Which of the following is NOT a common trait of an unhealthy company culture?
A. A politicized internal environment and empire-building managers who jealously
guard their turf
B. Hostility to change and a wariness of people who champion new ways of doing
things
C. An aversion to looking outside the company for best practices, new managerial
approaches, and innovative ideas
D. An aversion to incentive compensation and overemphasis on working in teams,
E. Overzealous pursuit of wealth and status on the part of key executives
Which of the following is TRUE of the capability building process?
A. It requires two things: (1) developing the ability to do something, however
imperfectly or inefficiently, and (2) molding these efforts into an organizational ability
and as experience grows and personnel perform the activity consistently well and at an
acceptable cost, it is transformed into a tried-and-true competence and as they continue
to polish and refine their know-how into further improvements, they then create a real
competitive capability.
B. It entails (1) deciding which value chain activities to perform internally and which
ones to outsource; and (2) deciding how much authority to centralize at the top and how
much to delegate to down-the-line managers and employees.
C. It is essential (1) when the company does not have the ability to create the needed
capability internally (perhaps because it is too far afield from its existing capabilities),
and (2) when industry conditions, technology, or competitors are moving at such a rapid
clip that time is of the essence.
D. It involves (1) staffing the organization with people capable of executing the strategy
well, (2) developing the resources and building the organizational capabilities needed
for successful strategy execution, and (3) creating an organizational structure supportive
of the strategy execution process.
E. It must (1) supplement the design with appropriate coordinating mechanisms, and (2)
institute whatever networking and communications arrangements are necessary to
support effective execution of the firm’s strategy.
Which of the following is NOT accurate as concerns a company’s competencies and
capabilities?
A. Competencies and capabilities that grow stale can impair competitiveness unless
they are refreshed, modified, or even phased out and replaced in response to ongoing
market changes and shifts in company strategy.
B. Core competencies have to be tweaked and adjusted to keep them fresh and
responsive to changing customer needs and market conditions.
C. The imperatives of keeping capabilities in step with ongoing strategy and market
changes make it appropriate to view a company as a bundle of evolving competencies
and capabilities.
D. Even after core competencies and competitive capabilities are in place and
functioning, company managers can’t relax. They still have to wrestle with when and
how to recalibrate existing competencies and capabilities and when and how to develop
new ones.
E. When a company succeeds in hiring talented employees and training them properly,
competencies and capabilities tend to develop quickly and, once put in place, can last
for a decade or more.
In the strategy-making, strategy-executing process, effective corporate governance
requires a company’s board of directors to:
A. play the lead role in forming the company’s strategy and then directly supervising the
efforts and actions of senior executives in implementing and executing the strategy.
B. provide guidance and counsel to the CEO in carrying out his/her duties as chief
strategist and chief strategy implementer.
C. oversee the company’s strategic direction, evaluate the caliber of senior executives’
skills, handle executive compensation, and oversee financial reporting practices.
D. work closely with the CEO, senior executives, and the strategic planning staff to
develop a strategic plan for the company and then oversee how well the CEO and senior
executives carry out the board’s directives in implementing and executing the strategic
plan.
E. review and approve the company’s business model and also review and approve the
proposals and recommendations of the CEO as to how to execute the business model.
Driving-forces analysis has:
A. speculative value because it compels the firm to drive strategic intent and collective
choice into operating practices.
B. theoretical value because it allows managers to visualize the many different
dimensions of the preferred forces that allow for industry functionality.
C. practical value and is basic to the task of thinking strategically about where the
industry is headed and how to prepare for the changes ahead.
D. no real analytical value because the driving forces are already established in the
marketplace and it is too late to make astute and timely strategy adjustments.
E. perceived value and is associated with identifying the close and distant rivals within
an operating industry.
Obtaining cost information is a primary difficulty associated with benchmarking. The
following are typical sources for collecting information, EXCEPT:
A. from published reports, industry research firms, and trade groups.
B. from talking to knowledgeable industry leaders.
C. from field trips to the facilities of competitors or non-competing firms.
D. from independent firms and consulting firms to gather best practices and
comparative cost data without identifying competing firms.
E. from the classified government documents.
The big issue an acquisition-minded firm must consider is whether:
A. to acquire the firm at a price that cannot recapture the investment.
B. to require the acquired firm’s resources and management capability to sustain the
ongoing struggling operation.
C. to pay a premium price for a successful local company or to buy a struggling firm at
a discount price.
D. to pay a price that builds in all the synergistic advantages to the acquired firm.
E. to pay a very high premium price that sends a signal to the market that the new firm
has arrived.
The business case for CSR and environmentally sustainable business practices suggests
such actions could lead to all of the following EXCEPT:
A. increased buyer patronage.
B. shorter supply chain.
C. lower costs and enhanced employee recruiting and workforce retention.
D. opportunities for revenue enhancement and best long-term profits for shareholders.
E. reduced risk of reputation-damaging incidents.
How are a company’s organizational capabilities developed and enabled?
A. By strengthening the traditions that company executives are committed to
maintaining
B. Through deployment of a company’s resources or some combination of its resources
C. By talking openly about the problems of the present company and determining how
new behaviors will improve performance
D. By shifting from decentralized to centralized decision-making
E. By urging company personnel to search outside the company for work practices and
operating approaches that may be an improvement over what the company is presently
doing
Evaluating the industry’s driving forces, as a whole, requires understanding their
influence on the attractiveness of industry environment and generally are:
A. determined by the sizes of strategic groups and the power of rival firms’ competitive
strategies.
B. defined in ways that will strengthen or weaken market demand, competition, and
industry profitability in future years.
C. the cause of a reduction in the bargaining power of buyers.
D. triggered by movement in the economy, higher or lower interest rates, or important
new strategic alliances.
E. triggered by such factors as growing competitive pressures from substitute products,
and the efforts of rival firms to employ new or different offensive strategies.
Identify and briefly explain what is meant by each of the following terms:
a. horizontal scope
b. vertical scope
c. scope of the firm
How does a company’s unethical behavior risk doing direct damage to a company’s
creditors?
A. It could result in diminished business reputation.
B. It could lead to default on loans due to potential business fallout.
C. It could result in lower stock prices and lower returns.
D. It could lead to shunning by customers
E. It could make recruiting and retaining talented employees difficult.
A search engine giant specializes in all types of search items; provides a free translation
feature for 80 different languages; allows users to view ads on previously made related
searches; provides suggestive search items to assist the user; allows users to view a
collation of related web pages users might want to visit; and provides a faster load time
and more accurate hits than its rivals. Which of the following is a profit formula used
by the company?
A. Providing a free translation feature for 80 different languages
B. Allowing users to view ads on previously made related searches
C. Allowing users to view a collation of related web pages users might want to visit
D. Providing a faster load time and more accurate hits than its rivals
E. Providing suggestive search items based on history of sites visited
Management’s blueprint for how and why the company’s business approaches will
generate revenues sufficient to cover costs and produce attractive profits and returns on
investment:
A. best describes what is meant by a company’s strategy.
B. best describes what is meant by a company’s business model.
C. accounts for why a company’s financial objectives are at the stated level.
D. portrays the essence of a company’s business purpose or mission.
E. is what is meant by the term strategic intent.
Which of the following is NOT a principal offensive strategy option?
A. Leapfrogging competitors by being first to market with next-generation products
B. Using hit-and-run or guerrilla warfare tactics to grab sales and market share
C. Launching a preemptive strike to secure an advantageous position that rivals are
prevented or discouraged from duplicating
D. Pursuing continuous product innovation to draw sales and market share away from
rivals
E. Being the final competitor to market a next-generation product so as to guarantee the
product is operationally sound