchasing a firm engaged in drilling and exploring for oil.
D. hospital opening up a nursing home for the aged.
E. railroad company acquiring a trucking company specializing in long-haul freight.
Answer:
Which of the following conditions acts to weaken buyer bargaining power?
A. When buyers are unlikely to integrate backward into the business of sellers
B. When buyers purchase the item frequently and are well-informed about sellers'
products, prices, and costs
C. When the costs incurred by buyers in switching to competing brands or to substitute
products are relatively low
D. When the products of rival sellers are weakly differentiated and buyers have
considerable discretion over whether and when they purchase the product
E. When buyers are few in number and/or often purchase in large quantities
Answer:
Best-cost provider strategies are appealing in those market situations where:
A. diverse buyer preferences make product differentiation the norm and where a large
number of value-conscious buyers can be induced to purchase mid-range products.
B. a company is positioned between competitors who have ultra-low prices and
competitors who have top-notch products in terms of both quality and performance.
C. buyers are more quality-conscious than price-conscious.
D. there are numerous buyer segments, buyer needs are diverse across these segments,
only a few of the segments are growing rapidly, and sellers' products are strongly
differentiated.
E. buyers are more performance-conscious than value-conscious.
Answer:
The strategy-making, strategy-executing process:
A. is usually delegated to members of a company's board of directors.
B. includes establishing a company's mission, developing a business model aimed at
making the company an industry leader, and crafting a strategy to implement and
execute the business model.
C. embraces the tasks of developing a strategic vision, setting objectives, crafting a
strategy, implementing and executing the strategy, and then monitoring developments
and initiating corrective adjustments in light of experience, changing conditions, and
new opportunities.
D. is principally concerned with sizing up an organization's internal and external
situation, so as to be prepared for the challenges of developing a sound business model.
E. is primarily the responsibility of top executives and the board of directors; very few
managers below this level are involved in the process.
Answer:
Which of the following is NOT likely to be an effective management action (making a
compelling case to employees) about culture-remodeling efforts that can create a better
strategy-culture fit?
A. Citing reasons why and how certain behavioral norms and work practices in the
current culture pose obstacles to good execution of new strategic initiatives
B. Explaining how new behaviors and work practices that are to be introduced and have
important roles in the new culture will be more advantageous and produce better results
C. Calling upon first-level supervisors and rank-and-file employees to identify cultural
barriers to good strategy execution and then to lead the cultural change effort
D. Granting pay raises to individuals who step out front, lead the adoption of the
desired work practices, display the new-style behaviors, and achieve pace-setting
results
E. Revising policies and procedures in ways that will help drive cultural change
Answer:
Which of the following is NOT a good option for trying to remedy high internal costs
vis--vis rivals' firms?
A. Finding ways to detour around activities or items where costs are high
B. Redesigning the product or some of its components to permit more economical
manufacture or assembly
C. Implementing aggressive strategic resource mapping to permit across-the-board cost
reduction
D. Outsourcing high-cost activities to vendors or contractors who can perform them
more economically
E. Relocating high-cost activities (like manufacturing) to geographic areas (like China
or Latin America or Eastern Europe) where they can be performed more cheaply
Answer:
It is normal for a company's strategy to end up being:
A. a blend of offensive actions on the part of managers to improve the company's
profitability and defensive moves to counteract changing market conditions.
B. a combination of conservative moves to protect the company's market share and
somewhat more risky initiatives to set the company's product offering apart from rivals.
C. a close imitation of the strategy employed by the recognized industry leader.
D. a blend of proactive actions to improve the company's competitiveness and financial
performance, and adaptive reactions to unanticipated developments and fresh market
conditions.
E. more a product of clever entrepreneurship than of efforts to clearly set a company's
product/service offering apart from the offerings of rivals.
Answer:
What is the difference between economies of scale and economies of scope?
A. Scale refers to the magnitude or size of the operation, while scope refers to the reach
of defined savings within the value chain.
B. Scale refers to the extent of change, while scope refers to the possibilities of change.
C. Scale is about dimensions, while scope is about the capacity available for production
capabilities.
D. Scale refers to cost savings that accrue directly from larger-sized operations, while
scope stems directly from strategic fit along the value chains of related businesses.
E. Scale and scope mean the same thing and the only difference is the extent of cost
savings accrued from unrelated businesses in each.
Answer:
The contention that ethical standards should reflect the collective views of multiple
societies in establishing a set of universal ethical principles (that are widely recognized
as laying legitimacy to ethical boundaries on actions and behavior in all situations) and
in allowing inclusion of a set of prevailing customary actions of local cultures or groups
(with their traditions and shared values), that further prescribe to what represents
ethically permissible behavior and what does not, constitutes the basic principles of:
A. the school of ethical relativism.
B. the school of ethical universalism.
C. integrated social contracts theory.
D. corporate social responsibility.
E. the triple bottom line.
Answer:
Challenging a struggling rival can do all of the following EXCEPT:
A. sap the rival's financial strength and competitive position.
B. weaken the rival's resolve.
C. accelerate the rival's exit from the market.
D. threaten the rival's overall survival in the market.
E. strengthen the rival's loyal following.
Answer:
What are value drivers?
A. A set of factors (analogous to cost drivers) that are particularly effective in having a
strong differentiation effect
B. A firm's hidden success factor for creating over-the-top product features that will
command the highest price in the industry
C. A technique for easily identifying factors that validate a firm's performance
D. A set of factors that verify the unique nature of a firm
E. A set of guidelines for identifying the most promising upscale attributes to
incorporate into a product
Answer:
Which of the following is NOT a method that company managers can use to promote
operating excellence in performing value chain activities?
A. Utilize benchmarking.
B. Adapt best practices.
C. Install TQM and/or Six Sigma quality control techniques.
D. Undertake business process reengineering.
E. Adopt standard industry techniques.
Answer:
For every emerging opportunity there exists:
A. a market penetration curve, and this typically has an inflection point where the
business model falls into place.
B. an opportunity to achieve first-mover status, which depends on analyzing the
competitive status curve where all the potential rivals are encoded.
C. an emerging pitfall that is a counterpoint to the intended growth.
D. a normal curve scenario which signifies the average growth curve will be
opportunistic.
E. an intense competition that constrains the company's prospects for rapid growth and
superior profitability.
Answer:
Increasing globalization of the industry can be a driving force because:
A. the products of foreign competitors are nearly always cheaper or of better quality
than those of domestic companies.
B. foreign producers typically have lower costs, greater technological expertise, and
more product innovation capabilities than domestic firms.
C. companies need to spread their operating reach into more and more country markets
to meet consumer demand and take advantage of available operating activities.
D. it results in companies having fewer competitors and a strategic group map with
fewer circles.
E. market growth rates go up, product innovation speeds up, and new firms are likely to
enter the industry.
Answer:
Which of the following is NOT a recommended way for managers to monitor the
operating performance of employees to ensure superior strategy execution?
A. Scrutinizing daily and weekly operating statistics without resorting to constant
over-the-shoulder supervision
B. Utilizing self-managed work groups in peer-based control environments
C. Removing some layer of management hierarchy and relying on strong peer pressure
to keep team members operating between the white lines
D. Leaving employees to their own devices in meeting performance standards
E. Using information systems capability to monitor team performance in real time
Answer:
Unhealthy company cultures typically have such characteristics as:
A. tight budget controls, overly strict enforcement of longstanding policies and
procedures, and high ethical standards.
B. a preference for conservative strategies, an aversion to incentive compensation, and
excessive emphasis on profitability.
C. a politicized internal environment, hostility to change and an aversion to looking
outside the company for best practices, new managerial approaches, and innovative
ideas.
D. overemphasis on employee empowerment, a complacent approach to building
competencies and capabilities, no coherent business philosophy, and excessively
bureaucratic policies and procedures.
E. an emphasis on innovation, a strong preference for hiring managers from outside the
company, and few core values and traditions.
Answer:
Which of the following factors represents the strategically relevant political factors in
the macro-environment that will influence the performance of all firms across the
board?
A. The strength of the federal banking system
B. The exogenous forces related to the general environmental demand
C. Social factors that could fuel a political agenda and create greater transparency
D. Bailouts and energy policies that are industry-specific
E. Tax policy, fiscal policy, and tariffs providing impetus for anti-trust matters
Answer:
A company's environmental sustainability strategy consists of its deliberate actions to:
A. shelter the environmental impacts from the company's resources and competitive
capabilities.
B. provide for the defense of natural resources usage within cross-border commitments.
C. moderate assurance for ecological support systems for future generations.
D. guard against ultimate endangerment of the business.
E. operate the business in a manner that promotes the longevity of sustainability effects.
Answer:
Identify and briefly discuss any three of the factors that influence the bargaining
strength and leverage of buyers.
Answer:
