Procter and Gamble used communities of practice and human resource practices to help
it achieve effective collaboration and integration across its different business units. This
effort resulted in the successful development of the Crest Whitestrips product and is an
example of good use of boundary-constrained organizational design.
Strategic management should only include short-term objectives. Long-term objectives
are covered in the vision statement of the organization.
The opportunities and threats of a SWOT analysis refer to the internal conditions of the
firm.
One way the Internet and digital technologies are creating opportunities for firms with
differentiation strategies is by enabling mass customization.
Technical skills are a necessary and sufficient condition for hiring an employee.
Although acquiring related businesses can enhance the bargaining power of a
corporation, there is a risk of retaliation by competitors that can result in a diminishing
of the desired bargaining power.
Toyota paid a heavy price for its excessive emphasis on cost control. By focusing on
only one strength exclusively, it suffered severe losses. This is an example of the
limitations of a SWOT analysis.
The Sarbanes-Oxley Act of 2002 requires that CEOs and CFOs of publicly-listed
companies must reveal off-balance-sheet finances and vouch for the accuracy of
information provided.
Starbucks acquired the baker chain, La Boulange, with the intention of selling the
bakery products at its coffee cafes. The increased market exposure for La Boulange is
an example of a revenue enhancing benefit that can arise from the differentiation
strategy.
Reintermediation is responsible for an overall reduction in business opportunities.
Firms that are successful in creating competitive advantages that are sustainable for a
period of time do not have to be concerned about profits being retained by employees or
managers.
Boundaries and constraints are just used to maintain order in an organization and have
little effect on the strategic priorities of the organization.
Interest-rate increases have a __________ impact on the residential home construction
industry and a __________ effect on industries that produce consumer necessities such
as prescription drugs or basic grocery items.
A. positive; negligible
B. negative; negligible
C. negative; positive
D. positive; negative
One of the following statements about innovativeness is not true. Which is it?
A. It refers to making decisions and taking risks without certain knowledge of probable
outcomes.
B. It refers to efforts of a firm to find new opportunities and novel solutions.
C. It involves creativity and experimentation.
D. It is aimed at developing new products, services, and processes.
Aircraft makers Boeing and Airbus have a high degree of ______________ because
they make very similar products and have many buyers in common.
A. dynamic capabilities
B. market commonality
C. first mover advantages
D. equity funding
The balanced scorecard, developed by Kaplan and Norton, helps to integrate ______.
A. financial analysis and the reputation of a firm
B. intangible resources and operational measures
C. financial analysis and stakeholder perspectives
D. short-term perspectives and strategic positioning
Expropriation of minority shareholders means that minority shareholders
_____________.
A. must sell their shares upon demand
B. cannot own shares in foreign firms
C. do not receive dividends
D. are adversely affected by the actions of controlling shareholders
The traditional approach to strategic control is sequential. Which of the following is not
one of the steps in the sequence?
A. Action plans are submitted by lower level managers.
B. Performance is measured against the predetermined goal.
C. Strategies are implemented.
A matrix organizational structure is characterized by a combination of the
______________ and _____________.
A. functional structure; divisional structure
B. simple structure; functional structure
C. simple structure; divisional structure
D. holding company structure; divisional structure
In emerging economies and continental Europe, firms often can be characterized by all
of the following except _____________.
A. concentrated ownership
B. low family ownership and control
C. business group structures
D. weak legal protection for minority shareholders
Which of the following is not an advantage of Just-In-Time inventory systems?
A. reduced raw material storage costs
B. minimized idle production facilities and workers
C. reduced dependence on suppliers
D. reduced work-in-process inventories
Which of the following is not an example of corporate competitive analysis?
A. Banks tracking home loans
B. Airlines changing hundreds of fares daily in response to competitor tactics
C. Car manufacturers offering sales incentives based on rival offers
D. Consumers comparing product offers online
The best example of a tactical action that a company might use in response to a
competitive attack is to _____________.
A. acquire the competitor
B. target the markets of the rival
C. expand into new geographical areas
D. offer price discounts and rebates
A manufacturing business pursuing cost leadership is likely to _______.
A. focus on a narrow market segment
B. use advertising to build brand image
C. rely on experience effects to raise efficiency
D. put heavy emphasis on product engineering
According to a study by the Kaufmann Foundation, which of the following is the largest
source of funding for businesses that have been operating at least five years?
A. loans
B. venture capital
C. public financing
D. angel financing
Which of the following is not part of a culture of entrepreneurship?
A. The search for venture opportunities permeates every part of the organization.
B. Every value chain activity is viewed as a source of entrepreneurial value creation.
C. Employees at every level are attuned to opportunities to help create new businesses.
D. Only those directly involved in the innovation effort are attuned to new opportunities
to create business.
Refusal to share information, conflicts over resources, conflicts between departments
and divisions, and petty interpersonal differences are symptoms of which type of barrier
to change?
A. systemic barriers
B. political barriers
C. behavioral barriers
D. entry barriers
The best measure of a company’s ability to meet imminent financial obligations is
known as the
A. debt ratio
B. current ratio
C. total asset turnover
D. profit margin
When subcultures emerge that have shared values opposite from the dominant culture
of an organization _____________.
A. organizational cohesiveness increases
B. information is shared rather than hoarded
C. individuals begin working at cross purposes
D. individuals gain insights into overarching goals and objectives
Human capital and social capital are vital for superior firm performance. If a firm has
strong human capital, the firm may exploit this by building social capital. This can be
accomplished by _____.
A. requiring workers to work independently of each other
B. decreasing the interaction of departments within the firm
C. structuring the firm with rigid departmental and employee divisions
D. encouraging the sharing of ideas between employees in the firm
What are some of the key strengths and limitations of SWOT analysis?
Discuss the potential benefits of using company policies and procedures to encourage
ethical behavior.
What is meant by principal-principal (PP) conflict? What are the implications for sound
corporate governance?
Discuss the benefits and risks of using reward and incentive systems as a means of
strategic control.
Discuss the differences between integrity-based and compliance-based approaches to
organizational ethics.
What are the benefits and limitations of making historical comparisons in analyzing a
firm’s performance?
Discuss how real options logic can be applied in the context of corporate
entrepreneurship. Are there any disadvantages to using this approach to make decision
about launching corporate ventures?
What are the advantages and disadvantages of using venture capital to finance new
ventures?
What value do effective strategic control systems provide to the implementation of
strategy?
Explain the important barriers to entry in an industry. Provide examples.