Motivational and incentive compensation practices that aim at winning the commitment
of company personnel to good strategy execution typically:
A. use only positive rewards and never involve the use of tension, fear, job insecurity,
stress, or anxiety.
B. entail decidedly positive rewards for meeting or beating performance targets, but
also impose sufficiently negative consequences when actual performance falls short of
the target.
C. aim at creating a no-pressure/no-adverse-consequences work environment.
D. entail paying the highest wages and salaries in the industry for all jobholder
positions and also stressing nonmonetary rewards, like cash bonuses for
high-performing employees.
E. put top priority on making employees happy and secure in their jobs.
Core competencies and competitive capabilities are usually:
A. lodged in the narrow skills and specialized work efforts of a single department, as
opposed to the combined expertise and capabilities of specialists scattered across
several departments.
B. observed to stem from collaborative efforts with strategic allies.
C. bundles of skills and know-how that most often grow out of the collaborative efforts
of cross-functional work groups and departments performing complementary activities
at different locations in a firm’s value chain.
D. found to result in competitive advantage when they involve highly specific
technologies and are grounded in a company’s own deep technical expertise.E. built
rapidly, usually in conjunction with important product innovations.
A core competence:
A. is a more competitively valuable strength than a competence because of the key role
the activities play in the company’s strategy.
B. typically has competitive value, the amount of which is reflected in the physical and
tangible assets on a company’s balance sheet.
C. usually is grounded in the technological expertise of a particular department or work
group.
D. is more difficult for rivals to copy than a distinctive competence.E. refers to a
company’s lowest-cost and most efficiently executed value-chain activity.
The difference between a core competence and a distinctive competence is that:
A. a distinctive competence refers to a company’s strongest resource or competitive
capability, whereas a core competence refers to a company’s lowest-cost and most
efficiently executed value-chain activity.
B. a core competence usually resides in a company’s base of intellectual capital,
whereas a distinctive competence stems from the superiority of a company’s physical
and tangible assets.
C. a core competence is a competitively and strategically relevant activity that a firm
performs well compared to its other activities, whereas a distinctive competence is a
competitively relevant activity a firm performs well compared to other rival firms.
D. a core competence represents a resource strength, whereas a distinctive competence
is achieved by having more resource strengths than rival companies.
E. a core competence usually resides in a company’s technology and physical assets,
whereas a distinctive competence usually resides in a company’s know-how, expertise,
and intellectual capital.
The major drivers of unethical managerial behavior include:
A. lack of self-dealing and short termism on the part of top executives of a company.
B. heavy pressures on company managers to meet or beat performance targets, and
overzealous pursuit of personal gain.
C. widespread managerial belief in the ethical relativism school of thinking.
D. widespread managerial belief in the ethical universalism school of thinking.
E. adherence to a cosmetic code of ethics stemming from a desire to avoid the risk of
embarrassment.
A company’s realized strategy evolves from one version to the next due to:
A. changing management direction because of understanding several appealing strategy
alternatives.
B. the proactive efforts of company managers to improve the current strategy, a need to
respond to changing customer requirements and expectations, and a need to react to
fresh strategic maneuvers on the part of rival firms.
C. ongoing turnover in the managerial and executive ranks (new managers often decide
to shift to a different strategy).
D. pressures from shareholders to boost profit margins and pay higher dividends.
E. the importance of keeping the company’s business model fresh and up-to-date.
Which of the following statements about fluctuating exchange rates and the related
effects on companies competing in foreign markets is true?
A. Fluctuating exchange rates pose significant risks to a company’s competitiveness in
foreign markets.
B. The advantages of manufacturing goods in a particular country are largely unaffected
by fluctuating exchange rates.
C. Companies that are manufacturing goods in a particular country and are exporting
much of what they produce lose out when that country’s currency grows weaker relative
to the currencies of the countries that the goods are being exported to.
D. The advantages of manufacturing goods in a particular country improve when that
country’s currency grows stronger relative to the currencies of the countries where the
output is being sold.
E. Domestic companies under pressure from lower-cost imports are hurt even more
when their government’s currency grows weaker in relation to the currencies of the
countries where the imported goods are being made.
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.
A competitive strategy predicated on low-cost leadership tends to work best when:
A. there are widely varying needs and preferences among the various buyers of the
product or service.
B. there are many market segments and market niches, such that it is feasible for a
low-cost leader to dominate the niche where buyers want a budget-priced product.
C. price competition among rivals is especially vigorous and the offerings of rival firms
are essentially identical, standardized, commodity-like products.
D. buyers prefer that the products/services of competing sellers have widely varying
attributes and prices.
E. buyers have high switching costs and there is considerable diversity in how buyers
use the product.
The managerial task of developing a strategic vision for a company:
A. concerns deciding what approach the company should take to implement and
execute its business model.
B. entails coming up with a fairly specific answer to “who are we, what do we do, and
why are we here?”
C. is chiefly concerned with addressing what a company needs to do to successfully
outcompete rivals in the marketplace.
D. involves deciding upon what strategic course a company should pursue in preparing
for the future and why this directional path makes good business sense.E. entails
coming up with a concrete plan for how the company intends to make money.
Changing circumstances and ongoing managerial efforts to improve the strategy:
A. account for Why a Companys Strategy Evolves over Time.
B. explain why a company’s strategic vision undergoes almost constant change.
C. make it very difficult for a company to have concrete strategic objectives.
D. make it very hard to know what a company’s strategy really is.
E. result in abandoned strategic visions.
Rivalry among competing sellers is generally more intense when:
A. there are relatively few industry key success factors.
B. the industry’s driving forces are strong and rivals have strongly differentiated
products.
C. barriers to entry are moderately high and the pool of likely entry candidates is small.
D. rivals are active in making fresh moves to lower prices, introduce new products,
increase promotional efforts and advertising, and otherwise gain sales and market
share.E. barriers to entry are high and buyer switching costs are high.
The marketing emphasis of a company pursuing a broad differentiation strategy usually
is to:
A. under-price rival brands with comparable features.
B. tout differentiating features and charge a premium price that more than covers the
extra costs of differentiating features.
C. out-advertise rivals and make frequent use of discount coupons.
D. emphasize selling directly to end-users and promoting personalized customer
service.E. communicate the product’s ability to serve the customer’s every need.
Alliance management is considered an organizational capability and:
A. develops over time, out of effort and learning.
B. decreases a company’s knowledge assets.
C. creates successful strategic alliances.
D. decreases a company’s knowledge capabilities.
E. rapidly transfers assets into the strategic alliance.
Crafting a deliberate strategy involves developing strategy elements that:
A. imitate as much of the market leader’s strategy as possible so as not to end up at a
competitive disadvantage.
B. comprise a five-year strategic plan that is then fine-tuned during the remainder of the
plan period; big changes in strategy are thus made only once every five years.
C. consist of a blend of proactive new planned initiatives plus ongoing strategy
elements continued from prior periods.
D. deliberately eliminate the ongoing strategic elements and implement new planned
initiatives.
E. consist of adaptive change plans to new market situations along with abandoned
redundant ongoing elements.
Identify and briefly discuss the four types of organizational structures that can be
aligned with strategy execution.
Not all buyers of an industry’s product are likely to possess the same degree of
bargaining power or leverage over the terms and conditions under which they purchase
the product. True or false? Explain.
Identify five guidelines for creating an incentive compensation system that will help
drive successful strategy execution.
What are the duties of a company’s board of directors in the strategy-making,
strategy-executing process?
Can an industry be attractive to one company and unattractive to another company?
Why or why not?