The “driving forces” in an industry:
A. are usually triggered by changing technology or stronger learning/experience curve
effects.
B. usually are spawned by growing demand for the product, the outbreak of
price-cutting, and big reductions in entry barriers.
C. are major underlying causes of changing industry and competitive conditions and
have the biggest influences in reshaping the industry landscape and altering competitive
conditions.
D. appear when an industry begins to mature but are seldom present during early stages
of the industry life cycle.E. are usually triggered by shifting buyer needs and
expectations or by the appearance of new substitute products.
Which of the following is NOT a particularly sound or valid reason why a company’s
strategy should be ethical?
A. An unethical strategy reflects badly on the character of the company personnel
involved.
B. Senior executives fear public embarrassment if caught doing something perceived as
unethical.
C. An ethical strategy is in the self-interest of shareholders, partly because an unethical
strategy can damage a company’s reputation and partly because unethical behaviour can
be very costly in terms of fines and penalties.
D. Customers shun companies known for their shady behaviour and ethically
upstanding company personnel are repulsed by a work environment where unethical
behaviour is condoned.
E. A strategy that is unethical in whole or in part is morally wrong.
Crafting and executing a strategy is a top-priority managerial task because:
A. it helps management create tight fits between a company’s strategic vision and
business model.
B. it allows all company personnel, and especially senior executives, to know the
answer to “who are we, what do we do, and where are we headed?”
C. it is management’s prescription for doing business, its roadmap to competitive
advantage, a game plan for pleasing customers, and its formula for improving
performance.
D. it provides clear guidance as to what the company’s business model and strategic
intent are, and helps keep managerial decision-making from being rudderless.
E. it establishes how well executives perform these tasks and are the key determinants
of executive compensation.
One of the biggest strategic challenges to competing in the international arena includes:
A. how to leverage the opportunities arising from shifting exchange rates.
B. how to charge the same price in all country markets.
C. how to identify foreign firms licensed to produce and distribute the company’s
products.
D. whether to offer a standardized product worldwide or a customized product offering
in each different country market.
E. whether to pursue a franchising strategy or a joint venture strategy.
The primary operating strategies are concerned with:
A. what the firm’s operating departments are doing and plan to do to unify the
company’s functional and business strategies.
B. the specific plans for building competitive advantage in each major department and
operating unit.
C. how to manage initiatives of strategic significance within each functional area, and
adding detail and completeness in ways that support functional strategies and the
overall business strategy.
D. how best to carry out the company’s corporate strategy.
E. how best to implement and execute the company’s different business-level strategies.
In the course of crafting a strategy, which of the following is NOT a common
management function?
A. Abandoning certain strategy elements that have grown stale or become obsolete
B. Modifying the current strategy when market and competitive conditions take an
unexpected turn or some aspects of the company’s strategy hit a stone wall
C. Modifying the current strategy in response to the fresh strategic maneuvers of rival
firms
D. Taking proactive actions to improve this or that piece of the strategy
E. Sharing the strategy with the public to gain additional customer and shareholder
support
The big difference between business process reengineering and continuous
improvement programs like TQM or Six Sigma is that:
A. reengineering is a tool for installing process organization, whereas TQM/Six Sigma
concern defect-free production methods and delivering world-class customer service.
B. reengineering helps create core competencies, whereas TQM/Six Sigma are tools for
making a core competence stronger and more efficient.
C. reengineering is a tool for achieving one-time quantum improvement, whereas TQM
and Six Sigma programs aim at ongoing incremental improvements.
D. business process reengineering requires benchmarking, whereas TQM and Six
Sigma do not.
E. reengineering represents an effort to totally revamp a firm’s value chain, whereas
TQM looks at incrementally improving the performance of two or three targeted value
chain activities and Six Sigma is primarily for reducing manufacturing defects.
A reward system that accentuates positive rewards for good performance:
A. works best in strong culture organizations, while negative motivational approaches
and reward systems tend to be most successful in weak culture organizations.
B. is especially effective in aligning the well-being of organizational members with
achieving the company’s performance targets; reward systems with negative elements
tend to be very dysfunctional in motivating employees.
C. seldom works very well because the threat of denying rewards to sub-par performers
is typically the most powerful motivator.
D. works fine so long as 100 percent emphasis is placed on monetary incentives.
E. has considerable appeal because when cooperation is positively enlisted and
rewarded, rather than strong-armed by orders and threats (implicit or explicit), people
tend to respond with more enthusiasm, dedication, creativity, and initiative.
When concentrating production in a few locations, which of the following can allow a
manufacturer to lower unit costs, boost quality, or master a new technology more
quickly?
A. Significant scale economies
B. Learning-curve effects
C. Superior resources
D. Profit sanctuaries
E. Supporting industries
Which of the following statements regarding global competition is false?
A. In global competition, rivals vie for worldwide market leadership.
B. In globally competitive industries, the power and strength of a company’s strategy
and resource capabilities in one country significantly enhance its competitiveness in
other country markets.
C. In global competition, a firm’s overall competitive advantage (or disadvantage)
grows out of its entire worldwide operations.
D. In global competition, there’s more cross-country variation in industry conditions
and competitive forces than there is in industries where multidomestic competition
prevails.
E. In global competition, many of the same rival companies compete against each other
in many different countries, but especially so in countries where sales volumes are large
and where having a competitive presence is strategically important to building a strong
global position in the industry.
The degree of cross-country variability in paying bribes and kickbacks to grease
business transactions:
A. violates ethical principles of right and wrong in all countries.
B. is ethically acceptable according to the principle of ethical universalism and ethically
unacceptable according to the principle of ethical relativism.
C. is acceptable to immoral managers but not to amoral managers.
D. is one of the thorniest ethical problems that multinational companies face because
paying bribes is normal and customary in some countries and ethically or legally
forbidden in others.
E. is more acceptable in dealing with a company’s suppliers than in dealing with a
company’s customers.
Superior strategy execution capabilities are:
A. easy for rivals to copy.
B. socially simple..
C. develop quickly.
D. easy to achieve.E. hard to imitate.
Identifying and assessing a company’s resource strengths and weaknesses and its
external opportunities and threats is called:
A. a SWOT analysis.
B. a competitive asset/liability analysis.
C. a competitive positioning analysis.
D. a strategic resource assessment.
E. a company resource mapping.
Checking a diversified company’s business portfolio for the competitive advantage
potential of cross-business strategic fits does NOT involve ascertaining the extent to
which sister business units:
A. have value chain match-ups that offer opportunities to combine the performance of
related value chain activities and reduce costs.
B. have value chain match-ups that offer opportunities to transfer skills or technology or
intellectual capital from one business to another.
C. have opportunities to share use of a well-respected brand name.
D. have value chain match-ups that offer opportunities to create new competitive
capabilities or to leverage existing resources.
E. are cash cows and which ones are cash hogs.
For backward vertical integration into the business of suppliers to be a viable and
profitable strategy, a company:
A. must first be a proficient manufacturer.
B. must be able to achieve the same scale economies as outside suppliers and match or
beat suppliers’ production efficiency with no drop-off in quality.
C. must have excess production capacity so that it has an ample in-house ability to
undertake additional production activities.
D. needs to have a wide product line, so it can supply parts and components for many
products.
E. should have a distinctive competence in production process technology and at least a
core competence in manufacturing R&D.
Competing companies deploy whatever means necessary to strengthen market position,
including all of the following EXCEPT:
A. marketing tactics including special sales promotions such as introducing new or
improved features or increasing the number of styles to provide greater product
selection.
B. differentiating their products by offering better performance features than rivals.
C. improving innovation to increase product performance and quality.
D. making efforts to expand dealer networks.
E. reducing distribution capabilities and market presence.
If one accepts the tenets of the school of ethical relativism, then which of the following
is NOT true?
A. There are multiple sets of ethical standards rather than a single universal set.
B. At least some ethical standards are governed by local norms, religious doctrines, and
social customs rather than by absolute standards of right and wrong.
C. What constitutes ethical or unethical behavior on the part of businesses must in some
cases be judged in the light of local customs and social mores.
D. It is inappropriate to hold businesses accountable for observing a universal set of
ethical standards.
E. Ethical standards for businesses are established on the basis of conceptions of right
and wrong that apply to all businesses.
Every corporation should have a strong independent board of directors that does all of
the following EXCEPT:
A. is well informed about the company’s performance and exercises its fiduciary duty to
protect shareholders responsibly
B. guides management in choosing a strategic direction and makes independent
judgments about the validity and wisdom of management’s proposed strategic actions
C. evaluates the leadership skills of the CEO and other senior executives
D. has the courage to curb management actions deemed inappropriate or unduly risky
E. is responsible for leading the strategy-making, strategy-executing process
Being the overall low-cost provider in an industry has the attractive advantage of:
A. building strong customer loyalty and locking customers into its product because
customers have high switching costs.
B. giving the firm a very appealing brand image.
C. putting a firm in the best position to win the business of price-sensitive customers
and earn profits by setting the floor on market price.
D. putting the company in a strong position to be more profitable than companies
pursuing a differentiation strategy.
E. greatly reducing the strong bargaining power of rivals with the key distributors.